Ethiopia: Keeping Pace With Industrial Parks Expansion

Setting and implementing multi-sectorial goals, the government of Ethiopia has currently made efforts to enable the nation reach middle income country by 2025. To make this happen, the government has given prime attention to the development of industrial parks that could assist to expand manufacturing sectors, and develop the capacity of local and foreign investors.

Recently, The Ethiopian Herald has approached Industrial Parks Development Corporation (IPDC) Deputy General Manager Shiferawu Solomon to discuss on various issues concerning the industrial parks the country is currently pursuing. He discusses the challenges and prospects of industrial parks’ development as follows.

Industrial parks development

In the first GTP, the government planned to construct four industrial parks. Of these, Dukem Eastern Industrial Zone and Bole Lemi I Industrial Park were the only two industrial parks finalized in their schedule. To re-strengthen the efforts, and boost the achievement made so far, the government established an Industrial Park Development Corporation formulating legal framework in 2015/17.

In the first year of GTP-II, the government operated Hawassa Industrial Park, and Bole Lemi I Industrial Park production stage. Hence, Bole Lemi I Industrial Park has created over 11,000 job opportunities, and has exported products that have a value over 20 million USD. The other, Hawassa Industrial Park, also created jobs for over 60,000 citizens. It is expected to export products that have a value of one billion USD per year.

In this fiscal year, the construction of three additional industrial parks in Mekele, Combolcha and Adama are expected to be finalized in this schedule. On the other hand, the construction of Bole Lemi II, Kilinto, and Jimma industrial parks would be started soon. And their constructions are expected to be finalized in the first half of the next fiscal year. Moreover, the construction of Arerti, DebreBirhan, Bahirdar Ayisha/ Dewale industrial parks would follow the track.

Model countries

The development of industrial parks in Ethiopia has been taken from Asian and Eastern Asian countries such as China, South Korea, Singapore, Malaysia, and Vietnam among others. It is a developmental pathway harmonized with the international standard and the nation’s growth demand.

Coordination

Currently, many government and other stakeholders are joining hands in glove to strengthen the development of industrial parks in Ethiopia. It would not be possible to develop industrial parks unless all stakeholders teamed up together. Curbing the problems identified so far, the coordination is expected to hasten and bring remarkable change towards the development of industrial parks. As the Corporation has a responsibility to administer industrial parks, conduct relevant studies, improve their construction quality based on international standard, it works in collaboration with various private and government institutions which are providing infrastructure inputs and services.

Technology transfer

Knowledge transfer would be undertaken between local and foreign companies engaged in industrial parks, particularly on management, market access, and production quality. Employees in such local and foreign companies can share knowledge on technology operation and management.

Significance of contract agreement

Of all contract agreement documents, shed rent, parks operation and management contract, Zero Liquid Discharge (ZLD) management, and sewerage service are included. Having these documents would assist to generate knowledge or technology transfer skills, deliver fast and reliable service, create job opportunity, increase export volume, and raise companies’ income among others.

Selected towns

Manufacturing sectors such as textile, leather, construction machineries, and pharmaceutical are the major which hold government attention in the GTP-II. The selection of industrial zones would be based on the availability of raw materials needed for the type of industrial park. In addition, the selection of industrial zones mainly focused on areas which could enclose infrastructures such as railway projects, road, electricity, and water.

Apart from selecting conducive environments, these criteria can have various significance such as to create job opportunities, increase towns’ economic growth, maintain towns’ sanitation, increase tourist flow, raise residents’ income.

Linkages between industrial zones and green development

Most industries are often located fragmentarily around residential and biodiversity areas. In this case, as many countries faced, it is so difficult to manage sewerage and tackle the negative impacts that it would affect the lives of residents and bio-diversities.

In this regard, the industrial zones have importance in assembling many split factories in to one space that could assist to treat and avoid sewerage properly. Industrial parks have contributions in protecting the environment from pollution and building climate resilient green economy.

Though 10 per cent of the area covered by any industrial park is prepared for green development, ZLD technology that helps to pour out sewerage and recycle purpose has also been planted in Hawassa Industrial Park. Thus, this park could fulfill the echo-industrial park standard. Certified by concerned government institutions, the ZLD technology has also been built in Bole Lemi Industrial Park, and started operation.

Economic significance

Industrial parks have great importance to create job opportunities and increase export productions. Currently, IPDC has been undertaking efforts to achieve goals set for manufacturing sector. Besides, the expansion of industrial zones would benefit towns to strengthen their economic development, increase citizens’ income, raise tourists’ flow, and build the surrounding and nation’s image.

Creating jobs for the youth is the one that has been given prime attention in GTP-II. Nowadays, industrial parks have vastly created job opportunities to citizens. Among the total job opportunities created in the parks, 85 per cent of the jobs are covered by women and youth. Disabled citizens would also have the possibility to get jobs in light manufacturing sectors.

Distribution

The expansion of industrial parks across the country relied on the level of nation’s inclusive growth. It is not focused to reach all urban areas; rather there are standards to look for such as population size, access to raw materials, geographical location, infrastructures. Adjacent to the expansion of industrial parks, the level of urbanization would grow and expand. Industrial park can be considered as a single city though it encompasses factories, residential areas, and trade and investment institutions.

In sum, industrial parks can strengthen the foundation of industrialization, generate foreign currency, raise local agricultural products, create job opportunities, and speed up the nation’s renaissance journey.

Source: All Africa

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