Dire Dawa Provisional Administration Investment Report

I N T R O D U C T I O N
1. INTRODUCTION
Proclamation No.416/2004 provides Dire Dawa the legal status that
enables it to become a Chartered City, the residents of the Dire Dawa
Provisional Administration have, therefore, the legal foundation that
enables them to exercise self administration, determine the organiza-
tional structures and operations of the city in conformity with democrat-
ic principles, good governance and contemporary trends of growth and
development.
This proclamation makes it imperative that the entire well-being of the

residents be ensured, and that efficient and cost-effective municipal
service be equitably delivered so as to make it a modern and competi-
tive work and residential city in which the entire well-being of its resi-
dents is ensured.
The proclamation of the Charter marks a turning point in the history of

the city. Thus, Dire Dawa has now the mandate to design, and carry out
the development undertakings that will enable it to address the prevail-
ing socio-economic problems in it.
The Provisional Administration of the city has already taken the neces-
sary measures that will promote investment by creating conducive envi-
ronment for its growth, and success.
This booklet, prepared by the Dire Dawa provisional administration

Investment Agency, attempts to give consolidated information about the
investment climate, resource potential and investment opportunities that
exist in Dire Dawa Provisional Administration.
Prepared by the Dire Dawa Provisional Administration Investment 1

Agency, March 2005
G E N E R A L F E A T U R E
2.GENERAL FEATURE
2.1. GEOGRAPHICAL LOCATION
The Dire Dawa Provisional Administration is located in the eastern part of Ethiopia. The adminis-
tration is bordered by the Shinile Zone of the Somali National Regional State on the northwest, and
northeast, and by the eastern Hararghie Region of the Oromia National Regional State on the
south, southeast, and east.
The Provisional Administration is estimated to have a total land area of 128,802 hectares of land,
of which 97.73% covers the rural area, and the remaining 2.27% accounts for the land area used
by the regions main urban centre: Dire Dawa City, located 515 km from Addis Ababa, 55 km from
Harar, and 313 km from Port Djibouti.
2.2. CLIMATE
The climatic condition of the Provisional region seems to be greatly influenced by its topography,
which lies between 950 1250 MASL, and which is characterized by warm and dry climate with a
relatively low level of precipitation.
The mean annual temperature of the Provisional Administration is about 25.40C. The average
maximum temperature of the Administration is 31.40C, while its average minimum temperature is
about 18.20C.
The region has two rain seasons; that is, a small rain season from March to April, and a big rain
season that extends from August to September. The aggregate average annual rainfall that the
region gets from these two seasons is about 604 mm. On the other hand, the region is believed to
have an abundant underground water resource.
2.3. POPULATION
The population of the region is at present estimated to be about 369,674, of which 73.6% reside
in the urban area and the rest 26.4% live in rural areas.
Being one of the largest urban centers in the country, Dire Dawa has become home for peoples
from a number of nations and nationalities found in the country as well as for people from India,
Yemen, Turkey, etc.
2.4. LANGUAGES AND RELIGIONS
A number of Ethiopian Languages including Oromiffa, Amharic, Somali, Guragigna, Tigrigna,

Harari, etc. are widely spoken in Dire Dawa by the people from the various nations and nationali-
ties living in Dire Dawa. Amharic is used as a working language in the city. Arabic also serves as
a medium of communication in some sectors of the city.
The presence of conducive environments like similarity in lifestyles, closeness and friendship
2 Prepared by the Dire Dawa Provisional Administration Investment

Agency, March 2005
FAVOURABLE INVESTMENT CLIMATE
among the people of the city have contributed to the creation of a unique blending of custom that
transcends any cultural and language barriers. As a result of this, nearly all the people living espe-
cially in the central and eastern sections of the city are able to speak two or more languages.
The predominant religions practiced in the region are Islam and Christianity. However, we can find
people from other religious groups like Hindu and the like in the city.
3. FAVOURABLE INVESTMENT CLIMATE

3.1. LAWS, RULES, AND GUIDELINES
The Dire Dawa Provisional Administration has a friendly environment that is suitable for investment
by virtue of its being the second chartered city after Addis Ababa to have the mandate to legislate
laws, rules and regulations.
3.1.1. ORGANIZATION AND OBJECTIVES OF THE ADMINISTRATION
The administration of Dire Dawa is organized in such a way that it ensures the entire well being of
its residents by making Dire Dawa a modern and competitive work and residential city where effi-
cient and cost-effective municipal service is equitably delivered, and where the residents are able
to determine the organizational structures and operations of the city in conformity with democratic
principles, good governance, and contemporary trends of growth and development as legally stip-
ulated in Proclamation 416/1996.
The City Administration shall have the following objectives: -
1. To establish a competent, transparent, and accountable administration in the city, where good
governance is practiced, and where efficient and equitable municipal service is provided and
reliable security and social harmony are ensured.
2. To create suitable work and residential environment as well as to facilitate conditions whereby
residents of the city become the overall beneficiaries of the development pursuits undertaken

Agency, March 2005
by becoming an integral and determinant part of the decision-making process.
3. To ensure that the city becomes a centre where all the cultures of the nations and nationalities
of the country exist in equality.
4. To ensure that the safety and comfort of all residents of the city is safeguarded and where chil-
dren, women, persons with physically disabilities, the aged and other disadvantaged sections
of the society are provided with the special privileges they deserve.
5. To achieve rapid economic development for the city by encouraging investment and research.
6. To enable the city to provide the access to trade, industry, and other services for the surround-
ing area.
7.To ensure that the city remains green, tidy, and suitable for living by safeguarding it from envi-
ronmental contamination and pollution, and through the maintenance of ecological balance.
3.1.1.1 POWERS AND FUNCTIONS OF THE ADMINISTRATION
Having powers to make laws and exercise judicial powers specifically conferred on it by the
Charter Proclamation 416/1996 and having its executive powers and functions over matters that
have not specifically been included in the details of the powers and functions of the Federal
Government Executive Organs,
1. The City Administration shall issue and implement Policies, Proclamations, and Regulations as
well as adopt economic and social development directives concerning the development of the
city.
2. The city administration shall: -
a) Establish municipal and non-municipal bodies
b) Constitute public enterprises as legal entities on its own or in partnership with private
enterprises or other third parties
c) Establish kebele and demarcate their boarders as well as allocate budgetary subsidy
to it
3 And other important power and function indicated in the charter(refer the charter)
3.1.1.2 STRUCTURE AND ORGANS OF POWER OF THE CITY ADMINISTRATION
1. The City Administration shall have organs of power to be organized at the City and Kebele lev
levele.
2. The organ of the powers of the City Centre shall be the following:-
a) City Council
b) Mayor
c) City Cabinet
d) City Judiciary Organs and
e) The Office of the Chief Auditor of the city
3. The organs of power of the Kebele Administration are the following:-
a) Kebele Council
b) Kebele chief executive
c) Kebele standing committee
d) Kebele social court

