Ethiopia: Expanding Industrial Parks to Ensure Sustainable Growth


It is a sheer fact that Ethiopia has been offering golden opportunities to those who want to invest in manufacturing businesses like textiles and garments/apparel, leather and leather products, chemical products, pharmaceuticals, engineering and metal fabricated products, and agro-processing .

Mostly Ethiopia’s manufacturing sector’s competitive advantage is driven by the availability of abundant workforce, the country’s geographic location, the country’s preferential access to key global markets, and the government’s strong investment commitment and sense of direction, according to the Ethiopian Investment Commission (EIC).

According to Mekonnen Hailu, EIC, Public Relations Directorate Director, the future of the sector would furthermore augmented by the large-scale development of industrial parks in many parts of the country.

Moreover, the country has realized successful results in promoting its investment opportunities and attracting anchor investors , he said.

As to him, Ethiopia is on the move to expand the industrial parks to assure the sustainable development of the country.

For example, more recently Ethiopia inaugurated three Chinese-built industrial parks that would attract export-oriented foreign companies to the East African country’s textile, food processing and apparel production setting, he added.

Mekonnen noted that the three industrial parks, Hawassa, Mekelle and Kombolcha, were built as part of its efforts to become Africa’s manufacturing hub. Located in southern and northern part of Ethiopia, the commission has already begun promotion works on the parks aimed at attracting renowned export-oriented foreign companies to Africa’s nation.

The country has a plan to uplift its current 150 million USD revenue from exporting textile and apparel materials to more than one billion USD, according to the Director.

He further added that the Chinese-built Hawassa Park, some 275 km south of the capital Addis Ababa, which is considered as Ethiopia’s flagship industrial park, has already started bringing in hard currency.

Among the companies that have commissioned their production on its premises is the Hong Kong-based TAL Apparel, it was learnt.

Meanwhile, as to Ethiopian Textile Industry Development Institute recent report, close to 1.5 million dollars is being earned in a month from export of textile and garments products from the Hawassa industrial park.

Accordingly, the east African country expects to generate one fourth of the targeted over 400 million U.S. dollars foreign currency for the current fiscal year from the Hawassa industrial park alone.

According to the Institute, eight factories are presently exporting their products abroad, while 10 other companies had set their plan to begin export since the last September.

Another Chinese-built industrial park, the Mekelle Industrial Park some 783 km north of Ethiopia’s capital, is also attracting a bulk of international companies.

The park, which is currently recruiting companies to its compound, has recently revealed that seven foreign companies have already secured shades to commence assembling textile and apparel producing factories.

Among the seven foreign textile and apparel companies granted their space inside the Mekelle Industrial Park are high-profile export-oriented companies from Bangladesh.

Kombolcha Industrial Park, which is also built by China Civil Engineering Corporation (CCECC), is also in the full swing attracting various foreign companies at large.

Trybus group, a textile and apparel materials producing company based in the United States, is the latest firm that showed an interest to assemble its factories on the premises of the recently inaugurated Kombolcha Industrial Park, some 252 km north of the capital.

Signing an agreement with the Ethiopian Investment commission so far, the group has been granted 5,500 square meters of land to install its factory that is inside the Kombolcha industrial zone.

In connection with country’s ambition to attract world-class exporters, Prime Minister Hailemariam Dessalegn said that the country’s favorable business environment is bringing a growing number of foreign investors claiming that the country “has attracted huge Foreign Direct Investment (FDI), despite the global decline.”

As Ethiopia is on the move to become Africa’s manufacturing powerhouse and a leading textile and apparel exporter, the government expects the three industrial parks to lure a great number of competitive foreign companies to its settings.

These industrial parks production efficiency and local productivity indicates that they do have a pivotal role on the economic development as a tool.

The growth sustained by the technology used in these industrial parks open opportunities for creating new jobs, improving local productivity and maintaining a competitive environment throughout the country has been clearly observed.

In addition, producers operating in the industrial park have been getting greater benefits at lower costs with these industrial parks.

The chance to obtain additional benefits by supporting local development and the opportunity to create new jobs along with the income growth can positively influence the local economy, according to the institute.

These changes, together with the concentration of investment in research and development can modify the industrial structure of the local region and can contribute to upgrading the quality of life.

The factors affecting productivity were identified (industrial structure, capital savings, technology of adaptability, quality of the workforce) and analyzed by many experts concerned with the achievement of relevant studies which have verified the practical extent to which these factors are specific to the local environment.

The development of industrial parks is an important factor for any economy to actively participate in the global economic system. Industrial parks are based on knowledge and rely on the intensive use of technology.

They are and or can be the representative for the regional economic development and led to a decisive effect of stabilizing the economic reforms in economy.

In addition, when managed successfully, industrial parks can provide a favorable environment for the development of concentrated firms but also for the local development. When not properly managed, industrial parks will not be able to overcome some issues faced by concentrated companies and that might affect the local environment.

The framework conditions for industrial parks differ among countries and within countries due to the local governing competences, the social, economic, cultural and environmental aspects of each region and of the local community at large.

Categories: Africa, Apparel, Brands, Business, Ethiopia, Textile

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