Cut price letters of credit (L/Cs) are amongst a range of incentives aimed at attracting investors to take a stake in Ethiopia's Hawassa Industry Park.

The move is part of a new government policy to support the development of several new industrial parks that are set to open across Ethiopia.

Reduced commission

Manufacturers that exclusively produce for the export market in industrial parks will be able to take advantage of an L/C processing fee reduced to 0.5 per cent. The usual fee is a 3.5 per cent commission on L/C processing.

The Commercial Bank of Ethiopia and the Development Bank of Ethiopia will provide L/Cs at the preferential rate according to official sources.

More to come

Studies by the Ethiopia's Ministry of Industry found that the country's banks charged exporters an uncompetitive rate for L/Cs compared with other countries.

Special advisor to the prime minster and chairman of the Industrial Parks Development Corporation, Arkebe Oqubay, says that similar L/C incentives will be introduced as more industrial parks are opened across the country.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.