Agency, March 2005
3.1.2. LAND DELIVERY PROCEDURES
The Dire Dawa Administration employs one of the following procedures when making decisions
with regard to land earmarked for trade and commerce, investment, or construction of residential
units: -
a) Auction or Negotiations
b) Drawing lots for those who desire constructing individual residential units, however, pri-
ority will be given to those who make the request after having been organized in an
association.
c) Through allocation or as land grant or gift.
d) The administration can provide the land through lease or freely, as encouragements to
a development work or social service it considered to be important.
3.1.2.1. AUCTION PROCEDURE
1. Auction notice should be announced through public media or any other suitable method, at least
once within 10 days prior to the actual auction opening dates.
2. Auction notice should contain explicit information about land size, locality, price, intended usage
and building height, bidders procedure, the amount and conditions for withholding the bid-secu-
rity, number of days it takes to handover, bid inviting institution, address and its legal right to
fully or partially reject the auction, exact sale location of bid document, payment needed for
acquisition, location of submission and deadline, auction winner announcing date or time inter-
val, and other pre-conditions that bidders should fulfil.
3. Prospective bidders should present evidence of their legally certified financial statements from
the bank that confirms they have the means to carry out the designed project.
4. Bidder who submits the highest bid price will become auction winner.
5. The winner, once made aware of his winning either in writing or by notice, will have to appear
in person within the specified time given, signs the lease entitlement documents, and procure
his lease certificate.
6. Failure on the part of the winner, who has been made aware of his winning, to appear before
the concerned official and sign the lease documents before the specified deadline will forfeit the
winner from making any claim neither for the land nor for the bid-security he/she has submitted
before taking part in the auction.
3.1.2.2. NEGOTIATION PROCEDURE
1. Any person who wants to get land, upon which construction has already been made, through
negotiation can request for official permission by a written application letter containing the
address of the Kebele, land size needed, presence/absence of construction. In addition, the
type of construction work he/she wants to carry out, supportive documents like financial state-
ments of banks that will corroborate his capacity to do so, along with his terms and conditions
of negotiation, and other important explanations for negotiation shall be submitted.
2. The negotiation could be carried out either directly with a particular developer or with other inter-
ested developers.
3. In contrast with number 1 above, land development and administration authority on its own inter-
est can prepare such sites together with their respective projects and invite interested parties
for negotiations.
4. Developers taking part in such negotiations should submit their bid-security and evidences that
Agency, March 2005
confirm their financial strength for project realization.
5. When land development and administration authority prepares such an auction, the winner is
to be decided by: -
a) On the importance of the expected development benefits of the projected development
undertaking.
b) On the practicality of the strategy proposed by the developer.
c) On the fact that the lease price offered by the developer is higher than the price offered
by the other. On the other hand, the developer, the lease board can fix the price of the
land and decide the winner using the remaining parameters.
6. Whenever more than one developer contend for the same plot and if so happens that they get
the same points, the winner will be decided by drawing a lot.
7. Any land developer who fails to show up before the deadline specified transpires at the office
of the Land Development and Administration Authority to sign the lease agreement documents
even though he has already been informed either in writing or in any other way possible about
the fact that he/she has been selected winner is liable to be penalized for forfeiture, and the
land will be given to somebody else.
3.1.2.3. PROCEDURES FOR RESIDENTIAL HOUSES CONSTRUCTION
1. Land size permitted for the construction of an individual residence in the city is upto 105 m2.
2. Anybody who wants to get land for the construction of his own residence will have to pay the
registration fee, which is decided by the cabinet of the administration.
3. An individual who wants to get land size, more than that decreed above in number 1 for the
construction of individual residences, will have to take part in the mentioned procedures above
/auctions and negotiations/ or participate, when permitted to do so, in the low-cost housing
constructions to be decided by drawing lots.
4. The annual payment per m2 in the urban area with respect to what has been said in Number 1
above is as follows: -
Birr 0.50 cents per m2 per year in the central zone.
Birr 0.35 cents per m2 per year in transition zone.
Birr 0.25 cents per m2 per year in the expansion zone.
3.1.2.4. LEASE PERIOD

The lease period, as indicated in the Dire Dawa Provisional Administration lease regulation No.
3/1996, depends on the nature and purpose of development activities and presented as follows.
1. For housing purpose/private home and real estate/ -------- 99 years.
2. For manufacturing industries -------------------------------- 80 years.
3. For education, health, science & technology, culture, sport, research & study and non-
profit making philanthropist institutions -------------------- 99 years.
4. For commercial purpose--------------------------------------- 70 years.
5. For urban agriculture ----------------------------------------- 15 years.
6. For other purposes ------------------------------------------- 70 years.
Note Notwithstanding the above lease periods:-
A. Ceiling may be set by the administration for other development activities and services
falling short of specificity.
B. Additional ceiling not exceeding by half for each activity and service mentioned above

Agency, March 2005
3.1.3. INDUSTRIAL VILLAGE
The Provisional Administration of Dire Dawa has already taken a number of fundamental measures
including the establishment of an industrial village with all the necessary infrastructure in place. In
an effort to pave the ways for full realization of its vision, i.e. to make Dire Dawa the commercial,
industrial, and efficient service centre of eastern Ethiopia, where not only the agricultural produces
of neighboring national regional states but also the untapped surface and underground resources
of the administration itself will be
processed both for domestic and
export markets. In doing so, the
administration envisages plans to
increase foreign currency earnings
and conserve it as well by produc-
ing products that had been former-
ly imported from other countries.
The industrial village thus estab-

lished to meet satisfactory
response for investors request for
land, be it an Ethiopian national, a
foreigner, or a joint venture, who
wants to take part in any of the above-mentioned sectors.tors or for that matter in other fields is
ready now, and has the following features: -
1. LOCATION, AREA AND SIZE OF INDUSTRIAL VILLAGE
The industrial village found only 5 kilometers to the northwest of Dire Dawa. In fact, the village is
about 750 meters to the right of the all weather Melka Jebdu road. The total area of the industrial
village, which belongs exclusively to the administration, has a land size of 90 hectares.
2. BASIC INFRASTRUCTURE
One of the most important measures taken so far by Dire Dawa Provisional Administration is the
outstanding work it has done by allocating a large amount of budget for infrastructural installation;
road, electricity, water supply line and telephone services required to establish manufacturing proj-
ects.
2.1. ROAD
As mentioned earlier, the industrial village is 750 meters from the main road. The all-weathered
gravel road that links the village with the main road to Melka Jebdu is 30 meters wide. On the other
hand, the gravel roads found in the enclosed industrial village itself are 12, 16 and 22 meters wide,
and yet they have the strength to handle any truck.
2.2. ELECTRICITY
The industrial village mainly gets its power supply from the grid connected to the various hydro-
electric power stations found in the country. To serve as a stand by electric power unit in case there

Agency, March 2005
is a power failure, the installed diesel generator capable of producing 40-mega watts is already
ready to supply electric power to the village.
2.3. TELEPHONE
The main telephone switchboard that will serve the industrial village is found in Melka Jebedu, and
underground telephone cable lines intended to serve more than 300 subscribers have already been
laid at the village in accordance with its master plan. Those investors who have started their work
at the village have already subscribed to some of these lines and are currently using them. The rest
of the lines are still waiting for potential subscribers.
2.4 WATER
The industrial village has a water supply line that is believed to have the capacity to provide reli-
able and sufficient water to all the industrial units that will be established in the area.
3. TYPES OF INDUSTRIES TO BE ESTABILISHED
The industries to be established at the village have to be among the following:-

1) Export Oriented Industries
2) Industries whose produce complement or can be used as input for those mentioned in 1
above; i.e., Export Oriented Industries.
3) Agro-processing Industries
4) Other manufacturing/industrial projects
The strategic location of the industrial village and its proximity to the various means of transporta-
tion coupled with the efficient services offered by the pertinent government institutions, and the
regions geo-physical location that is so close to a seaport will undoubtedly make Dire Dawa the
most suitable urban center for investment in Ethiopia.
3.1.4. SERVICE DELIVERY
The fact that the administration is organized with only two administrative tiers as opposed to the
three or four levels found in the other regional states and that all the pertinent executive institutions
are found in the same physical space are qualities that are unique to Dire Dawa. These qualities
also contribute to the simple, effi-
cient and fast service that have
great significance to the success
of efforts designed to increase
trade and investment in the
administration.
The list of executive, and govern-

ment and municipal institution
organized newly in accordance
with the charter of the city is given
at the end of this magazine.

