Manufacturing industry is one of the sectors that have been working hard to bring about economic transformation in the country. Many activities have been carried out to shift the economy to manufacturing industry, which has been dependent on agriculture for centuries.
One of these activities is to solve the chronic problems that have been seen in the sector by building industrial parks and transferring them to investors. The country has done a lot to create a favorable investment environment for investors who want to engage in the industrial sector, especially foreign investors.
In particular, in the activities carried out to attract foreign direct investment, it is believed that industrial parks play a significant role in solving the problems of providing workplaces and infrastructure, and bureaucratic red tape that foreign investors face when coming to the country. As a result, 13 industrial parks have been built; thus, many changes have been brought about in the sector.
These industrial parks, built in Hawassa, Adama, Addis Ababa/Qilinto, Bole, Debre Birhan, Kombolcha, Dire Dawa, Bahir Dar, Mekele, Semera and Jimma, are contributing to the development of the sector by attracting investment that contributes significantly to foreign exchange earnings, job creation, knowledge and technology transfer.
The industrial parks are managed by the Industrial Parks Development Corporation, which was established by the government through a proclamation, and the corporation has made significant contributions to the country’s industrial development by developing and managing the parks over the past ten years since its establishment and operation.
Following the issuance of the Special Economic Zone Proclamation, the corporation has recently converted eleven of the industrial parks it manages into special economic zones, where extensive work can be carried out. The corporation is also responsible for developing and managing the special economic zones.
It is believed that these special economic zones will continue to play a significant role in the country’s industrial development. In addition to being centers of manufacturing industries, the special economic zones will serve as multi-sector trade and logistics centers.
Besides, the Special Economic Zones will enhance the country’s participation in the global value chain and enable it to participate effectively in regional trade, strengthen its ability to compete in terms of time and cost, and ensure the benefit of the people.
The Industrial Parks Development Corporation recently celebrated its 10th anniversary in developing and managing these former industrial parks, today’s special economic zones, at the Dire Dawa Special Economic Zone.
Responding to questions from journalists regarding the corporation’s 10-year journey and its future, the corporation’s CEO, Fisseha Yitagesu (PhD), stated that the corporation has been gaining experience in developing and managing parks over the past 10 years.
He also indicated that he expects more projects to come forward, and that new projects have also been launched as the 10th anniversary is being celebrated; one of these is the Dire Dawa Free Trade Zone.
As he explained, it has been a while since the Special Economic Zone proclamation was issued. Until recently, the parks were mainly focused on manufacturing, where products for export were produced.
The Dire Dawa Free Trade Zone will also be a multi-sectoral zone where manufacturing, trade and logistics activities will be carried out. He also explained that the free trade zone, especially its proximity to Djibouti, will facilitate the direct unloading of goods imported through Djibouti and their movement to the interior of the country.
He said that the corporation was established by law in late December 2014, and since then it has developed and managed 13 industrial parks in different parts of the country.
It has exported products worth nearly two billion Dollars to the foreign market so far, and has created job opportunities for more than 300,000 citizens. He described the corporation as having made a significant contribution to the expansion of manufacturing industry culture.
The corporation is still in its infancy; after this, many jobs are expected in logistics, trade and manufacturing. This work is not enough for over 120,000 people, and the special economic zones are being created in both the private and public sectors where job opportunities are created, trade is integrated, and production is carried out, he added.
The CEO mentioned that within ten years, the corporation will develop leading industrial parks in Africa, and pointed out that there are industrial parks or infrastructures where any developer can come and easily start working. This is not an easy development, and it is contributing to the industrialization of Ethiopia.
“To what extent have the parks achieved the objectives for which they were established? For example, when the Hawassa Industrial Park was fully operational, it was expected to generate one billion Dollars a year; this is not the case for Hawassa Park, but for all parks in general; how can it be said that the parks have been effective when their foreign exchange earning capacity is at this level?” the CEO said, “First of all, there are many parameters by which the parks are measured.”
He said that this year, macroeconomic reforms have been fully implemented and the overall government development policy is being changed, which will play a significant role in exports; he believes that it will also contribute to the import trade, which is facing significant difficulties. Exports have not progressed as expected, and that exports are expected to expand well from now on.
Regarding shifting of industrial parks to special economic zones, the CEO explained that industrial parks focus on traditional manufacturing; most of the country’s industrial parks are engaged in small-scale manufacturing such as textiles.
The shift to special economic zones can also be seen in the context of global economic activity; many countries are also shifting from traditional industrial parks to special economic zones. The government’s policy direction is to make them special zones that encourage more entrepreneurship, trade, and real estate, and that the global trend is the same.
Industrial Parks Corporation Investment; Promotion and Marketing Executive Director, Zemen Junedin Abubakar, for his part, said that the main focus of the special economic zones is to expand industrial culture and create employment opportunities, rather than foreign exchange, from the industrial parks of the past.
The Executive Director said; “The Special Economic Zones, especially in the agro-processing sector, have been made to focus on the benefits of the farmers and pastoralists around them; thus, it has been possible to create a sustainable market connection for more than 90 thousand farmers. This market connection created through the supply of beer barley that has been created in the Bole and Debre Birhan Special Economic Zones.”
In general, the Executive Director mentioned that a sustainable market connection of 350 million Dollars has been created through all this, and this has ensured the sustainable benefit of the farmers; they have eliminated the illegal middlemen who were making profits without adding any value, and have enabled producers and consumers to connect directly.
According to his explanation; another major achievement is the performance achieved in proxy production. One of the efforts made to maintain the balance of trade between exports and imports over the past 4 years is the process of producing imported products domestically and substituting imported ones.
In particular, the production of uniforms for the defense and security forces in the Hawassa Special Economic Zone and other economic centers focused on garments and textiles has saved more than 800 million USD in foreign exchange. This performance is not limited to clothing, but also in the pharmaceutical sector, as imported drugs being produced in the Kilinto Pharmaceutical Special Economic Zone.
He also announced that they are contributing significantly to environmental protection by planting an average of more than 600,000 indigenous seedlings every year. These special economic zones have been in operation for the most part in the last five years; “They have an irreplaceable role in the structural transformation we envision as a country; the development of industrial culture.”
According to the executive, the centers have no competitors in Africa; they are preferred and competitive in terms of energy supply and infrastructure at the international level. “Since their products are in demand in the world market (they are said to be ‘Made in Ethiopia’), they have a positive contribution to the construction of the country’s infrastructure and show our potential in the sector,” he said.
He also mentioned that out of the 177 manufacturing sheds in all special economic zones, more than 87% are now owned by foreign and domestic investors. The focus on garment/textiles has been shifted to other sectors, especially pharmaceuticals; agro-processing; technology; domestic car assembly and aircraft parts manufacturing; trade; logistics and ICT development sectors, and that results can be achieved in a short time.
BY BACHA ZEWDIE
THE ETHIOPIAN HERALD THURSDAY 13 FEBRUARY 2025
