Industrial Parks Catalyzing Ethiopia’s Industrialization

Ethiopia, which had once been depicted as a place of permanent famine and food shortage due to the drought induced food insecurity during the 1970 and early 80s, has vigorously strived to reverse the unfortunate image of the country with drastic measures taken with bold political commitment and homegrown developmental policies and strategies.

With the vision to become a middle-income country by 2025 where democracy, good governance and social justice are maintained through people’s participation, Ethiopia introduced the Growth and Transformation Plan (GTP) in 2010, which many believe is a bit ambitious. However, the government has began implementing the plan through mobilizing the public, stimulating common development spirit and sense of ownership on key national development issues.

Making Ethiopia the leading manufacturing hub in Africa through rapid development was quickly buttressed with the development of necessary infrastructure, revising investment policies in favor of investors, creating reliable and sustainable market at the international arena were few of the swift measures taken by the government. Further strategies were implemented to lure foreign investors and boost Foreign Direct Investment (FDI) to achieve fast, stable and broad based economic growth.

Since industrialization and structural transformation, and the country’s journey towards the middle income economy cannot be feasible only with few economic measures, the government embarked on the development of industrial parks across the country. This in turn, paved the way for kick starting the country’s manufacturing industry and building industrial capability, and availing broad based job opportunity as for citizens.

After developing the Hawassa Industrial Park with a total of 57 sheds and various other auxiliary and service buildings under phase I, Africa’s 1st park with zero liquid discharge facility was launched. Up on going to be fully operational, the park will create jobs for 60,000 individuals. Ethiopia was able to grab the attention of many trans-national companies and rapidly boost its FDI inflow.

This has helped to stimulate the economy. This will help to boost the creation of abundant job opportunity and export increase both in volume and diversity of products. The government heavily engaged in expanding the development of more new industrial parks across the country.

Bole Lemi, Kombolcha, Mekelle, Adama, Dire Dawa, Kilinto Industrial parks have already been   developed while Debre Birhan with specialty of agro-processing, Jimma leather and leather products , and both Bole Lemi II and Adama II industrial parks of textile and apparel are under development.

Besides, the government recently showed its commitment in laying cornerstone of 4 of the 17 integrated agro-industrial parks to be constructed in Hummera, Bure, Bulbula and Yirgalem in Tigray, Amhara, Oromia and Southern Nations, Nationalities and Peoples regions respectively. Investors are up in the development of industrial parks to mention the Eastern Industrial Park in Dukem operating with over 70 investors in various manufacturing sectors, George Industrial Park in Mojo, CCCC Industrial Park in Arerti, Huajian Industrial Park in Lebu, and CCECC Industrial Park in Dire Dawa.

International brands like Levi’s, Gap outfit, TESCO, PVH, Tal apparel have already set foot in the developed industrial parks and exporting their products to the global market. Consequently, Ethiopia is now able to earn 1 million USD monthly from product export of the Hawassa Industrial Park only.

Data from United Nations Conference for Trade and Development (UNCTAD) and World Bank assessment of stellar FDI performance of 2017 puts Ethiopia as the second largest FDI recipient from Africa registering a total of 4,171 FDI inflow only in the year 2016/17. Following the complements and recognition of international organizations on Ethiopia’s rapid economic growth and sustainably attracting FDI, many African leaders are visiting and revisiting again and again to thoroughly study and benchmark its economic policies and strategies.

Abundant and trainable labor, cheapest power supply, wide air connectivity through the Ethiopian Airlines with the largest cargo terminal in Africa and flying to over 200 international destination, Addis Ababa-Djibouti electric-powered railway, and market access for over 100 million population are some of the comparative advantages in compelling foreign investors to come and do business in Ethiopia.

But that is not all. The Ethiopian Investment Commission (EIC) envisioned of realizing the structural economic transformation of industrialization and the country’s journey towards the middle income economy, has revised its policies four times in favor of investors over the last few years.

Moreover, Executive Committee of the ruling Ethiopian People’s Revolutionary Democratic Front (EPRDF), with the objectives to stimulate the economy and to enhance foreign private involvement, have recently passed major economic decision to partially or fully sell some of the public enterprises including Ethiopian Airlines, Ethio-telecom, logistics, electric power generation, and sugar factories.

The hallmarked announcement of opening the key economic sectors in telecoms, energy, aviation and logistics for private foreign participation will signal a new phase in Ethiopia’s economic transformation.

To sum it up, the firm determination and commitment of the political leadership leaves no stone unturned to realize rapid, stable, sustainable and broad based economic growth through industrialization and sooner than later Ethiopia and its people will rejoice its renaissance.