Ethiopia’s industrial parks could boost employment and drive innovation

by Iweka Kingsley

According to Lelise Neme, CEO of Ethiopia Industrial Park Development Corporation (IPDC), Ethiopia has committed about $1.3 billion to construct about a dozen industrial parks in a bid to achieve Ethiopia’s industrial ambitions.

So far, Ethiopia has built and commissioned five industrial parks including Hawassa, Bole Lemi, and Eastern Zone, and hopes to open six more industrial parks this year including Mekelle, Kombolcha, Adama, Kilinto, Dire Dawa and Arerti. It is quite on track to do so as it is set to commission the Debre Berhan industrial park by the end of February.

The Debre Berhan industrial park, stretching over 75 hectares of land with eight industrial sheds, is expected to provide another 1,000 jobs once it becomes operational.

As of September 2017, the Ethiopian Investment Commission reported that three industrial parks (Hawassa, Bole Lemi, and Eastern Zone) in Ethiopia generated $248 million from export of various products.

Employment Boost

Beyond foreign exchange, the parks have also helped Ethiopia increase job opportunities. As at 2017, the parks had provided jobs for up to 31,000 people.

The World Bank provides data for unemployment rate in Ethiopia from 1991 to 2017. The average value for Ethiopia during that period was 5.45 percent with a minimum of 3.08 percent in 1991 and a maximum of 8.71 percent in 1999.

For 2018, the unemployment rate for Ethiopia sits at 5.31 percent, a figure expected to be significantly impacted by these industrial parks, as well as other endeavours to grow its economy.

Ethiopia - unemployment rateInnovation Boost

The industrial parks are anchored on the principles of enhancing economy of scale and efficiency through the development of specialized/clustered industrial parks, government provision of industrial park incentives targeted at increased export performance and competitiveness, maintaining high environmental standards through the use of renewable energy and zero liquid discharge technology, enhancing forward and backward linkages in the economy and developing worker’s skills for enterprise competitiveness.

PARK CLUSTER/SPECIALIZATION AREA (m2)
Hawassa Industrial Park – Eco Industrial Park Textile & apparel 1.4 million (Phase 1)
Bole Lemi Industrial Park (I and II) Textile and apparel, leather and leather products 3.5 million
Mekelle Industrial Park Textile & apparel, Footwear & Leather products 10 million
Kombolcha Industrial Park Textile & apparel, Footwear & Leather products 10 million
Adama Industrial Park Textile & apparel, Footwear, Machinery fabrication 10 million
Dire Dawa Industrial Park Open for multiple sectors, focused on export as it is the closest to port Djibouti 10 million
Kilinto Industrial Park Pharmaceuticals 2.8 million
Debre Berhan Industrial Park Agro-processing 10 million
Arerti Industrial Park Building materials & furniture 1 million

Source: Industrial Parks in Ethiopia – Incentives Package

Industrial parks are one of the most important factors supporting positive economy development, and Ethiopia is looking to leverage it extensively as it looks to becoming a leading manufacturing hub in Africa by 2025.


AUTHOR: Iweka Kingsley is the Founder/Publisher of Africa-OnTheRise.com

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