Agency, March 2005
3.2. INVESTMENT INCENTIVES
In addition to investment incentives given by the Federal Government of Ethiopia, the Dire Dawa
Administration also offers additional incentives to investors who would like to invest in the region.
Thus, the Administration has prepared and implemented guidelines for investment incentives to be
implemented within its own jurisdiction.
In accordance with these guidelines, any investor who would like to participate in private invest-
ment depending on the type and character of investment project he or she submits will be provid-
ed investment incentives like income tax, customs tax (duty) and land.
3.2.1 LAND INCENTIVES

Any investor that wants to take part in the following investment areas is entitled to receiving the
investment incentives offered by the Dire Dawa Administration.
A. For types of investment projects designed to address existing gaps in the social sectors
that should have been covered by the government.
B. For types of investments that will considerably reduce or assist the poverty reduction effort
by virtue of their being labour-intensive.
C. For types of investment projects designed to make use of agricultural produces as their
main inputs (raw-materials) and produce products with added values intended for export-
ing and as a result earn foreign currency.
D. For types of investment projects designed to save foreign currency by producing the basic
consumer goods formerly imported from abroad.
E. For types of investment projects designed to create forward and backward economic link-
ages in the sector.
F. For types of investment projects designed to promote creativity (innovation) among the
society by providing venues for getting acquainted with specialized new know-how and
technological skills.
G. For types of construction projects designed to use and as a result acquaint the society with
low-cost construction technologies.
H. For types of investment projects designed to reduce the prevailing shortage considerably.
3.2.1.1 INVESTMENT SECTORS THAT RECEIVE LAND AS AN INCENTIVE

1. AGROPROCESSING AND OTHER INDUSTRIES.
In this economic sector, investment incentives offered to investors depends on points earned by
the proposed project.
The Followings are additional incentives to be offered for those wishing to invest in this sector
1. The investor that completes his construction work within the time-span specified in the
lease agreement, or the investor whose agriculture or industry has started to market its

Agency, March 2005
produce within the timeframe agreed upon in the lease agreement will get a 1 % discount
from lease payment.
2. Agricultural and other industrial investors categorized from number 2 to 4 in the above table
which shows the relative assessment points given to the projects they had submitted and
who after starting to produce their products request for permission to up grade or expand
their production for export by 10 %, and by so doing create an employment opportunity for
additional workers to achieve the stated rise in their produce will receive a 2(two) % reduc-
tion from the remaining lease payment.
3. The investor, who is able to pay all the lease payment at once, will be exempted from pay-
ing 10 % of the total lease cost, while the investor who is able to finish his lease payment in
5 years will receive a 5 % exemption from his payment. The investor who finishes his lease
payment in 10 years will receive a 1 % reduction.
2. RESIDENTIAL HOUSES AND REAL STATE DEVELOPMENT

2.1. Those who would like to construct a residential house for a family in the 105m2 of land can
get land freely with out any lease payment.
2.2. Those who would like to construct a residential house on a land bigger than the one speci-
fied above will have to pay in accordance with the rule in the procedures for the provision of
land for the construction of residen-
tial houses.
2.3. On the other hand, when the
residential house to be constructed
by the investor can accommodate
30 family members, the investor
can have a 20 % reduction from the
lease payment, while he can get a
2 % progressive reduction for
every 10 houses he constructs
then after.
2.4. Those who construct a G + 3
and above will receive a reduction
of 5 % of the required payment for
every additional floor they set up.
NOTICE: We would like to inform that in this case the down payment is 10 %, grace period 2 years,
and the period of time for settling the remaining payment is 30 years.
3. EDUCATION
NOTICE: All of the above educational institutions except Kindergartens are required to be G + 2.

Agency, March 2005
While the foundation of a Kindergarten to be constructed separately, should rest in the 2000 M2 of
land for a G + 0 structure.
1. The requests for more land

made by the educational
institutions that have been
providing their service up to
now is to be decided; that is,
whether they are to benefit
from the investment incen-
tives to be offered for
investors in the educational
sector, after verifying whether
the schools do meet the
requirements specified, and
whether the proposed plan
for up grading or expansion
work being sought is in
agreement with the master
plan of the city, and after
weighing the amount of expense the up grading work entails.
2. The grace period allowed for those that desire to construct Kindergarten is 2 years, the length of
time permitted for completing the remaining payment is 40 years, and the advance payment to be
made is 5 %.
4. HEALTH
REQUIREMENTS TO BE INVESTMENT
TYPE OF HEALTH
FULFILLED INCENTIVES PROVIDED
INSTITUTION
NUBMER OF AREA SIZE UP ADVANCE PAY- COST REDUCTION
BEDS TO M 2 MENT % IN %
Higher Clinic 1100 5 95

Medium Sized Hospital 100199 5500 5 95
Higher Hospital Above 200 7500 5 95
NOTICE:-
1. The higher clinics can become beneficiaries of the proposed investment incentives provided that
they have the means and manpower beforehand to meet any one of the following referral cases
satisfactorily. That is, Radiology,
internist, ENT- Specialist,
Neurologist, psychiatrist, and
Pathologist.
2. When they start their construc-
tion all should begin by construct-
ing a foundation for a G + 2 con-
struction.
3. Any request made for land to be
used for the expansion or up grad-
ing by health institutions providing
their services to the public now is to
be decided first of all by examining

Agency, March 2005
whether they are able to meet the above mentioned pre-conditions, whether their proposed expan-
sion project is in line with the master plan of the city, and last but not least by assessing the amount
of capital the project requires.
5. TOURISIM
REQUIREMENTS TO BE MET INCENTIVES
STANDARD OF COMPLETION
HEIGHT EMPLOY- ADVANCE GRACE AMOUNTOF
HOTEL N U M B E R SIZE OF MENT
OF REMAIN-
COST
OF SEATS THE OF PAYMENT PERIOD ING REDUCTION
OPPORTUNI- PAYMENT
AREA BULID- TY % OF IN %
IN. YEARS
ING YEARS
THREE STAR > 200 UP TO G + 3 AND ABOVE 30 5 5 40 70

HOTEL & ABOVE 10000 M2 ABOVE
6. OTHER INCENTIVES
1. Those investors who would like to take part in waste collection and transportation sector will be
required to pay only 20% of the lease payment for the places they use as temporary waste collec-
tion points and machinery parking with a down payment of 5% of the total sum, a grace period of
5 years, and a period of 40 years to settle the remaining payment.
2. Dire Dawa is at present serving to a certain level as a dry port terminal for both incoming and out-
going items via Port Djibouti, the magnitude of this service is bound to grow as a result of the
unprecedented increase in the number of investors getting established in all parts of the country to
produce different items most, of which are designed for export purposes. Thus, investors who
would like to construct refrigerated warehouses where perishable items like edible foodstuffs could
be stored without losing their freshness will get a 40% reduction from their lease payment, make
only a 5% down payment, have a 5-year-long grace period, and have a period of 5 years to com-
plete the remaining payment.
3. The investor that constructs more than ten houses as per the standard established by the con-
cerned authority to the families displaced for his investment project will be exempted from paying
a sum of lease money that is equivalent to the amount of money he had used to construct the hous-
es, he will, furthermore, be given a 5% reduction from the remaining lease payment as an addi-
tional incentive.
4. The investor that is able to carry out the construction of infrastructure in an area of 5 hectares as
per the standard set up by the authority for the infrastructure will be exempted from paying a sum
of money equivalent to the amount of money he had expended to carry out the construction of the
infrastructure. He will be, moreover, be given a 5% percent reduction from the remaining lease pay-
ment as an additional incentive.
5. The investor that is able to carry out the construction of infrastructure in an area of 5 hectares as
per the standard set by the authority for the infrastructure will be exempted from paying a sum the
families so as to make use of the land they had held until for setting of money equivalent to the
amount of money he had expended to carry out the construction of the infrastructure. He will be,
moreover, be given a 5% percent reduction from the remaining lease payment as an additional
incentive. If and when the amount of his expense is higher than the lease amount, the issue will be
settled through negotiations.
6. The board will decide other special areas that deserve to receive incentives that are not included in
the above-mentioned categories.
7. With respect to investments in the fields that have not been cited along with those chosen to
become recipients of the investment incentive regulation, the following will be true: -
Amount of lease payment 100%

Down payment. 10%

Agency, March 2005
Grace period for those who invest less than one million Capital 2 years
For those who want to invest from 1 to 5 million capital . . . 3 years
Above 5 million capital . . . 5 years
Deadline for settling the remaining payment . . . 30 years
8. For those investment sectors whose permitted size is not included in the investment incentive reg-
ulation, a study will be carried out and decision will be made by the board of the concerned sector
office and the land development authority.
7. GENERAL GUIDELINES FOR THE PROVISION OF INCENTIVES

