The development of Industrial Parks is one of the activities that have been given attention to realize Ethiopia’s structural economic transformation. The industrial parks also have the main fundamental missions of attracting foreign direct investment, expanding job creation and realizing technology transfer. The parks will make a great contribution to the national economic development by creating jobs for the community living in the areas they will be built and creating a suitable working environment.
Among the things that make industrial parks preferable are the fact that they provide many services in one place, build appropriate infrastructure and connect with other manufacturers. In this regard, efforts have been made to encourage large international companies to open their factories in Ethiopia by establishing many industrial parks across the country and providing relatively low-cost electricity service, tax-free importation of machinery, loan provision, one-center service and infrastructure construction.
In fact, the industrial parks are expected to play pivotal role in facilitating the efforts to make Ethiopia the manufacturing hub of Africa and to alleviate the unemployment problem. Currently, there are 13 industrial parks across the country, and they are making a significant contribution to the growth of the national economy through job creation, foreign direct investment attraction and technology transfer.
In particular, Integrated Agro-Industry Parks, which are believed to have the ability to increase the value of agricultural products and make them competitive in quantity and quality, are among the sectors that are said to achieve structural economic transformation by modernizing the agricultural sector.
These agro-industrial parks will make the marketing chain easier for the farmers and create market linkages that benefit the farmers. By enabling investors to receive agricultural inputs from farmers, they contribute positively to the farmers benefiting from their efforts. Data from the Ministry of Industry shows that the government has spent more than 30 billion Birr to build agro-industrial parks and this expenditure is to create favorable conditions for investors to enter the parks and engage in production activities.
The “Bulbula Integrated Agro Industrial Park” located in Adami Tulu Jido Kombolcha District, Oromia Region, East Shewa Zone, 16 kilometers from Batu City, is one of the integrated agricultural products processing industrial parks built in the country. The park was inaugurated in April 2021 by FDRE Prime Minister Abiy Ahmed (PhD), and it is an industrial park where producers who process fruits and vegetables, milk, honey, meat, and eggs are engaged.
The first round construction of the park is on 271 hectares of land, and the feasibility study shows that the next round of construction can be carried out to cover up to one thousand hectares of land. In the first phase, the construction can accommodate 148 investors; it is expected to create job opportunities for 70,000 to 100,000 citizens when it is fully operational. It is recalled that a program to promote the features and capabilities of the park to investors was held in August 2014 in Addis Ababa and at that time more than 40 investors promised to work in the park.
According to Getahun Adugna, a public relations expert at the Oromia Region Industrial Parks Development Corporation, preparatory work is underway to welcome and host investors of 29 companies that received permits to enter Bulbula Integrated Agro-Industrial Park and engage in the processing of agricultural products. The agro-processing sectors in which the investors are engaged are the production and processing of honey and wax, edible oil, vegetables and fruits (tomatoes, potatoes, juice…), coffee, avocado oil, meat, milk, animal feed, pasta and macaroni, and baby food.
According to Getahun, in the first quarter of the fiscal year, it is planned to introduce four investors to the park and it has been possible to give licenses to seven investors. The investors are engaged in edible oil production as well as meat and fruit and vegetable processing sectors. Among the licensed companies, a company called “TK Group” has built a shed and is carrying out machine installation work. The company is engaged in the production and processing of edible oil and animal fodder, and has acquired 2.8 hectares of land for its work. Production is expected to begin in a little more than two months.
The other organizations have acquired land and are moving to get bank loans. Some have been approved for bank loans and have started installing machines. For example, two of the manufacturers who have entered the six sheds that the government has built as samples have completed the credit approval process and are installing machines. Getahun said that most of the investors who have taken permission to enter the park and start work are local investors.
Regarding the provision of infrastructure, he said, “The Park has complete infrastructure services. It has road, electricity, telecom, and one center services. It is the federal government that builds the electricity substations for all the parks. Since we have delayed the construction of the substation, we have drawn more than 35 megawatts of power from the area and allowed the investors who have taken permission to continue their preparations.
As for water supply, the local water is brackish. It costs a lot of money to filter the water. Therefore, it is planned to dig five water wells in Tio District (Arsi), traveling more than 50 kilometers from the park, and three of them have been dug. Line laying work had also started. It is planned to bring water from Batu city to the park for some time so that the work will not be interrupted due to some problems,” he said.
According to Getahun, there are six rural transition centers that are connected to the park and whose construction has been completed; the main task of the centers is to collect the farmers’ produce in quality and quantity and supply to the park. The local community, including the farmers, will benefit from the ties that the investors create with the centers. Among the centers located in Shashemene, Meki, Dodola, Bale Robe, Iteya and Wolenchiti, the infrastructure constructions of Shashemene and Meki centers have been completed. The four centers have completed their building construction and the infrastructure (water, electricity, road…) is being completed. By the end of the second quarter of the fiscal year, it is planned to complete the construction and infrastructure provision of all the centers.
Getahun mentioned that the construction of the park required a lot of manpower and resources. Many local communities benefited during the construction of the park and local farmers will benefit by providing agricultural inputs to the park when the producers start working.
“When the park is built based on research, the main benefit that is expected to be achieved is to increase the quality and quantity of the farmers’ production and benefit them by creating market opportunities,” Getahun said. He mentioned that the “TK Group” which is expected to be put into operation soon produces oil from soybeans, and that it is gathering the necessary input (soybeans) for the product and thus the farmers who produce soybeans are being benefited.
In addition, “Bulbula Integrated Agro Industry Park was built with the aim of augment the agriculture sector via using local agricultural inputs from the surrounding community.” By modernizing agriculture and increasing its productivity, the farmers are working to produce surplus produce for industrial input in addition to the produce used for food and market.
Farmers will benefit even more when producers working in honey, meat, chicken, milk, pulses, oil and other sectors start operation. In addition, the park benefits the local community by substituting imported products and providing in local market,” he said.
There are many good opportunities that will help to shift the country’s economic structure from agricultural led to industrial. However, taking advantage of these good opportunities, the activities carried out to achieve the structural transformation of the economy are not commensurate with the country’s capacity and needs. In order to achieve the structural economic transformation that Ethiopia is making towards an industrial economy by using its potential in industry and increasing the income from this sector, it is necessary to increase and improve the manufacturing sector many times over the current performance.
Growth of the manufacturing sector can be improved along with the expansion of investment. Industrial parks create favorable conditions for the expansion of investment by implementing the services of a single center. Therefore, to achieve the structural economic transformation, the performance of industrial parks should be improved. It should be noted that this includes the provision of infrastructure resources, skilled manpower and financing to enable investors to enter the parks and produce.
BY BACHA ZEWDIE
The Ethiopian Herald November 19/2023
