Several companies operating within Mekelle Industrial Park (MIP) have expressed intentions to relocate their production machinery to other countries due to ongoing security challenges in the northern region, raising alarms about the future of one of Ethiopia’s key industrial hubs. Meanwhile, government officials are actively engaging with investors to find solutions and retain operations within the country.
Mekelle Industrial Park, a government-owned special economic zone (SEZ) located approximately 760 kilometers from Addis Ababa, was inaugurated in 2017 with 15 factory sheds sprawling over 75 hectares. It is among Ethiopia’s largest industrial parks, primarily hosting garment and textile manufacturers. The park, along with others in the northern region, has suffered significant disruptions following the conflict in Tigray, which has led to investor withdrawals and operational halts.
According to Kamil Ibrahim, Deputy CEO of Operations and Management at the Industrial Parks Development Corporation (IPDC), some investors are in discussions about re-exporting their machinery abroad. However, efforts are underway to offer alternatives, including relocating machinery to other industrial parks within Ethiopia, such as Hawassa and Bole Lemi, to maintain production domestically.
“We have presented options to move machinery to other parks within the country instead of removing it from Ethiopia,” Kamil said, emphasizing the government’s commitment to preserving industrial activity despite security challenges.
IPDC CEO Fisseha Yitagesu acknowledged that the war has severely impacted not only Mekelle Industrial Park but also other northern industrial zones like Kombolcha, Debre Berhan, Bahir Dar, and Semera. “Investment cannot thrive in an environment of conflict,” Fisseha stated, noting that despite incentives such as rent waivers for over two years, many investors remain reluctant to resume operations.
The situation was highlighted during a recent review by the House of Peoples’ Representatives Standing Committee on Public Development Enterprises Affairs, which examined the IPDC’s nine-month plan implementation for the 2024/25 fiscal year. The committee noted that while over 72,000 jobs have been created across 13 economic zones and industrial parks, challenges such as low wages, limited benefits, and housing shortages have led to high worker turnover.
Bole Lemi Industrial Park has provided housing for more than 6,000 workers and plans to replicate this model in Adama and Hawassa parks to improve worker retention. The committee also stressed the importance of safeguarding industrial park land from unauthorized third-party claims to ensure smooth operations.
Despite the setbacks, export revenue from special economic zones and industrial parks reached $83 million over the past nine months, with an 87% occupancy rate of built industrial sheds. The government has allocated 230 hectares of land to investors this year, out of 423 hectares available.