1. Those investors that claim that they fulfil the preconditions specified in the guidelines to become
recipients of investment incentives should present their complete case with the necessary docu-
ments when they submit their application for land at the beginning.
2. When the land is eventually given to the investor, the project document, the incentives offered at
the time, and the lease agreement will be compiled together.
3. In order to decide the relative worth of each investment project with respect to its relevance to alle-
viating the prevailing conditions in the city, the Dire Dawa Provisional Administration can set a stan-
dard. The incentives offered to the investors will become effective as of the time that they complete
their construction and start production or start providing their service, and thus prove that they are
working in accordance with the particular investment sector they have applied for by providing sat-
isfactory information about whether they have attained the objectives they have given in the invest-
ment assessment standard. Thus, the information they give could be: amounts of produce they
have exported, number of beds they have in the hospital, number of classrooms the have in the
school, etc, which need to be verified by the relevant government bureau or office; that is, the
regional health bureau, education office, etc.
4. The concerned authority thus approached by the investors will present their case with the relevant
evidence to the board to get its ratification.
5. The information provided by the investors about the level of production they have attained once
the project work is completed and production started will be instrumental in reaching a decision
whether to honor the incentive offered or not. For instance, if the evidence produced by the investor
entitled him to getting land free of any lease payment, every payment he has made until then
including his down payment will be refunded to him. On the other hand, if the information he has
supplied to the office fails short of the level that merits him the incentive reward offered, he would
not be given the incentive; however, the rest of the lease agreement reached between the investor
and the office will remain binding.
6. The request for additional land made by investors taking part in agro-industries or other industries
that have already started to produce or those that will start their production in the future can ben-
efit from the investment incentive offered provided that the expansion project meets the standards
in the investment incentive regulations.
3.2.2. EXEMPTION FROM INCOME TAXES
1. INVESTMENT ACTIVITIES ELIGIBLE FOR INCOME TAX EXEMPTION

1.1. Where an investor engaged in manufacturing, or agro-industrial activities or in the production of
the items of agricultural products determined by the Federal Investment Board is entitled to
income tax exemptions provided that he;
A. Exports 50% of his produces.
B. Supplies at least 75% (seventy five percent) of his products to an exporter as a production
input; he shall be eligible for tax exemption for 5 years.
1.2. Notwithstanding the provision of Sub Article 1.1 the Board may, under special circumstances,
grant income tax exemptions for a period not longer than 7 years. However, the granting of

Agency, March 2005
income tax exemption for a period longer than 7 years requires the decisions of the Council of
Ministers.
1.3. An investor engaged in activities mentioned under Sub Article 1.1. of this Article who exports less
than 50% (fifty percent) of his products or supplies his supplies only to the domestic market shall
be eligible for income tax exemption for 2 years.
1.4. Notwithstanding the provision of sub article 1.3 of this Article, the Board may, under special cir-
cumstances, grant income tax exemption for a period not longer than 5 years.
1.5. Notwithstanding the provision of Sub Article 1.3 of this Article, directives issued by the Board may
prohibit exemption from income tax with respect to an investor who supplies his products only to
the domestic market.
1.6. Notwithstanding the provision of Sub Article 1.2 and 1.3. of this Article, an investor who exports
hides and skins after processing them up to crust level may not be entitled to incentives provid-
ed therewith.
1.7. The income tax exemption provided under the provision of Article 1 of this regulation shall become
effective when the investor provides the information for the relevant revenue collecting institution
and its validity is ascertained for each income tax period.
2. INCOME TAX EXEMPTION FOR EXPANSION OR UPGRADING

An investor taking part in the activities specified in Article 4, Sub-article 1, who exports at least 50%
(fifty per cent) of his products, and increases, in value, his production by 25% shall be eligible for a 2-
year-long income tax exemption
3. COMMENCEMENT OF PERIOD OF EXEMPTION FROM INCOME TAX.
The period of exemption from income tax shall begin from the date of commencement of production
or the date of provision of services, as the case may be.
4. CARRY FORWARD OF LOSSES

An investor who has incurred loss within the period of the income tax exemption shall be allowed to
carry forward his loss for half of the income exemption period, after the expiry of such period.
3.2.3. EXEMPTION FROM PAYMENT OF CUSTOMS DUTY
1. An investor shall be allowed to import duty-free capital goods and construction materials necessary
for the establishment of a new enterprise or for the expansion or up grading of an existing enter-
prise.
2. In addition, an investor granted with a customs duty exemption privilege shall be allowed to import
duty-free capital goods necessary for his enterprise.
3. Notwithstanding the provisions of Sub-articles (1) and (2) of this Article the Board may, by its direc-
tives, ban the duty-free importation of capital goods and construction materials where it finds that
they are locally produced with a competitive price, quality, and quantity.
4. An investor eligible for duty-free importation of capital goods pursuant to these Regulations shall be
given the same privilege for spare parts whose value is not greater than 15% of the total value of
the capital goods to be imported.
5. Condition for Importing vechiles duty-free - The Board shall determine, by its directives, conditions
for importing vehicles duty-free depending on the type and nature of the project. However, any
investor may import duty-free:

Agency, March 2005
A. Ambulances for employees that are needed for emergency cases;
B. Buses for tour operation services.
6. Areas of Investtment not eligible for customs duty exemption - The following areas of investment are not
eligible for exemption from the payment of customs duty:
A. Hotels with the exceptions of the so-called star-designated hotels, motels, pensions, tea rooms,
bars, coffee shops, restaurants, night clubs which do not have international slandered.
B. Wholesale, retail, and import trade
C. Maintenance services
D. Commercial road transport and car- rental services
E. Postal and courier services
F. Real estate development
G. Business and management consultancy service
H. Advertisement services
I. Cinematography and related services
J. Radio and television broadcasting services
K. Theatre and cinema hall operation
L. Customs clearance services
M. Laundry services
N. Travel agency, trade auxiliary, ticket selling services
O. Lottery and games of a similar nature
7. Transfer of Capital Goods Imported Free of customs Duty - Capital goods imported free of cus-
toms duty shall not be transferred to third parties not entitled to similar duty free privileges, unless prior
payment of the customs duty has been affected thereon.
3.3. INFRASTRUCTURE
The Dire Dawa Administration is one of
regions in the country that have basic
infrastructure to meet satisfactorily the
needs of private investors. In this respect,
the basic infrastructure that are hoped to
play a pivotal role to attract more and
more private investors to the region are
the following: -
3.3.1.TELECOMMUNICATIONS
SERVICE
Dire Dawa has a modern digital

microwave that enables telephone,
Internet service, telex, fax, mobile tele-
phone service, which provide access to
communicate with anyone in any part of
the world easily.
3.1.2. ROADS
There are a number of roads with varying
standards connecting Dire Dawa with var-

Agency, March 2005
ious urban centers in the neigh-
boring regional states, and the
neighboring country, Djibouti. The
presence of a plan to upgrade the
roads to a higher level is a situa-
tion that is bound to play a crucial
role to the growth in the private
investment sector in the region.
3.1.3. AIR TRANSPORT

Dire Dawa has an international
airport that plays an essential role
by ensuring its connection with the
rest of the world.
3.3.4 RAILWAY TRANS-

PORTATION
The Ethio-Djibouti Railway Line passes through Dire

Dawa. The railway line will play an invaluable role,
as always, to the effort to move the various prod-
ucts, raw materials, consumer goods, etc., to and fro
the country. It is an aspect that will play crucial roles

to the increase in the number of private investors
willing to invest in the region.
3.3.5. WATER SUPPLY
Dire Dawa is endowed with a great deal of

underground water resource that is estimated
to hold as much as 20 billion cubic meters of
water.
3.3.6. ELECTRIC POWER SUPPLY

Dire Dawa receives its electric power supply
from three sub-stations found in the country.
The total amount of electric power that the city
gets from these sub-station is 163-mega watts,
of which has so far been able to make use of
only 33 mega watts (about 20%), while the

Agency, March 2005
remaining electric power; i.e., about 130
mega watts (80%) has not yet been
used, and so the private investor who
wants to invest his money in Dire Dawa
does not need to worry about power
shortage because the city has a suffi-
cient and reliable supply of electric
power. Contingency means of powerd
supply that could be used in the event
that there is a power failure in the sub-
stations has already been put in place.
Thus, a diesel power generator that can
produce 40 mega watt of electric power
has recently been installed near Melka
Jebdu is ready to provide its service.
3.4. PROVISION OF SOCIAL SERVICES.
3.4.1. EDUCATION
There are 52 educational institu-

tions providing education service to
the people in the administration at
present. The data given in the fol-
lowing tables will provide the read-
er a consolidated picture of the
schools by type, grade levels, loca-
tion, student number by gender,
etc.
1. Kindergartens
Number of students Number of teachers
Number Type of school Number of schools Male Female Total Male Female Total
1. Private investors 9 756 692 1448 5 41 4

