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The World Bank (WB) and the Ethiopian Government are conducting negotiations to determine if the former is going to finance Ethiopia’s industrial zone development, Capital has learnt.
Ahmed Abtew, Minister of Industry (MoI), has recently been dropping hints about international financers’ interests in financing the development of the sector.
A few years ago, the government provided plots for industrial zones to investors who mostly came from abroad. Some investors, however, were not making as much progress as the government had expected.
In order to make sure that its expectations are met, the government has started developing industrial zones on its own. The aim is not only to expand the industrial zones but also to attract large international manufacturers to invest in the country.
For instance, the first industrial zone under development by the government is Bole Lemi, which is hoped will attract several prominent manufacturers from South Korea and other countries.
According to the ministry’s plan, it will develop more industrial zones throughout the country by itself or through joint ventures (JV).
Currently, the government has almost completed the Bole Lemi Industrial Zone and other similar projects are expected to begin in Addis Ababa and other areas around the country.
Sources at the MoI said that the ministry is now negotiating with the World Bank to develop industrial zones on a massive scale.
On the other hand, the ministry has also made agreements with some other countries to secure loans for the construction of industrial zones.
The World Bank has financed several developmental projects including road, energy, and health and education projects. The support for the industrial zone will be the first financed by the World Bank if the financial institution decides to support the government’s industrial zone development.
The government is focused on developing industrial zones on its own in an effort to help the manufacturing sector meet its target output. Still it has not yet changed its strategy to allocate land to investors who wish to be involved in industrial zone development, according to sources.
Recently, the Ethiopian government signed a deal with the China Association of Development Zones (CADZ) to conduct a study for the development of Special Economic Zones (SEZs).
The SEZ development includes not only the development of industrial zones, 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 produce the goods manufactured in the SEZ at globally competitive prices.
The categories of SEZs include 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