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Last Updated: Tuesday, 14 November 2006, 23:44 GMT
Ethiopia asks diaspora to work at home
Hairdresser Tadiwos Belete
Mr Tadiwos fled Ethiopia's communist regime

BBC News is investigating the changing face of business in Africa, a continent once regarded as a high-risk location for investors but now increasingly a place to do business.

Amber Henshaw reports from Addis Ababa on how the return of Ethiopians living abroad may help secure the nation's future prosperity.

After 23 years in America, Tadiwos Belete decided to sell his two swanky hair salons in Boston, Massachusetts, to return to his homeland, Ethiopia.

Mr Tadiwos used to charge more than $100 (52) for a haircut in Newbury Street, but at the Boston Day Spa in Addis Ababa he asks for just $11.

So why did he want to return to one of the world's poorest countries?

"I wanted to be part of the development of Ethiopia," Mr Tadiwos explains.

"Ethiopia needs its own people to come back with a vision to create a new style of business in areas that have not been developed before," he says.

Mr Tadiwos says he saw a gap in the market and wanted to fill it.

The 43-year-old fled from Ethiopia to Sudan when he was just 17 because of the communist regime that had overthrown Emperor Haile Selassie in 1974.

At the time, there were many others like him. Now, Mr Tadiwos says people feel that the time is right to return to Ethiopia.

Numbers game

The government estimates that between 1.5 million and 2 million Ethiopians are living abroad in places as far afield as Sweden, Canada and the Middle East.

Addis Ababa
The other side of Addis Ababa - poverty remains rife

It is keen to encourage as many Ethiopians as possible to come back and invest because it sees the diaspora's involvement as key to development, says acting head of the Ethiopian Expatriate Affairs Department Fesseha Tesfu.

Accurate figures are difficult to come by, but government officials estimate that over the last five years more than $800m has been invested in Ethiopia by the diaspora.

Mr Fesseha says the diaspora is investing in a range of sectors from agriculture and real estate to tourism and leisure.

There are no doubts that major hurdles exist for investors from the diaspora.

Critics complain about the red tape and complicated bureaucracy that they have to contend with.

It is a problem that the government is aware of and is trying tackle.

"Of course there are a lot of problems with the bureaucratic system which we have to improve," Mr Fesseha says. "The government is focused on it - it is a priority."

Sweeter deals

In fact, the government is offering a range of incentives for people to come back and invest.

They include tax holidays, cheap land and duty-free importation of equipment. The government also wants the diaspora to work with its missions overseas.

"We want them to sell Ethiopian goods overseas, to be partners to find markets for our products, to identify investors in their areas and to identify resources because they have networks wherever they are," Mr Fessehan says.

There are a lot of sectors for people to invest in
Tadiwos Belete

After last year's election, when post-polling violence left more than 193 civilians and six police officers dead, some observers feared that the political situation might put investors off.

So far there is no statistical evidence to support this.

The government is optimistic that investment by the diaspora is an area of growth for Ethiopia.

Mr Tadiwos certainly agrees that the opportunity here is great.

"There are a lot of sectors for people to invest in," the hair stylist explains. "The reason is that until now no one came back, there was little investment - now every direction you go to there is a great opportunity."

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