2. Kenema 3 92 69 161 - 4 4
3. Community 1 39 34 73 - 2 2
4. Missions 3 265 244 509 - 11 11
5 Public/ government 1 50 50 100 4 1 5
Total 17 1202 1089 2291 9 59 68
2.Elementery
Number No of students /1-4/ No of students No of Teachers
S. NO Ownership of the of 1st cycle 2nd cycle
school M F TOTAL M F TOTAL M F TOTAL
1. GOVERNMENT(urban) 14 5760 53811 11145 6208 5213 11421 343 187 530
2 Private (urban) 14 2557 2625 5182 1887 1049 3926 164 40 204
Total 28 8317 8010 16327 8095 7253 1534 507 227 734

Agency, March 2005
Student-- Section Ratio
S.No LEVEL OF THE OWNERSHIP OF LOCATION STUDENT- SE RATIO
SCHOOL THE SCHOOL THE SCHOOL
1 Elementary Government Rural 48:1
2 >> Government Urban 77:1
3 >> Private Urban 76:1
3. Secondary School
3.4.2. HEALTH
The following are the health institutions that are at present providing health services to the population of Dire
Dawa, which is estimated to be now over 369,674, and people from the bordering areas of the neighboring
regional states, and even people from the neighboring country, Djibouti.

Agency, March 2005
Most, if not all, of the serious hospital treatments to nearly all the people of the administration, people from
the surrounding areas of the neighboring regional states, and even some from Djibouti get treated at the two
government hospitals, while those that can afford to pay go to the one small privately owned hospital.
The number of beds, and OP cases being treated by the two government hospitals in the city are given in
the following table. (We were unable to get the OP number from the one private hospital in the city.)
SERVICE DELIVERY OF THE DIL CHORA HOSPITAL

A brief examination of the service delivery of the largest hospital in the region, the Dil Chora Hospital, pro-
viding 80% of the hospital service, we hope, will suffice to clarify the prevailing situation with respect to health
service provision in the region, and show how much work needs to be covered by investors interested in tak-
ing part in the health sector.
The Dil Chora Hospital has 176 health professionals, 250 beds, and 13 wards, which on average handle
about 160 OPs daily. According to a statistical data collected about the outpatients that got their treatment
at this hospital daily between April 2002, and October 2003, it was found that on average 4140 patients were
treated every month, which, in other words, about 160 OP per day.
The following table shows the ratio of the health professionals of the hospital with their number of patients,
and the acceptable national standard ratios for the particular health profession.

Agency, March 2005
3.5. FINANCIAL INSTITUTIONS
There are a number of government and private institu-
tions providing efficient and fast bank and insurance
services in Dire Dawa.
The banking and insurance institutions giving their
financial service in the city are the following: -
1. Government Bank and Insurance

Institutions
1.1 Commercial Bank of Ethiopia
1.2 National Bank of Ethiopia
1.3 Development Bank of Ethiopia
1.4 Construction and Business Bank
1.5 Ethiopian Insurance Corporation
2. Private Banks and Insurance

2.1. Dashen Bank
2.2. Wogagane Bank
2.3. Awash Bank
2.4 Abyssinia Bank
2.5. Nile Insurance
2.6. Nice Insurance
2.7. Nyala Insurance
2.8. Nib Insurance
2.9. Global Insurance
2.10. Africa Insurance
2.11. Awash Insurance
2.12. Hibret Insurance
3.6. INSTITUTIONS PROVIDING

BUSINESS SERVICE
3.6.1. Foreign Trade

The Constitution of the Federal Democratic
Republic of Ethiopia proclaims that the foreign trade of the country is to be administered by the federal gov-
ernment. On the other hand, the need to facilitate and speed up the import export trade passing through
Dire Dawa has necessitated the establishment of a foreign trade branch office in the city that will be account-
able to the federal ministry of trade and industry. The branch office has the responsibility to ensure the
implementation of the rules and regulations of foreign trade indorsed by the government in the eastern
part of Ethiopia, and is also responsible to
provide licenses of foreign trade and other
related services to those investors taking
part in the sector.
The foreign trade activities that Dire Dawa
foreign trade branch office has the mandate
to provide trade licenses are the following: -
1) Export trade
2) Import trade
3) Import-export trade
4) Foreign trade agency
5) Higher educational institutions
6) Hospitals
7) Trans-regional hotels

Agency, March 2005
8) Trans-regional tourist services
Trans-regional Safari, Trans-regional Touring, Trans-regional Safari, Touring, and travel agency
9) Road Transportation Service
Public transport
Dry cargo freight
Liquid cargo freight
10) Licenses for press products whose circulations is not restricted by regional boundaries.
11) Customs transit services
12) Express postal service
13) import and export trade inspection services
14) Industries established by foreigners
Agricultural services established by foreigners
Grade one construction firms
Or construction consultants
For water related construction work
For health related work services
For star-designated hotels
International restaurants specializing in the preparation of foods from particular countries
Engineering or other technical consultancy services
17) For the other investment types, though not included in this list, that the Council of Ministers
decides should be given to foreign investors.
3.6.2. Quarantine Services for Plants and Animal

There are institutions that provide quarantine services for all sorts of agricultural products including
plants, animals, and animal products. The presence of such facilitate that gives complete and efficient
service in the city undoubtedly contribute
to the provision of fast service delivery to
the investors in this respect.
3.6.3. Maritime Transit and

Customs services
The region has got well-organized efficient
institutions providing maritime transit and
customs services, the investors will, there-
fore, always get fast services from them.
3.6.4. Port Service
Dire Dawa is only 313 kilometers from

Port Djibouti, which make it by far the closest urban center in the country to the port handling if not all
the import and export trade. The abundant pres-
ence of air, surface, and rail transport in the city
ensures that the transportation of raw materials,
machinery, means of production, consumer goods,
commodities, agricultural produces, in short, the
movement of all items of the import and export trade
can be done without any difficulty.
3.7. AVAILABILITY OF MANPOWER

From the total work force 75.9% (84161) are at pres-
ent employed in different work fields, 4.9% (5413) are
semiskilled unemployed people, 19.2% (21260) are

Agency, March 2005
unemployed and are unskilled.
From the total urban and rural population of the region 64.7% is literate, while from the working age of 15
55 year olds, 39.6% have had more than grade 12 level education. Most of the work force found in the rural
areas is employed in agriculture, and agricultural productions, while from the employed work force in the city
30% are employed in service delivery fields and shop keeping, 22.9% in low-income work, 12.8% in hand-
crafts, and 7.4% as professionals. The statistics we have seen so far in this section concerning the avail-
ability of manpower in the region indicates that there is no shortage of both semi-skilled and unskilled man-
power.
3.8. MARKET
Dire Dawa by virtue of its geo-physical location is acting as the trade center for Harrari, Eastern and Western
Oromiya, the Somali, and Afar National Regional States, and even for the neighboring State of Djibouti. The
number of population residing in the neighbouring regions of Dire Dawa is estimated to be;
1. Harari National Regional Sate - 185,000

2. Eastern and Western Oromiya zones -3,102,525
3. Somali National Regional State - 4,109,000
4. Afar National Regional State - 1,330,000
What makes Dire Dawa the ideal industrial and business
center of Eastern Ethiopia is its location so close to a port
and to such a potential market. The investor that estab-
lishes his industry, or service-providing firm in the city is
bound to be overwhelmed by the sheer size of the
demand he has to meet.
4. RESOURCE BASE AND INVEST-

MENT OPPORTUNITIES
4.1. RESOURCE BASES
1. AGRICULTURAL SECTOR
The livelihood of the population of the rural section of the Dire Dawa Provisional Administration is basically
based on small-scale agriculture that involves animal husbandry, and farming of cash crops like coffee, chat,
fruits, and vegetables.
The fertile soil and the warm climatic conditions of the region, according to surveys conducted in the past,
are suitable to the establishment of modern farms that cultivate fruits, vegetables, oilseeds, and other cash
crops, and animal breeding, as well as the large-scale development of other related agricultural sectors.
The area that is exceptionally suited to

these and other related agricultural
activities are located about 15 kilome-
ters from Dire Dawa at the place called
Aseliso. The size of the land that could
be used for this purpose is over 30
thousand hectares.
When compared with its larger neigh-

bors, Dire Dawa has smaller number of
animal wealth. However, the availability
of the favorable conditions such as a
well developed infrastructure, and its
proximity to the port and to the areas
which have larger number of animals,

