Capital Ethiopia Newspaper

New industrial zone to boost local investment

By this September, the Ministry of Industry (MoI) expects to open the first industrial zone managed by the Industry Zone and Environmental Protection agency, established under MoI.

Melaku Taye, Public Relations Head of the Ministry, said that the Bole Lemi Industry Zone, which rests on 156 hectares, is expected to be finished by this Ethiopian New Year and will be opened to local and foreign developers. 

The Ministry office has also received additional plots from the Addis Ababa City Government and other regions to manage and develop industrial zones.

According to Melaku, MoI has received 243 hectares of land at Kilinto area, Akaki Kality Sub City and 1051 hectares from the Dire Dawa City Administration.

“The ministry office has also received other plots from Amhara, Tigray and Southern Nations Nationalities and Peoples’ (SNNP) regions,” the Public Relations Head told Capital.

According to the head, Kombolcha, Mekele, and Hawassa are the selected locations in the three regions respectively. “These and other industry zones will be developed by the government in the coming years for private developers to invest in,” he added.

According to the government’s plan, industrial zones equipped with full facilities, including financial institutions and government offices will be opened.

“We will give priority to industries that have a production chains or that strategically benefit the sector’s growth,” Melaku said.

“The new scheme will allow local investors to be involved in the manufacturing sector without any other process,” he explained.

Despite the government’s effort to expand the involvement of local investors in the manufacturing sector, many have had difficulties succeeding.

To form the industrial park, the ministry office gave out plots to various local investors to establish medium and heavy industries in the outskirts of Addis Ababa around Tatek area. However there has been a lack of investment so far.

“Most of them are using the land for other purposes so this is why the government has stepped in to build the industrial parks,” the Ministry Public Relation Office said.

Local investors had a difficult time obtaining capital which slowed down the growth of the manufacturing industry.

“The government’s involvement in industrial zones will encourage local investors to participate in the manufacturing sector,” he explained.

According to the plan, private investors will come with their machines to start the production at the industry zone, while the building and other facilities will be owned by the government.

Last year the industrial sector grew 15 percent and its contribution to the GDP was 13.4 percent in a similar period. Eleven years ago the country secured USD 80.5 million from the sector export, while in the past budget year the manufacturing export was USD 107.7 million. According to Melaku, in the first eleven months of the current budget year (from July 8, 2011 to June 7, 2012) the country earned some USD 230.4 million from exporting manufactured products.

Textile, leather, metal, agro processing and pharmaceutical manufacturing sectors are the priorities that get government attention from the sector growth.