Forum converses on the prospects and challenges of Industrial Parks Development in Ethiopia

Dec 26, 2017

Left to right: Mr. Daniel Gad, Owner and Managing Director of OMEGA Farm, H.E Mr. Fitsum Arega, Commissioner of Ethiopian Investment Commission and Mr. Eyesuswork Zafu, Board of Director of the United Bank S.C

The 16th Executive Idea Exchange Forum discussed on the theme “the prospects and challenges of industrial parks establishment for Ethiopia’s economic development”. The quarterly held forum is organized by the Department of Management, College of Business and Economics, Addis Ababa University in partnership with UNDP to advance national discourses on current and emerging development issues

Panelists were drawn from the financial sector, the private representatives and Government representative from the Ethiopian Investment Commission.

Mr. Elias Genete, President of the Addis Ababa Chamber of Commerce, highlighted in his welcoming remark the importance of such forums in promoting excellence by facilitating dialogues to maximize the role of higher learning institutions in policy formulation and implementation.

A paper on Industrial Parks Development (IDPs): Issues, world experience and lessons to Ethiopia was presented by Dr. Alebel Bayru, a researcher from the Ethiopian Development Research Institute. The study argues that IDP is a policy instrument for structural transformation, industrialization and urbanization. It also highlighted the fact that IDPs doesn’t automatically guarantee successes but requires realistic goal setting and the designing of feasible implementation mechanisms.

The study identified major constraints of industrialization in Ethiopia that includes but not limited to lack of capital, shortage of foreign currency and low productive capacity. While the value addition of Industry in the GDP remains low at 16% in 2016/17, the country can benefit from attracting investment, improving export and employment creation as a result of development oriented IDPs.

The paper also highlighted the potential of IDPs as a catalyst for liberalization and looked at the case of China in the implementation of Special Economic Zones (SEZs) that facilitated economic liberalization, increased Foreign Direct Investment and generated large number of employment in China. While examining the successes of IDPs in the past, the paper cautioned against the negative impacts of IDPs that included increased income disparities, exploitation by multinational companies and environmental degradation.

According to Mr. Fitsum Arega, Commissioner of the Ethiopian Investment Commission, Ethiopia is on the right track in attracting investors, using FDI as a source of capital while implementing environmental friendly IDPs that are labor intensive. The commissioner assured that the government is encouraging local investors, to engage in the manufacturing sector, by providing them 85% loan through the Development Bank of Ethiopia. 

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