Agency, March 2005
produce much more fruits and vegetable, oilseeds, and coffee, on the other hand, ensures the presence of
a reliable supply of raw materials for the investors that want to take part in the sector.
Water, which is an indispensable aspect of any development undertaking, is abundantly present in the region
from two known sources; i.e., from rain and from the large underground water reservoirs. It is believed that
the region is endowed with an underground water supply having the potential to produce over 20 billion cubic
meters of underground water that can be exploited without digging very far, and without much difficulty.
2. INDUSTRIAL SECTOR
According to a research carried out by the World Bank and World Food Program in 2003, the industries
found in Ethiopia were found to be lacking in vision; i.e., they concentrated on producing similar prod-
ucts mostly for local consumptions, and they made use of mostly imported raw materials for their pro-
ductions. While the quality, quantity, amount of foreign earnings they make, the existence of horizontal
relationship among the producers, the economic relationship and support with their suppliers of raw
materials, and their capacity to create employment opportunities by the few that managed to export their
products was very limited.
This is the legacy that this investment promotion booklet is intended to change on a regional level. The
establishment of agro-processing and
other industries in Dire Dawa that will
make use of either the abundant agri-
cultural produces of the surrounding
areas, or the surface and underground
resources as raw materials both for the
local and for export to neighbouring
countries like Djibouti, Somalia, Saudi
Arabia, and even to the Middle East
market is a lucrative prospect for any
investor especially when it is seen in the
light of the investment incentives by the
regional administration.
The fact that the administration has already prepared only five kilometres from the city a 90-hectar-wide
industrial village with everything required including an emergency power supply with a capacity to pro-
duce 40 mega watts in the event there is a power failure in the area indicates its resolve and determi-
nation to provide all the assistance it could to those willing to invest in the region.
3. MINING SECTOR
Studies carried out previously in the Dire Dawa Administration, show that the region has a number of
minerals, and stones that can have great economic significance if they are used as raw materials for
industries. None of the minerals have so far been used for such purposes.
The studies indicate that the region has good quality construction minerals and stones that include
among others limestone, silica, mica, feldspar, and sand abundantly.
4. SOCIAL SERVICES
This is one of the sectors that, on account of factors such as financial problems, and the lack of vision
and commitment among successive government leaders of the region, etc., have not been developed
in accordance with the unprecedented rise in the population size of the city. Thus, the two social serv-
ice delivering sectors- health, and education- are sectors that need greater participation from the
investors.
To provide a clear picture of the extent of the level of participation required from the private investors in
this regard, let us see the gaps still prevailing in the services of the two sectors briefly.

Agency, March 2005
4.1. Health
The resources that are available and the population size, etc., are given briefly below: -
Hospitals 2 in number
Health centers 3, and 18 Clinic
Population of the administration is 369,674, and is expected to double in 18 years time
Service is, moreover, given to peoples of neighboring regional states, and even peoples from
Djibouti.
Ever growing unlikelihood of getting bed at the hospitals (95 it was 78% only)
The fact that the complete medical treatments of 5 types of health problems are unavailable in the
city, and the fact that the people, therefore, have to go to Addis Ababa to get the treatment at a great
expense.
The fact that the number of people being affected by the HIV/AIDS and other diseases is increasing.
4.2. Education
4.2.1. Kindergartens
Number of school age population37557

Number of school age population enrolled in kindergartens 2291 coverage only 6.1%
Number of schools 17
Average number of students in each school 135
This shows that establishment of kindergartens to address this imbalance is imperative.
4.2.2. Primary Schools
Number school age population for the level

Number of schools 28
Number of school age population enrolled in the primary schools39593 coverage 80%
Average annual increase of school age population is 2.9%, which means that the number of school
age population will be double what it is now in 24 years time.
This implies that even the maintaining of this level of GER of 80% will necessitate the expansion or
construction of 15 more classrooms to accommodate the additional 1131 school age population
every year. This will be in contravention of UPE, the international agreement the country has
signed.
4.2.3. Secondary Schools

The number of secondary schools is 5
Grade 11-12 college preparatory school is1
The number of schools providing 10+1, 10+2 TEVT training is 1.
Number of school age population for this grade level is 28312
Number of school age population for this grade level attending schools is7078. This indicates cov-
erage of 24% now.
The number of school age population studying at this level of education will be double what it is now
in just 5 years time.
To maintain the present level of coverage, a TVET school that can accommodate at least 1156 stu-
dents every two years in its 10+1 and 10+2 levels will be needed.
5. HOTELS AND TRANSPORT

The hotel services available in the city now is in no way up to the international standard expected by

Agency, March 2005
the growing number of visitors including
tourists, businessmen, ambassadors, feder-
al government officials, etc.
The establishment of such hotels will

undoubtedly be of great profitability to both
the investors and to the city itself because
the very presence of the hotels will start
photograph an economic ripple going that
will have a positive impact on all aspects of
life and sectors in the city as a whole.
6. REAL ESTATE DEVELOP-

MENT
Not unlike all urban centres found in
Ethiopia, there is an acute housing shortage in Dire Dawa resulting from the financial inability of the
dwellers to construct houses, and exacerbated by the year-long ban of offering land for those who want-
ed to build houses owing to the corrupt practice of officials.
There is, as a result, a large backlog of residen-

tial household construction work for the private
investors that want to construct especially low-
cost houses and condominium.
4.2. INVESTMENT OPPORTUNITIES

We have so far examined the resource bases, the
prevailing gaps in the social service delivery,
hotels, tourism and transport, and housing short-
age. From the prevailing objective situation in the
city, we offer the prospective investors the follow-
ing outline of investment alternatives with respect
to each sector.
1. AGRICULTURE
1.1. Animal Breeding
Diary
Fattening ox, sheep, and goat
Poultry
Ostrich
Apiary
1.2. Plant Production
Fruits and vegetable development
Stimulating plantscoffee development
Oil seeds ground nut development
2. INDUSTRIES
2.1. Agro-processing industries
Diary and diary product processing
Abattoir service for processing the flesh of poultry, ox, sheep, and goat intended for export.
Coffee processing
Processing of fruit and vegetable

Agency, March 2005
Honey and wax processing
Hide and skin processing
Corn flex processing
Corn oil processing
Corn starch processing
2.2. Other industries and minerals

Packaging cases/materials to pack plant and animal products
Improved agricultural equipment and input processing
Metallurgical engineering industries that can produce windmills, agricultural tools, solar con-
verters, sewing machines, etc.
Pharmaceutical factories
Organic fertilizer production
Animal feed processing factory
Leather product processing factory
Furniture manufacturing
Cement, lime, stucco, and gesso producing factories
Mineral water packing
Factory for the production of chemicals that will be used for the processing of leather, and
leather products, textiles, and agricultural development
Brick and tube productions
Stone crushers that produce gravel to be used for the buildings and road construction.
Processing of sand used for water filtration
manufacturing of glass, bottle, and mirror.
3. SOCIAL SERVICES RENDERING INSTITUTIONS
3.1. Health
A hospital that has the capacity to serve as referral hospitals
Higher clinic
Medium level clinic
Lower level clinic
Specialized clinic
3.2. Education
Kindergartens
Primary schools
Primary and secondary schools
Secondary schools
Grades 910
Grades 1112 (college preparatory)
10+1, and 10+2 (vocational training schools)
Universities and colleges
4. HOTEL AND TRANSPORT
4.1. Hotel and recreation

3 Star Hotels and above that have got their own conference centers
Having entertainment/recreational and sport facilities for all age groups

Agency, March 2005
4.2. Transport
Trucks that can be used to transport live animals such as oxen, sheep, etc.
Refrigerated trucks that could be used to transport meat, egg, milk, and milk products.
Airplanes that can accommodate 20 passengers, or carry up to 2700 kilogram of cargo.
Car-rental service
5. REAL ESTATE DEVELOPMENT
Constructions and handover of low-cost houses

