Ethiopia has set goals to transform the agriculture-led economy into industry-led one. To this end, it has been constructing various industrial parks.
The very purpose of constructing industrial parks at every corner of the country is, to create more job, generate foreign currency, transform agricultural led economy to industrialization and transfer of technology. The target is to increase the number of industrial parks to 30 to become Africa’s manufacturing hub and lower-middle-income economy by 2025.
Indeed, Industrial parks can play an important role on the national economy in various ways especially in strengthening the country’s endeavors of generating more foreign exchange earnings. They can solve foreign exchange earning shortage generating more hard currency when they start to operate and produce in their full capacity.
The recent report from Ethiopian Investment Commission indicated that the country has secured more than 103 million USD export earnings from active industrial parks which produced manufactured goods made from textile, shoe and other leather products over the past nine months. The products are mainly exported to America, Europe and Asia.
Textile, shoes and other leather products were among the manufactured items that generated hard currency. Accordingly, the foreign currency reserve of the country steadily grows. If we take the recent performance, it has increased by 40 percent compared to last year same period. All in all, the country has hit 70 percent of its export earnings target within the reported period, the report stated.
For the growth registered over the past ten months, Kombolcha Industrial Park has played important role. In the reported period, the park alone has generated more than 4.1 million USD export earnings from manufactured goods, according to Mekonon Hailu, Commission Public Relations and Communication Director. Besides, the park has created over 1,700 permanent and temporary jobs.
According to him, four foreign companies have started exporting manufactured goods from the park. More recently, Trivas an American company has started exporting suit to American market.
Including Kombolcha industrial park, more than ten parks are operating throughout the country. Many giant firms are preferred to invest in Ethiopia. The implementation of One-stop shop service at every park has enabled to facilitate the provision of multiple government services to investors to be efficient and effective. Substantially, the industrial parks have a significant role in facilitating the transformation of the agricultural-led economy into an industrialization, Mekonnen pointed out.
Apart from generating foreign currency, the government is constructing additional industrial parks across the country to create more jobs, transfer knowledge & expertise. So far, these parks have created more than 70,000 jobs nationwide.
Achieving vision 2025, a plan to make Ethiopia the leading manufacturing hub in Africa requires an annual manufacturing growth rate of 25 percent and an increase in manufacturing’s share of GDP to 20 percent by end of 2025. By then, when the existing parks and other additional under construction industrial parks operate in their full swing, hundreds of thousands of people will get jobs.
Regarding the participation of investors in the industrial parks, foreign investors far 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. The corporation prioritizes to promote local investors to join the industrial parks. And it has applying various incentives to strengthen local investors’ participation.
To make them efficient and effective, delivering cost effective park services, finalizing infrastructural works, promoting competitive human power, facilitating shade distribution & access among-others are important for further development of parks, he added.
On the other hand, in order to hit the aforesaid target, expecting more from industrial parks alone to play constructive role is not advisable. Investors should also contribute their part by ensuring rapid technology and knowledge transfer, broaden linkages with the rest of the sub-economy, and utilize agricultural products as raw material.
The Ethiopian Herald June 6, 2019
BY TSEGAYE TILAHUN
