Special Economic Zone to be established


The government is launching a study on the establishment of Special Economic Zones (SEZs).  
A delegation led by Sisay Gemechu, state minister of Industry, who is responsible for investment and industry zone development, visited China this week to conclude a deal with the China Association of Development Zones (CADZ) to undertake the study.
The ministry and CADZ signed a memorandum of understanding (MoU) in April this year and a delegation of experts from CADZ visited Ethiopia in May.
Sources at the ministry said that the experts visited several sites and discussed with representatives of the Ethiopian government on the establishment of the zone.
“CADZ has understood Ethiopia’s basic ideas on establishing SEZs as well as the challenges and difficulties that may be encountered in developing industrial parks and also the objectives and requirements for Ethiopia on the project,” sources said.
Sources at the ministry told Capital that the current visit of the Ethiopian delegation to China is to finalise the deal to commence the study.
According to sources, the Ethiopian embassy in Beijing has played big role since 2012 to create the link.
“Seyoum Mesfin, Ethiopian ambassador to China, played a vital role in consultations and discussions with CADZ on the cooperation in consulting project on SEZs in Ethiopia,” sources added.
The draft document for the study says the aim is to develop SEZs in line with Ethiopia’s economy, politics and laws and to provide macro guidance for their establishment.
According to the document, the aim is to carry out the master development plan for the proposed first SEZ in Ethiopia.   
Under the plan, the government plans to establish the first SEZ in Dire Dawa City Administration, close to Djibouti Port.
An investment feasibility study and spatial plan on Dire Dawa SEZ will also be included in the study.
Two years ago, the former Prime Minister Meles Zenawi on a visit to China invited Chinese companies to invest in Ethiopia.
One of the locations that the Ethiopian government allocated for Chinese investors was Dire Dawa.
The city administration has prepared an industry zone area which is highly attractive in terms of infrastructure and proximity to the sea port, however the investment has not yet commenced.
Industry zone development has grown in the past five years, with Turkish and Chinese companies involving in the sector development.
The government has also facilitated several incentives for the private sector to get involved.
Due to delays from the private sector, the government has taken on much of the development by itself.
The first industry zone established by the ministry at Bole Lemi, on the eastern outskirts of Addis, is nearly ready to be transferred to private manufacturers.
The ministry has also signed an MoU with Eshet, an Israeli firm, to establish an industry zone in Kombolcha, 255km north east of Addis in Amhara regional state, on JV.   
The government has also decided to establish a corporation under the ministry to handle the sector development closely.
The SEZ development includes not only the development of industries under zone, but also other economic sectors within a similar area.
An SEZ is a geographical region that is designed to export goods and provide employment.
SEZs are exempt from federal laws regarding taxes, quotas, FDI-bans, labour laws and other restrictive laws in order to make the goods manufactured in the SEZ at a globally competitive price.
The category SEZ includes free trade zones (FTZ), export processing Zones (EPZ), free Zones (FZ), industrial parks or industrial estates (IE), free ports, free economic zones, and urban enterprise zones.