1 November 2012

Ethiopia: Creating Favourable Conditions for Industry


Ensuring broad-based, accelerated and sustained economic growth is the nucleus of the national Growth and Transformation Plan (GTP) of Ethiopia.

The government knew that the contribution of the industry sector is very crucial to transform the predominantly agricultural based economy thereby realize such development objective. But the narrow industrial base through which the country has come is the major constraint in transforming its economy. It is unable to create job opportunities for citizens and substitute imports in seizing the potential in the industry sector. That is why the government has paid due attention to the sector in making the highest level of support for export oriented and import substituting industries in the GTP period.

Creating favorable conditions for the industry to play a key role in the economy is clearly put as one of the pillars of the plan. Establishing industrial zones is among the strategies in pursuit in this regard. In fact, the main purpose of developing industrial zones is to attract more investment and investors by providing land with essential infrastructural services and creating an attractive environment for investors.

So far, two industrial zones, one by Chinese company and the other by Turkish company are established. The government has also set to establish Bole Lami Industry Zone on 156 hectares which is the first state owned industry zone to be opened after a month. The Industry zone would be managed by the Industry Zone and Environmental Protection Agency, established under the Ministry of Industry. The Ministry has also received more land from the Addis Ababa City Government and from states to develop and manage other industrial zones ahead.

Indeed, such industry zones run by a government is a typical of developmental states, and clearly indicate the country's commitment to bring about overall development, and poverty reduction by creating an employment opportunities, enabling increased exports and foreign currency earnings as well as providing local goods that substitute the imported ones. It is also a big move for the country towards realizing its aspiration in industry sector.

These and other industry zones to be established will be equipped with full facilities including financial institutions and government offices. They will also prioritize industries that have production chains, and strategically benefit the growth of the sector.

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