Construction of apartments for residential purposes
Other real estate development work
5. TOURISIM
5.1. Tourist attraction centers

The Dire Dawa Region has a rich wealth of pre-historic cave paintings some of which have achieved
international recognition through the efforts of the French and American Geologists that have studied
them several times in the last 75 years, while there are still other caves that have never been studied
so far.
5.1.1. Lega Oda Pre-historic Cave

A French Priest Father Azais discovered this cave in 1930. It is located about 38 kilometers to the west
of Dire Dawa. There is a 25 minute walk from the place you stop your car to the cave. The cave open-
ing is 17x1.70 meters wide. The cave shows the
pictures of domestic animals and human being
painted in white, red, and black colors.
5.1.2. Pork Epic Cave

This is the first cave to be discovered in the
region by another French Priest, Father Teilhard de

Chardin in 1929. PorkEpic Cave is about 3 kilometres
from the city. One needs to take the 140-meter-high
steep climb to reach the cave opening. The paintings in
the cave
consist of
animals
and men painted in red, brown, and in black colours.
5.1.3. Gode Agawa

Gode Agawa is a pre-historic cave found about 28 kilo-
metres from Dire Dawa, and has a height of 2050meters
above sea level. The cave has paintings of domestic ani-
mals, and the palms of human hands in red and white
colours.

Agency, March 2005
5.1.4. Enkufetu Cave
This is a surface cave found near the fringe of the city. The
cave is very large, but unlike the other caves so far men-
tioned it has not been much studied so far. If anything the
only remarkable aspect of this cave its sheer size and the
presence of a hot spot on one side of the cave is wall and
a cold one on the other.
5.1.5. Memorial Burial Place for African Soldiers

The remains of the British airmen and African soldiers who, during the second World War, fought
besides the Ethiopian forces to liberate Ethiopia from
Italian occupation.
5.1.6. The Ancient Railway Station

The railway line that reached Dire Dawa in 1902 is
believed to
have been
the reason
the city
came into
being in the
first place. That is why the railway station is one of the des-
tinations of tourists and other visitors coming to the city.
5.1.7. Kefira a Traditional Market Place

Kefira is a traditional market place where one can see the
colorful presentation of all people of the region in their cultural dresses. The presence of camels, don-
keys, and the inevitable Gharris, two wheeled carts
drown by a horse or a mule, gives it an aura of going back
to medieval times.
5.1.8. Italian Mosque

This is one of largest mosques found in the city. It is
called Italian Mosque because the Italians built it during
their short-lived occupation of Ethiopia.
5.1.9.Catholic Church. OF Awale

St. Michels Catholic Church was built over 115
years ago, and is located 26 kilometres from the
city
near a place called Beyo Awale. During the month of

October Catholic believers from Dire Dawa, Harar, and
other place annually gather at the church in there thou-
sands.

Agency, March 2005
5.2. TOURISM OPPORTUNITIES
In view of the above mentioned tourist sites within the region and in view of the strategic location of the
city in relation with the other places of great tourist attraction in Eastern Ethiopia; that is, Eastern and
Western Oromia, Afar, Harari, and Somali National Regional States, the city can become an integral part
of the well developed tourist industry in the regions above mentioned by taking the correct steps to
strengthen its promising tourist potential.
6. SERVICE DELIVERY SYSTEM

In relation with trade, tourism, and investment, the particular offices and institutions the investors should
contact, and the items of documents they should carry or the conditions they should fulfil are listed
below.
6.1. PROVISION OF INVESTMENT LICENSES

The preconditions that the investor should fulfil to get the services given by the investment agency are
the following: -
6.1.1. For Investments made by Ethiopian Nationals

1. Investment by an individual
An application letter written by the investor himself or his authorized representative.
If the application is submitted, he should submit a photocopy of the official letter of authorization.
If the investor is a foreigner who regularly lives in Ethiopia, and who has received a certificate that
shows that he is to be considered as an Ethiopian investor, he should submit a copy of the cer-
tificate that entitles him as an Ethiopian investor, or provide the written documents that state that
he is an Ethiopian by birth.
Two recently taken passport size photographs of the investor.
2. Investment by Business Companies

An investment application by representative of the business company.
If a legal representative of the company submits the investment application, he should also submit
a copy of the official letter of authorization.
The documents of establishment of the company and a copy of its rules and regulations
In the event there is a foreigner that either has procured an Ethiopian Investor status on account
of his living regularly, or if he is an Ethiopian by birth, then copies of the documents that corrobo-
rate the situation should also be submitted.
3. For Investments by Public Enterprise

An investment application signed by head of the enterprise.
The mandates of its establishment, and a copy of its operational rules, and regulations.
6.1.2. For Expanding and Upgrading of Existing Investment Fields

An investment application for the expansion or upgrading of the existing business signed by either the
investor himself or his legal representative.
A copy of the official letter of authorization given to the legal representative by the investor should be
submitted if the representative signs the application for the expansion or upgrading investment permit.
A copy of the trade license previously obtained for the existing business.

Agency, March 2005
6.1.3. Renewal of Investment Licenses
A form to be filled by the investor about the implementation of the project
6.1.4. Replacement of a Damaged, or Lost Investment License
An application letter signed either by the investor or his legal representative.

If the application thus made concerns the replacement of a damaged license, the damaged invest-
ment license has to be returned.
If the application thus made concerns the replacement of a lost or missing license, a written state-
ment about the lost or missing investment license signed either by the investor or his legal repre-
sentative should be submitted.
A copy of the official letter of authorization given to the legal representative by the investor should
be submitted if his legal representative signs the application for the replacement of the missing
investment license.
Two recently taken passport size photographs of the investor.
6.1.5. SERVICE CHARGES
The amount of service charges to be made to the Investment Agency of the Dire Dawa Provisional
Administration for the different services it gives are indicated in the following table: -
6.2. CONSTRUCTION LICENSE
As soon as the investors have secured the land permit for their investment, they have to request con-
struction permit from the Infrastructure Agency by fulfilling the following preconditions.
1. By presenting the legal entitlement certificate of the land and the official sketch or drawing of the
plot of land.
2. If the construction being sought is G+0 and G+1, the professionally made architectural and struc-
tural designs of the building, site plan, specifications, and estimated cost of the building.
3. If the building is above G+1, the buildings architectural, structural, sanitary, electrical designs pre-
pared by a professional, and the site plan, the specification of the building and the estimated cost.
6.3. REGISTRATION AND ISSUANCE OF TRADE LICENSES

The pre-conditions that investors should fulfil to get the services provided by the Trade and Industry
Bureau are the following: -

Agency, March 2005
6.3.1. Main Registration
6.3.1.1. Registration of Individual Traders
1. Recently renewed or recently obtained ID.

2. A recently taken photograph.
3. If the investor is too young to represent/ take care of his own financial and business inter-
ests, his guardian or his family custodians, who have the legitimacy endorsed to do so.
4. The previous trade license if there is one.
5. If the legal representative of the investor signs the application form, he will have to pro-
vide a copy of his official authorization to do so.
6. If a foreigner that has become Ethiopian National fills the application, then he will have to
produce an ID card to corroborate his claim.
6.3.1.2. Main Registration Concerning Business Companies

Establishment mandate, and operational rules and regulations.
The above-mentioned documents of the company should comply and prove its compati-
bility with the Ethiopian Trade Laws.
Once the accuracy of the documents submitted are ascertained by the legal department
of the agency, the documents will be sent to the agreement and information department
for ratification.
After the agreement has been ratified, it will be printed in a government newspaper hav-
ing national circulation to make the public aware of the agreement.
Once the agreement reached between the investor and the administration has appeared
in a newspaper, the investor concerned can approach the registration and license depart-
ment of the bureau, and collect his business registration certificate after paying the
amount charged for capital registration.
6.3.2. Procedures for the Issuance of Trade License

