BY TEWODROS KASSA
Ethiopia has been demonstrating significant commitment in expanding industrial parks that would facilitate proper environment for Foreign Direct Investment. The industrial parks are playing a significant role on the national economy in various ways.These parks are key elements of the infrastructure supporting the growth the country has been pursuing. The construction of the parks is the continuation of nation’s commitment to alleviate poverty and ensure sustainable economic growth over a couple of decades. Although the country mainly concentrated on developing the agricultural sector in those years, it has been exerting efforts to develop the industrial sectors side by side.
Through providing a fertile ground in which government, private sector and universities cooperate, these parks create environments that foster collaboration and innovation. They also enhance the development, transfer and commercialization of technology and global knowledge.
Currently, the Industrial Parks (IPs) that commenced operation have so far created more than 83 thousand job opportunities to youths. Despite this encouraging deed, more than two million young Ethiopians enter the labour market every year that makes job creation an urgent issue. Recognizing that there is a need to create long-lasting and decent employment opportunities in urban areas the government of Ethiopia is exerting its maximum effort to create jobs focusing on economic priority sectors that add value and are export-oriented, generate high employment, have potential competitive and comparative advantages, and have multiplier effects on other sector-related industries.
Generating tangible hard currency; creating huge job opportunities to the youth; enhancing technology exchange, among others; are the major priorities of the government while expanding industrial parks throughout the country. If the industrial parks that commence operation in recent time created this much job opportunities, it would be possible to predict huge amount of open employment opportunities when all the industrial parks become operational in full swing.
Despite its impressive economic growth over the last 15 years, Ethiopia remains at a very early stage in its economic structural transformation. To expand its industrial sector, the Government of Ethiopia has set development plan tracing on the national industrial policy with a focus on the creation of industrial and agro-industrial parks.
In addition, the country is targeting USD 1 billion of annual investment in industrial parks over the next decade to boost exports and make it Africa’s best manufacturer being the hub of industrial parks. The government has planned to invest half of the USD 10 billion needed for industrial zones across the country that will house textile, leather, agro-processing and other labour intensive factories in the parks.
Having in mind the major benefits and incentives linked to this sector, the Ethiopian Government highly encourages and welcomes the Ethiopian diaspora and foreign investors to invest and develop industrial parks in Ethiopia, either independently or through public-private partnerships.
Ethiopia has so far invested around 1.3 billion USD in the construction of around a dozen industrial parks which have attracted anchor companies from the United States, China, India, Sri Lanka, Taiwan Province of China and South Korea. In regards to investors participation in the industrial parks, expatriate investors exceed in number than local investors. Having international investors experience can be beneficiary to local investors as it could serve as a motivation to them, after seeing and understanding the potential positive profit in the area. Rendering effective industrial park services, fulfilling infrastructural requirements, promoting competitive human power, facilitating shade distribution and access, among others, are the major assignments of the industrial parks.
The abundant resources that can be utilized for industrial inputs are vital elements to the industrialization aspirations that could lead Ethiopia to middle income economy. The country’s favorable climatic condition makes the country to be in a unique position to grow diversified agricultural products, which, in turn, could serve as an input and impetus to the industrial parks.
Industrial Parks Development Corporation (IPDC) Chief of Staff and Transformation Office Head Addisu Mamo said that the corporation has earned 247.9 million USD from its products exported to abroad and domestic market in the past Ethiopian budget year.
According to Addisu, Compared to the same period of 2019/20 budget year, the income has increased by 82, 394, 851 USD. Of the revenue earned, 181, 692, 971 USD were earned from foreign trade while the 66,228,379 USD has generated from textiles and personal hygiene products produced by companies in the industrial parks.
It was planned to earn 400 million USD from the export and domestically consumed production in the past Ethiopian budget year and the IPs have generated the mentioned earning though there were challenges encountered due to the COVID-19 pandemic and the Mekelle Park has stopped operation amid the terrorist TPLF attack against the Ethiopian government.
Currently, 13 industrial parks have been developed and commenced operation in the last six years. Three additional IPs have been put into operation during the past Ethiopian budget year. The IPDC has planned to create job opportunities for 45 thousand citizens in the past Ethiopian budget year and has created more than 56,236 job opportunities to the youths. In general, 83,738 job opportunities have been created in all industrial parks.
Experts recommended that apart from accomplishing such mega industrial parks constructions, it requires the country to promote agricultural commercialization. The vast arable land and competent human power have assisted the government’s feasible policies and strategies that aim smooth and successful journey towards industrialization. And it is extremely important to combine these resources to expedite the country’s all-round development.
The manufacturing industries that have given due priorities by the government are agro- processing industries, textile and clothing, food and beverage industries, tannery and leather goods, pharmaceutical industries, chemicals and chemical products industries, paper and paper products, plastic industries, building materials, glass and glass products, metal and metal engineering, among others, it was learned.
The Ethiopian Herald August 29/2021
