In its cusp of history, Ethiopia has gone through a number of changes. These changes have brought their positive and negative fruits on the lives of Ethiopians. With all the odds, every government has been trying to transform the country to a better world though most of them couldn’t achieve the sole objective of lifting the country from where it was.
The government of Ethiopia has tried to modernize the economic sector by introducing different mechanisms that can change the whole system. Multiple opportunities have been created for people who want to work in the country. Besides, the government has offered many incentives for those who wish to invest in the country.
As the country has planned to transform its economy from agriculture led to industry, in such process, numerous plans and strategies have been implemented. The current occupant has been promoting and introducing the potential resources of the country to invite both local and foreign investors to the country.
Various government stakeholders have played their role on the transformation. Specific institutions have organized to address specific objectives. Industry Parks Development Corporation and Ethiopian Investment Commission are examples of governmental organized institutions.
In order to substitute country’s import, the government has tried to promote local products to answer the people’s demand. At the same time, exporting products will be the other objective.
Regarding Promoting industrial parks and investment, the country has gone far. Having stayed with Ethiopian Press Agency, Ethiopian Investment Commission Deputy Commissioner Daniel Teressaa mentioned prospects of industrial parks and investment through them. The deputy commissioner said that investors from local and abroad have the will to invest in the country. Many of the investors started manufacturing and export their products to the global markets. Daniel also added that the country has both private and government owned industrial parks. These industrial parks have been profitable in attracting foreign direct investments and local investors. In exception, Bole Lemi, Hawassa and Adama industrial Parks are the ones with better investment achievements though some industrial parks have stopped production like Mekele Industrial Park.
Despite the fact that much of these industrial parks are occupied by foreign investors, Daniel remarked that these investors have recorded better in building their capacity and scaling up their productivity.
Living up one of the objectives they designed for, Industrial Parks have also become the hub of job opportunities. The deputy commissioner underlined that around 87 thousand of workers are employed on core staff position, and 170- 200 thousand workers are employed under supportive staff such as janitor and security guards.
As the major objective of these industrial parks is exporting, the country has earned higher income from the export. Job creation opportunity is also the other success from these parks, Daniel stressed.
According to Daniel, these industrial parks have agro- industrial, pharmaceutical, and other textile factories in different sites. Though these industrial parks have scored better figures in various levels, there are also major challenges they have faced. The existed security problems, COVID 19, and the expulsion of Ethiopia from AGOA are some of the major obstacles for the industrial parks. Lack of better infrastructures and raw materials also have their own adverse impact on the investment.
Ethiopia imports a number of items from different destinations. Fuel, medicines and medical equipment are the ones that the government gives priority for.
By the same token, Industrial Park Division Deputy Commissioner’s advisor, Mebratu Gebreyes on his part, stated that the pharmaceutical sector has registered some improvements. For the pharmaceutical demand, the government gives a special attention to substitute those imported medical products by local. That is why there is a national strategic document for the pharmaceutical sector. In other countries, there might be a strategy for a sector, but such a trend is not common in Ethiopia. There are general investment plans and strategies.
Mebratu further stated that the pharmaceutical sector is one of the sub- sectors in the manufacturing sector. The advisor disclosed that Ethiopia’s imports are much of drugs and medical equipment. 80 percent of the imports are pharmaceuticals. Ethiopia buys pharmaceutical products, and this procurement is done by Ethiopian Drug Supply Agency. To address the demand, apart from the 13 industrial parks owned by both private and government, there is a specific industrial park dedicated for pharmaceutical production. It is found in Kilinto Industry Park. The park resides in an area of 279 hectares and 160 of it will be for manufacturers.
In order to invite foreign investors, various incentives are provided from the government. In relation to the pharmaceutical sector, financial incentives are the main offer from the government. The incentive incorporates tax relief and duty- free imports of construction and other materials. There is a system that allows investors to import duty- free materials including accessories, spare parts, and vehicles, Mebratu mentioned.
Regarding the pharmaceutical sector, the local investors’ participation is at a better level. Many local investors are working at Kilinto Industrial Park. Out of the four investors who started operating in the park, two of them are locals. Further, among the 28 applicants in the sector, 14 of them are local investors, and four of them have applied to work together with foreign investors. The government gives special incentives for those local investors who invest in pharmaceutical, the advisor noted.
As the Industrial Park regulation describes, any local investor should reveal its potential. Therefore, as to Mebratu, the investor presents the details of its project. Then, the project will be brushed up by the commission and assisted with the necessary information. Consultations will be done. In addition, actions related to loans and other supports will be assisted together by responsible stakeholders.
As to the advisor, since the pharmaceutical sector needs special attention and monitoring from responsible government stakeholders, investors are forced to sell their products only in local markets. The sell can be either in retail or wholesale. The investors are also free to use E- commerce. Unless the investors are obedient to this system, they will not get their license. Promoting local investors, when they want to invest in the pharmaceutical sector, the investors acquire their license from the responsible government institution. The Ethiopian Food and Drug Authority take the responsibility for monitoring imported items. Before importing, the investor who imports the stuff will announce from where and from whom the stuff comes. If the drugs and medical materials are good to be registered, then the license will be given.
A simple illustration for promoting investment in Ethiopia, Ethiopian Investment Commission presented investment opportunities in the country on a forum in Dubai recently. It is not far to remember that India’s Glocare Pharma recently inaugurated a pharmaceutical plant that worth USD 5M in Kilinto Industrial Park, one of the industrial parks tailored to investments in the health sector.
In a nutshell, the Ethiopian government has been promoting investment in every corner of the country. Though there are limited national resources, the government didn’t hesitate to provide better environment for those who want to invest. Various incentives are also provided to both local and foreign investors. Such act will change the economy of the country in a way that the people wish to have. Better plans and strategies will be expected from the government to achieve its objective of lifting the country from where it was before to the aspired level of development, it was learned.
BY DANIEL ALEMAYEHU
THE ETHIOPIAN HERALD FRIDAY 18 MARCH 2022
