AA Administration to relocate 234 factories to the outskirts of the city

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The Addis Ababa Administration is reviewing a proposal to relocate 234 industries based in Addis Ababa to specific industrial zones just outside the city.

Tanneries, leather, metal and aluminum, food and beverages, chemicals, tobacco, textiles and garments are the industries targeted for relocation, according to the Draft Executive summary of the Addis Ababa and the Surrounding Oromia Special Zone Integrated Development Plan for Ethiopian Renaissance.

The draft master plan reads that the city should develop and integrate industrial parks and zoning in proximity to Mojo Dry-Port, Teji International Airport, the newly developed railways and major infrastructure like truck lanes and highways.

The plan aims for the city to be the most competent industrial agglomeration in East Africa and the leading economic sector by increasing regional contribution to GDP from the current 24 percent to 32 percent, in order to reach the economic level of middle-income countries by 2023.

Ethiopia aims to attract foreign investors, moving manufacturing from China and other Asian markets, where costs are rising. Ethiopia offers cheap labour and fast, improving power supply, transport and other infrastructure. Luring new industry is seen as vital to maintaining high growth rates in Ethiopiaís still largely agrarian economy. The economy has expanded annually by double digits in the past decade and is forecasted to grow by 10 percent or more this year.

The industrial parks are central to Ethiopiaís plans to build an industrial base, with textiles and garments seen as key, in part because the country benefits from the U.S. AGOA trade pact allowing duty-free exports to the U.S. market.

The industrial zones offer land for factories at USD 1 per square meter a month, tax holidays for up to seven years and customs and other services on site for those investing.

The master plan states that lack of an integrated, industrial development strategy at the city level, weak enforcement of regulations and high pollution levels, low levels of infrastructure and industrial linkage, and unskilled manpower and low institutional capacity leading to low productivity are the major challenges facing the manufacturing sector right now.

By developing industrial parks, clusters and zones for productivity improvement and for attracting foreign investment the city should ëaddress the problems developers encounter in industrial waste management and infrastructure, increase green development in the industrial zone and parks, and expand and strengthen training institutions to increase labor productivity,í  the plan argues.

The integrated master plan will be implemented jointly by Addis Ababa City Administration, Oromia Region, Oromia special zones and the federal government?