Industrial parks serve as an engine for economic growth


Ethiopia has been moving in the right direction on the development endeavor with combining its capital, human resource, land and finance for the creation of wealth, and the natural resources serves as a base for economic growth in this regard. The plan commission and the Ministry of Finance played pivotal role in planning and allocating budget for development projects. The country exerts its energy in full capacity to change agricultural led economy in to industrial led one but still the contribution of industry to the nation Gross Domestic Production is negligible.

Rather the service sector is surpassing the agriculture in its contribution to the GDP, but its job creating capacity is very less than the other sector.

Currently, industrial and agro-industrial parks are flourishing in various parts of the country and hosting both local and foreign companies.

Since 2014, GC the industrial parks are active in production and supplying their products to foreign and domestic market and play pivotal role in boosting the nation foreign currency earning capacity.

Last week, the Industrial Parks Development Corporation (IPDC) presented its six months’ performance report. As learned from Henok Asrat, IPDC Marketing, and Communication Department, over the past months, the corporation managed to attain achievements that can win the hearts and minds of the public.

He further said that, the IPDC has been continually striving to meet its plan on expanding industrial parks in various parts of the country. Currently, approximately around 96.81% of the Semera Industrial Park construction work has been completed. Over the past 6 years the industrial parks have been creating job opportunities for thousands and out of the total employee 5469 of them are men while 28,402 of them are women. Totally, the parks managed to create 33,371 job opportunities all over the country. As compared to last year, the employment capacity grew by 52 percent.

According to Henok, the reason behind this achievement is that investors in Adama and Bole Lemi Industrial Parks were able to hire a large number of workforces. On the other hand, Kilinto and Bahir Dar Industrial parks have already become operational.

He stressed that to attain the objectives of import substitution, worth of more than 55 million USD locally produced goods have been supplied to the local market. As a result, significant amount of hard currency could be saved which would have been allocated for importation. Previously worth of 80 million USD goods have been distributed in the local market. As a matter of fact, this achievement has brought a 33.6 percent increase compared to the same period last year.

Henok remarked that the government has planned to provide the necessary raw materials that can be utilized as inputs to the industries from local market. To implement the plan, 20 companies from five different industrial parks have created trade links with local manufacturers and farmers. The business linkage has helped the nation to transact more than 23 million USD in the fiscal year. In the current fiscal year, Ethiopia has generated the highest profits out of the industrial parks production activities.

The Communication Director further stated that companies in the industrial parks have generated over 104 million USD from export. The achievement has surpassed the last year plan accomplishment by 25 percent. In addition, starting from the first day of exporting till now, the government has secured 839.77 million USD in aggregate.

According to the report, the corporation has built around 177 factory shades. Out of these shades, some 158 of them hosted investors, and more than half of the investors which is 98 in number started productions. In the ICT Park, around 4920 square meter area of land is availed for rent and out of it 1937 square meter of the area is rented. Besides, 61.42 hectares of land have been transferred to investors. The corporation has also been working on finalizing a one stop service with regard to taxation, revenue collecting and working hand-in-glove with the stakeholders.

As to Henok, two foreign companies, namely Elauto Engineering (car manufacturer) and Dimitrios Kampouris have signed an agreement with the corporation to begin production.

“In fact, some of the industries might be unfriendly to the environment. In order to tackle such impacts, the Corporation has prepared an Eco- friendly industrial production. Likewise, the Corporation planted 785,305 seedlings for environmental protection ventures.” added Henok.

The Communication Director noted that the corporation has provided 127 trainings to the interested investors. In addition, it has signed agreements with various stake holders which enable to secure worth of more than 11 million birr.

In the current fiscal year, the corporation has planned to get 97.05 million birr profit. During the first six months, the corporation secured 32.33 million birr profit.

The Planning and Monitoring Department Head, Tsegaye Zekarias on his part said that, the corporation has been discharging its social and national responsibilities as it should be and provided 32 million birr for the victims of the war and the Ethiopian National Defense Forces.

He revealed that, the corporation has faced difficulties on issues with regard to dispute settlement to preserve its land holdings, electric power interruption, and shortages of construction materials and piped water. The corporation has registered a 30 million birr profit this year though it was suffered due to shortage of budget to cover its running cost.

As it is known, the objective of the expansion of industrial parks is to boost the role of manufacturing sector in the economy. Currently, the sector’s contribution to the Growth Domestic Production is only 14 percent and this indicates that how the nation is lagging behind many developing countries. Agriculture still continued as the main stay of the economy by serving as means of living for 80 percent of the population. The sector is rain fed and highly vulnerable to extreme climate condition. In time of adversity farmers might face dangerous situation due to crop failure. The rapid population growth also mean a threat to the sector because it makes farms to be fragmented because, farmers share their own land to their children when they become above the age of 18, which intern deducts the yield.

Even currently according to the Ethiopian economics association report in the rural part 30 percent of farmers are land less, and unless the excess labor stranded in the rural areas shifted to the none farming sector, attaining sustainable growth and structural change is impossible. Hence, the expansion of manufacturing sector hosted in the industrial parks should be taken as a viable solution. Manufacturing helps to boost export, substitute import, create linkage between agriculture, and industry attracts foreign direct investment, creates job opportunities for thousands by absorbing unemployed army migrate from rural to urban centers. In the past, the successive governments try their level best in achieving economic growth by their capacity. They laid ground for economic growth by stretching infrastructures such as roads, educational institutions and health sectors. However though economic growth is registered, attaining structural change is still out of site. Ethiopia aspires to reach the middle income country level by 2030 but unless the working forces engaged in agriculture reduced step by step and shifted to in favor of none farming sector, meeting the target will face uncertainty.

In sum, in order to register robust economic growth and achieve sustainable development in all aspects, every sector must exert its effort diligently. Industrial parks should also be expanded and continue their role in accommodating companies engaged in manufacturing and agro-business.



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