Long gone are the days when a prospective businessman that had submitted his application for a trade
license had to endure the hundred and one obstacles that he encountered all the way from the start to
the end before he managed to get his trade license. When an investor has submitted a completed appli-
cation form to get a trade license in Dire Dawa, the bureau will first of all try to verify whether the license
he has applied for concerns a prohibited trade sector or not, and if the applicant is a foreigner who wants
to be considered like an Ethiopian National, the bureau will try to verify whether he has an investment
permit, whether he has a residence permit and identity card, and whether he has been registered in the
main register or not. Once these verifications are made, the trade license will be given to the investor
without any difficulty as soon as he has paid the amount of payment indicated for the type of business
he has applied for.
In the event that the business finds the type of trade the investor has applied for is prohibited or is not
allowed, the bureau will be duty bound to provide him with sufficient explanations in writing within 5 days
as to why his application has been rejected.
Every businessman who is involved in a trade, and collage business and whose capital of which is
more than 5,000 Birr, will need to have a trade license, whereas those whose capital is less than 5000
Birr do not need to have a trade license.
6.3.3. Trade License Renewal

The right and safe time for the renewal of a trade license without the need to pay any penalty is during

Agency, March 2005
the first 6 months of the new Ethiopian Fiscal Year, which starts as of the month of July; that is, from
July to December. License renewal requests made in the three months that follow December will entail
a payment of 20% penalty for each of these three months.
6.3.4. Payment Charged for Registration, the Issuance, and Renewal of Trade Licenses
7. LAND LEASE PRICES

Agency, March 2005
8. ADDRESS OF IMPORTANT GOVERNMENT AND NON- GOVERNMENTAL
INSTITUTIONS AND ORGANIZATIONS

Agency, March 2005
GOVERNMENT / PUBLIC ENTERPRISE FOUND IN DIRE DAWA
MEDIA INSTITUTIONS FOUND IN DIRE DAWA
INSTITUTIONS FOUND IN DIRE DAWA AND DIRECTLY ACCOUNTABLE TO VARIOUS

MINISTRIES, COMMISSIONS, AND AUTHORITIES OF THE FEDERAL GOVERNAMENT,
PRINCIPAL NON-GOVERNEMENTAL ORGANIZATIONS ACTIVE IN THE REGION

Agency, March 2005
C O N T E N T S
C O N T E N T
NO. TITLE PAGE
1. INTRODUCTION 1
2. GENERAL FEATURE OF 2
2.1. GEOGRAPHY 2
2.2. CLIMATE 2
2.3. POPULATION 2
2.4. LANGUAGE AND RELIGION 2
3. FAVOURABLE INVESTMENT CIMATE 3
3.1. LAWS, RULES, AND GUIDELINES 3
3.1.1. ORGANIZATION AND OBJECTIVES OF THE ADMINISTRATION 3
3.1.2. LAND DELIVERY PROCEDURE 5
3.1.3. INDUSTRIAL VILLAGE 7
3.1.4. SERVICE DELIVERY 8
3.2. INVESTMENT INCENTIVES 9
3.2.1. LAND INCENTIVE 9
3.2.2. EXEMPTION FROM INCOME TAXES 13
3.2.3. EXEMPTION FROM PAYMENT OF CUSTOMS DUTY 14
3.3. INFRASTRUCTURE SITUATION 15
3.3.1. TELECOMMUNICATION SERVICES 15
3.3.2. ROAD 15
3.3.3. AIR TRANSPORT 16
3.3.4. RAILWAY TRANSPORT 16
3.3.5. WATER SUPPLY 16
3.3.6. ELECTRIC POWER SUPPLY 16
3.4. PROVISION OF SOCIAL SERVICES. 17
3.4.1. EDUCATION 17
3.4.2. HEALTH 18
3.5. FINANCIAL INSTITUTIONS 20
3.6. INSTITUTIONS PROVIDING FINANCIAL SUPPORT 20
3.6.1. FOREIGN TRADE 20
3.6.2. QUARANTINE SERVICES FOR PLANTS AND ANIMAL 21
3.6.3. MARITIME TRANSIT AND CUSTOMS SERVICES 21
3.6.4. PORT SERVICE 21
3.7. AVAILABILITY OF MANPOWER 21
3.8. MARKET 22
4. RESOURCE BASE AND INVESTMENT OPPORTUNITIES 22
4.1. RESOURCE BASES 22
4.2. INVESTMENT OPPORTUNITIES 25
5. TOURISM 27
5.1. TOURISM ATTRACTION CENTERS 27
5.2. TOURISM OPPORTUNITIES 29
6. SERVICE DELIVERY SYSTEM 29
6.1. PROVISION OF INVESTMENT LICENSE 29
6.2. CONSTRUCTION LICENSE 30
6.3. REGISTRATION AND ISSUANCE OF TRADE LICENSES 30
7. LAND LEASE PRICES 32
8. ADDRESS OF IMPORTANT GOS AND NGOS 33

Agency, March 2005
Agency, March 2005

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I N T R O D U C T I O N

This proclamation makes it imperative that the entire well-being of the

The proclamation of the Charter marks a turning point in the history of

This booklet, prepared by the Dire Dawa provisional administration

Prepared by the Dire Dawa Provisional Administration Investment 1

2.4. LANGUAGES AND RELIGIONS

A number of Ethiopian Languages including Oromiffa, Amharic, Somali, Guragigna, Tigrigna,

2 Prepared by the Dire Dawa Provisional Administration Investment

3. FAVOURABLE INVESTMENT CLIMATE

3.1.1. ORGANIZATION AND OBJECTIVES OF THE ADMINISTRATION

The City Administration shall have the following objectives: -

Prepared by the Dire Dawa Provisional Administration Investment 3

3.1.1.1 POWERS AND FUNCTIONS OF THE ADMINISTRATION

3.1.1.2 STRUCTURE AND ORGANS OF POWER OF THE CITY ADMINISTRATION

4 Prepared by the Dire Dawa Provisional Administration Investment

3.1.2.1. AUCTION PROCEDURE

3.1.2.2. NEGOTIATION PROCEDURE

3.1.2.3. PROCEDURES FOR RESIDENTIAL HOUSES CONSTRUCTION

3.1.2.4. LEASE PERIOD

6 Prepared by the Dire Dawa Provisional Administration Investment

The industrial village thus estab-

1. LOCATION, AREA AND SIZE OF INDUSTRIAL VILLAGE

Prepared by the Dire Dawa Provisional Administration Investment 7

3. TYPES OF INDUSTRIES TO BE ESTABILISHED

The industries to be established at the village have to be among the following:-

3.1.4. SERVICE DELIVERY

The list of executive, and govern-

8 Prepared by the Dire Dawa Provisional Administration Investment

3.2.1 LAND INCENTIVES

3.2.1.1 INVESTMENT SECTORS THAT RECEIVE LAND AS AN INCENTIVE

Prepared by the Dire Dawa Provisional Administration Investment 9

2. RESIDENTIAL HOUSES AND REAL STATE DEVELOPMENT

10 Prepared by the Dire Dawa Provisional Administration Investment

1. The requests for more land

Higher Clinic 1100 5 95

Prepared by the Dire Dawa Provisional Administration Investment 11

THREE STAR > 200 UP TO G + 3 AND ABOVE 30 5 5 40 70

Amount of lease payment 100%

12 Prepared by the Dire Dawa Provisional Administration Investment

7. GENERAL GUIDELINES FOR THE PROVISION OF INCENTIVES

3.2.2. EXEMPTION FROM INCOME TAXES

1. INVESTMENT ACTIVITIES ELIGIBLE FOR INCOME TAX EXEMPTION

Prepared by the Dire Dawa Provisional Administration Investment 13

2. INCOME TAX EXEMPTION FOR EXPANSION OR UPGRADING

3. COMMENCEMENT OF PERIOD OF EXEMPTION FROM INCOME TAX.

4. CARRY FORWARD OF LOSSES

3.2.3. EXEMPTION FROM PAYMENT OF CUSTOMS DUTY

14 Prepared by the Dire Dawa Provisional Administration Investment

Dire Dawa has a modern digital

Prepared by the Dire Dawa Provisional Administration Investment 15

3.1.3. AIR TRANSPORT

3.3.4 RAILWAY TRANS-

The Ethio-Djibouti Railway Line passes through Dire

the country. It is an aspect that will play crucial roles

3.3.5. WATER SUPPLY

Dire Dawa is endowed with a great deal of

3.3.6. ELECTRIC POWER SUPPLY

16 Prepared by the Dire Dawa Provisional Administration Investment

3.4. PROVISION OF SOCIAL SERVICES.

There are 52 educational institu-