With a view to accelerating the process of reforming the economy, Ethiopia has been focusing on utilization of technology so as to modernize the industry that would lead to the diversification of activities and the achievement of sustainable industrial development and economic advancement. The institutional system has to be well accessible to information, knowledge, new technology and proper financing in a bid to directly fuel progress towards achieving economic development thereby declaring sustainable economic progress.
Having this in mind, The Ethiopian Herald conducted interview with Samuel Utant an engineer graduated from Addis Ababa University in Industrial Engineering, to garner information about the principal role of industrial parks in fostering economic development and helping the nation have real progress.
He said, “Industrial parks are normally established to act as catalysts for trade, investment as a wider economic progress. Most often, they aim to boost competitiveness to make the economic transformation of the country which they are found quicker or most effective than would be possible without them. Industrial parks can be regarded as a solution to overcome a range of pitfalls and inadequacy thereby accelerating the economic development by attracting innovative businesses that can generate jobs, higher incomes and therefore more resources to companies, investments and institutions and to themselves.”
According to Samuel, industrial parks can definitively exploit the local potential in supporting knowledge-based business development and outline an environment where they can interact with other supporting knowledge suppliers thus facilitating business and local development.
Yes, industrial parks in Ethiopia have, he said, shown progress and even companies are increasingly fond of engaging in the former. Of course, embarking on human capital combined with full-fledged investors, be they are local or foreign, has been enhanced the national economy and its technological capacity. Unequivocally, the progress gained in the development of technological capabilities will spill over to agriculture, manufacturing, mining, apparel, service and other related sectors thereby booming governance and institutional growth. Such a bold move will ultimately lead to economic development both in the sectors nationally and even regionally as efficiently as possible.
As to him, industrial parks development in Ethiopia has been booming and the majority of local companies have been running activities in various industrial parks. The number of companies and investors has revealed a significant increase in investment and production activities at Ethiopia’s industrial parks highlighting their crucial role in import substitution and export diversification.
It is also well recognized that Ethiopia set up many industrial parks specialized in various sectors. As these parks have been established with the vision to make the country a leading manufacturing hub, the government has attached due emphasis to industrial parks development and expansion. Yes, investments by both local and foreign investors have resulted in the occupation of most industrial park units. True, growing prominence is recorded in industrial parks in manufacturing, textile, agro-processing pharmaceuticals, and agricultural products. Industrial parks have contributed a lot to the effort for replacing imported goods and services so as to meet the demands for local production.
He said, “The country has been registering remarkable achievements via encouraging activities in improving import substitution and export expansion. The country has also recorded concrete achievements in agro-processing. In the textile and garment sector, products manufactured in industrial parks meet global quality standards and are exported to major world markets. Textile and garment manufacturers are also contributing to import substitution by producing uniforms for various organizations, reducing the need for foreign imports.”
He said industrial parks also foster mutually beneficial partnerships between industrial parks and surrounding communities. Principally, they are playing a pivotal role in Ethiopia’s economic development by substituting imports, diversifying exports, and creating employment opportunities.
As investment and production continue to grow, these parks are poised to further strengthen the country’s economic competitiveness by strengthening import substitution and export trade. Import substitution of textile and food items has already been bearing fruits. The country is also working to fully substitute imports of myriads of goods and services. Economic growth in Ethiopia is progressing at an impressive rate, where industrial parks have piqued the interest of international investors in the country’s economy.
Yes, industrial parks in Ethiopia have significantly contributed to the nation’s industrial development in terms of creating employment, increasing government revenue and export, diversifying the industrial products, attracting Foreign Director Investment, and attracting foreign exchange.
Industrial parks can maximize resource integration for limited production factors within a certain spatial scope by attracting labor and capital-intensive domestic and foreign investment in manufacturing and service industries, for instance. Here, not only do industrial parks increase job opportunities but they also foster the effort geared towards bolstering homegrown economy and import substation.
With regard to linkages with local economy and regional development, the various industrial parks can be a good indication. Industrialization conventionally includes manufacturing, mining, construction, and utilities such as water, electricity, and other related requirements.
Thus the country needs a development strategy that gives weight to the comprehensive development of industrial parks. The industrial parks development has now been blossoming to fuel economic development though a lot remains to be done to help all industrial parks go operational in full swing and enables the nation record notable progress.
He said, “By attracting labor and capital-intensive domestic and foreign investment in manufacturing and service industries, industrial parks are well expanding their engagement. Industrialization traditionally includes manufacturing, mining, construction, and utilities such as water, electricity, and gas but recently it have expanded to include the process of development that is balanced and sustainable as far as the sociopolitical and economic realms of a society are concerned.”
He further stated that industrial parks have great importance for the economic development – from local, national, regional, continental and even global level. They represent modern platforms that provide excellent conditions for investment and development, encourage industrial development, and bring large benefits to countries.
He said that the way in which industrial parks, for many year, have been shaping the development of production, trade, transport and the economy in general, can best be observed through successful trajectory.
As to Samuel, for developing countries like ours, industrial parks are the most efficient way of stimulating economic development, modernizing the industry, embracing innovation, and increasing the number of jobs available. The most important thing is that the development of industrial parks attracts local and foreign investments by which economic development can be secured.
According to Samuel, the most successful example of this is China, which has gone through incredible development over four decades. China has reached such a level of development today as it has been providing financial and technical support to industrial parks under the auspices of the United Nations Industrial Development Organization – UNIDO.
“Industrial parks easily respond to new market demands, they are advancing and becoming an integral part of industrial development and beyond. They are of paramount importance in fostering growth of small and middle-sized enterprises in Ethiopia though a lot remains to be done.”
As to him, industrial parks are really significantly useful in promoting entrepreneurship and socio-economic progress as they are ideal catalysts for industrialization and economic development and help put into place an infrastructure that fosters and attracts entrepreneurs of all scale and size. They have also promoted economic activity in various areas by providing citizens with better employment opportunities.
Fundamentally, he said, since the country has been facing problems following accelerated surge in population growth, Ethiopia has to work hard so as to transform the economy, reduce poverty, provide jobs, and achieve the ambitious aim of transitioning the economy to middle-income level.
Here, expanding and promoting industrial parks more is one part of the effort geared towards fostering economic development. Besides, the country has to expedite the new model to promote growth and create jobs thereby ensuring sustainable economic growth as expansion of industrial parks have been providing citizens with an opportunity to grow and further develop their business.
BY MENGESHA AMARE
THE ETHIOPIAN HERALD WEDNESDAY 13 MARCH 2024
