Dire Dawa, the “Oasis”, one of the Ethiopian cities known for their industrial centers, the hospitality and wonderful community of its residents makes it convenient and ideal for investment work. Dire Dawa, which is known as the “Industrial Corridor”, was a city known for its commercial activities, but this business center has remained stagnant.
According to the data of the Trade, Industry and Investment Office of Dire Dawa, the city is making an effort to return to its former commercial status. One of the activities that show this effort is the activity it is doing in the investment sector and the effort is bearing fruit. The sector has been managed by a board. This is a step taken to ensure that all investment sector issues are considered by the board, and the problems of the sector as well as investors’ questions get a quick and organized response.
Abera Mengistu, the Head of the Investment Research and Promotion Team at the Department of Trade, Industry and Investment in Dire Dawa City Administration, explained that encouraging changes are being registered in the investment sector in the City. The city has performed well in the investment sector in the last fiscal year. One of the activities was to issue investment licenses for new investment projects.
Accordingly, in the 2022/23 fiscal year, it was planned to issue investment licenses for 450 investment projects, and 347 investors (206 in services, 104 in manufacturing, 22 in construction, and 15 in agriculture) received licenses. And, the projects have the potential to create job opportunities for more than 21 thousand citizens.
Among the investors who received investment license, eight factories and four projects in the hotel and tourism sector, which created job opportunities for 3, 952 citizens, have started work. The activities that made it possible have also been done.
One of the advantages of investment projects is that they directly or indirectly benefit the communities in the areas where the projects are carried out. When the city administration of Dire Dawa brings investors to the city, it is with the intention that the investors will benefit the local community in various ways. Abera explained that the investment projects carried out in the city have many benefits for the city and the surrounding society.
“In addition to creating job opportunities through their investment activities, investors in the city are fulfilling their social responsibilities by providing various types of support. The activities of supporting students with educational materials and helping the underprivileged are examples of this. As investors carry out infrastructure development activities in the areas where they do their investment activities, the local community will benefit from this activity. He said this benefit has made the community develop a positive attitude towards investment projects.
Although it is not deniable that Dire Dawa has recorded a good performance in terms of investment activities in the last fiscal year, Abera stated that there were challenges that hindered its performance. One of the problems is the implementation gaps in giving quick responses and taking measures to the questions of investors who could not carry out their work according to the contract they had taken for investment license and land.
Establishing Free Trade Zones is one of the practices that countries implement to facilitate their export and import trade and increase their foreign direct investment flow and to improve their overall economic growth. It is a place where value-added production, logistics, financial provision and similar activities and services are performed. In addition to producing products, importers and exporters bring goods into the country and store them in the region, process them and deliver them back to foreign markets. It also offers integrated financial and advisory services.
With this in mind, the Dire Dawa Free Trade Zone, which is expected to make a significant contribution to the national economic growth by streamlining Ethiopia’s export and import trade and increasing the investment flow, was announced on August 14, 2022 by the Prime Minister of Ethiopia, Abiy Ahmed (PhD). It is remembered that the Free Trade Zone started working being inaugurated by the Prime Minister on the same day.
According to Abera, one of the good opportunities and resources that enable Dire Dawa to achieve superior performance in trade and investment activities is the free trade zone of Dire Dawa. Currently, many investors are showing interest in operating in the free trade zone. There is a better flow of investors than before. The free trade zone is making a great contribution to increase the flow of investment.
“Foreign investors’ primary interest is to enter the free trade zone and engage in business. 27 foreign investors who participated in last year’s “Invest Ethiopia” investment forum visited the Dire Dawa free trade zone. The free trade zone will greatly help to increase investment flow,” he said. Adding he said that the region creates great potential for the Dire Dawa investment.
Abera further explained that Dire Dawa Investment, which showed a successful performance in the last fiscal year, has planned to achieve better success in the 2023/24 fiscal year as well. It is planned to give investment licenses to 500 investors in the fiscal year. The investors are expected to register a capital of more than 42 billion Birr.
According to the plan set, among these investors, 35 projects are in the pipeline to complete their construction and start production. . The city administration of Dire Dawa has the desire for many investors to engage in the manufacturing sector in terms of the city’s investment capacity and vision. However, the investors will be protected in their choice to work in the sectors that their knowledge level, financial capacity and work experience can make them successful. Members of the Diaspora community are showing great interest in engaging in the investment sectors of Dire Dawa.
In addition to job creation and local development, one of the reasons why investment is required is to increase technology transfer. In this regard, members of the Diaspora community those were born in Dire Dawa area have come to the city from different parts of the world to provide technology training. This activity will continue to be strengthened in the current fiscal year. Encouraging results are being recorded in making the work carried out by the experts brought by the investors from abroad so that the Ethiopians can replace the foreigners with short-term practical training and make the technological transition a reality. Many manufacturers are following this practice and carrying out their investment activities.
In an effort to improve the quality of service delivery, some investment sector services have been started to be provided online. According to Abera, the one-window service provided to investors allows investors to easily submit requests for their necessary resources for their projects and get quick responses.
In terms of infrastructure provision, Abera recalled that the city has tried to increase the flow of investors by realizing better infrastructure provision in the past. The 202 hectare Dire Dawa Industrial Village has its own power distribution station and is not connected to the city’s power supply, so there is no risk of power cuts. The construction of the power distribution station of the industrial village is a reliable solution to the problem of power supply, which was frequently interrupted and had a significant impact on the productivity of investment institutions. The investors have also given their testimony that they have a good view for the development and supply. It is planned to upgrade the road level inside the village.
It is known that the operating system implemented to encourage investors has a legal framework prepared at the national level. In this regard, the Dire Dawa City Administration implements procedures to encourage investors entering the city based on the legal framework. Activities are part of measures to encourage investors.
Abera expressed his concern that the lack of budget will have an impact on investment activities, especially land preparation. Another problem that has been identified in the investment sector in the fiscal year is the issue of the investment stakeholders’ ability to carry out activities that are essential to the success of investment with equal speed and efficiency. There are 12 institutions operating. The speed and efficiency of these institutions requires great attention.
BY BACHA ZEWDIE
The Ethiopian Herald October 12/2023
