Selecting a project site without a conducive business environment is a fundamental strategic error. Placing projects in locations lacking essential business environments—such as poor infrastructure, limited supply or market access, inadequate utilities, or disharmonious conditions—drives operational inefficiencies, extended ROI timelines and potential bankruptcy. This is akin to stumbling in darkness without recovery plans.
Building a hypermarket in a rural area where there is no conducive environment exemplifies this. It faces low footfall due to low economic capacity of people around, lifestyle mismatches, and logistics barriers, erode profit margins. So this leads to prolonged struggles to get return on investment which may not be successful. The local community’s purchasing power and lifestyle must match the business installed.
Similarly, in business context, the dislocation people in new places with no proper study on the possible consequences where location and environment related risks the gap and low-quality infrastructure, import delays, and land expropriations and inconsistent compensation after displacement amplifies business challenges. Generally lack of essential facilitirs undermine small scale business. Distance from target consumer bases and reliable suppliers are big issues. Besides, bureaucratic hurdles, corruption perceptions and transaction and exchange delays further strain business due to remoteness of sites or distant from suppliers and markets.
More often than not rural placements suffer from power shortages, poor roads, and limited internet, raising logistics costs and delaying supplies of essential items causing strain on business sustainability until infrastructure catches up to render salient service that too if it does. In addition, capital will remain tied up longer than projected, till access to finance from customers comes to compensate the constraint.
The business landscape associated with poor roads, power shortages, and security -related issues in regions intensifies risks deterring customers and raising costs of supply due to difficult transport, and delays. Supply shortages, land expropriations, and corruption compound rural or outskirt site failures. Further almost all small enterprises face poor infrastructure as a top obstacle along with other financial gaps. This mirror broader utility and market access deficit
Though the city renovation initiative through corridor development is commendable, there is a social non official complaint due to short notice evictions or forced displacement without adequate planning. The displacement disrupted severely community ties destroying existing micro-economies related to small businesses among displaced in these areas where they faced livelihood challenges. Income losses because of relocation to outskirts lacking sufficient infrastructure, schools, health facilities and services, lead to unsustainable welfare severed community economies.
The displacement in peri-urban areas like, where rapid industrialization takes place, small business faces challenges without sustainable welfare, eroding assets and social economic networks overshadowing long-term urban benefits. This is not to mean that there was no government attempt to facilitate but there is still a long way to go to fully compensate and bring the long term trend of business and living environment they used to enjoy.
While government efforts to facilitate compensation and resettlement have been attempted, the measures remain incomplete. There is still a long way to go to ensure that displaced communities regain the stability, business continuity, and living environments they once enjoyed
Key Consequences
Financial Pressure: Elevated transport and logistics expenses compress margins; access to finance ranks as top obstacle for small firms. Market and Supply Gaps: Distance from consumers and suppliers limits sales potential and increases vulnerability to inflation. Operational and Legal Strain and utility deficits drop efficiency add unpredictability on business benefits. Relocated businesses lose their customer base and face new infrastructural deficits, leading to asset erosion and income loss.
Mitigation Strategies
Conduct thorough study with due diligence the social-environmental impact assessments, market proximity analysis, and infrastructure audits before trying to implementing commitment. Partner locally better prioritize regulatory navigation on urban or industrial zones available utilities functionality, and build contingency plans for logistics and other risks to ensure quick returns weaving a critical social dimension which are often overlooked. Adjust environment with clusters of proven utilities and supplier networks.
There is a need for deepening relation along partnerships with reputable private local entities to fill the gap of community needs by establishing relations with various supply chain to create logistics improvement. Start with a pilot or smaller-scale operation to validate assumptions before full-scale commitment and implementation venture. Budget and plan for backup power (solar/mini-grids), water storage, and diversified logistics routes should be allotted adequately.
Proactively engage with local community leaders and authorities to get feedback and meet their basic needs. For projects in development corridors, energetic promotion must be made for obtaining participation from both private and government units in transparent, timely, and fair condition to help resettlement action plans (RAPs) meet the intended objective. This mitigates reputational risk and. It is better to start dealing with the reality in honesty to avoid negative social backlash.
The Addis Ababa Corridor Development Project (CDP) represents achievement by the Ethiopian government, completing major phases in remarkably short timelines—such as the Piassa , 4 Kilo corridor in just three months—while transforming urban infrastructure across hundreds of kilometres. Launched in 2022 with phase one covering over 40 km of enhanced streetscapes, bike lanes, and public spaces, the initiative has expanded rapidly, with over 300 projects finished nationwide by mid-2025, including 500+ km of roads in 60+ cities
All the same , despite the challenges of addressing diverse needs, the government’s effort to complete such large-scale corridor development projects within a short timeframe stands as a record-breaking success that bring such radical change or renovation of the city which can be marked as foot print of the present government.
This transformation has brought ultra-range improvements to the city bing a powerful demonstration of what can be accomplished if there is effective commitment in the administration. It is actually giving new light to the path of project execution like never before in the nation. Every move including the coordination of different sectors and the work culture with construction activities undergoing 24/7 is a lesson to improve the old way of dealing with construction activities.
Works operated day and night to meet deadlines ahead of rainy seasons, delivering asphalt roads, pedestrian walkways (e.g., 33 km in one 16.5-km corridor), drainage, green spaces, and smart city features like plaza’s, parking lots, smart street lights and telecom upgrades. The projects have revitalized slums, restored heritage sites, boosted local employment, and ignited economic activity by easing traffic and enhancing business environments, positioning Addis Ababa as a model for liveable, investment-as attractive cities. It is overwhelmingly amazing achievement with all its gaps that no one can deny. It really is off the scale of expectation.
Addis Ababa’s riverside development initiatives, spanning 44 km and focusing on cleaning polluted rivers such as Kebena and Sheger, while enforcing anti-pollution regulations with fines that prevent pollution are closely aligned with the city’s broader corridor development strategy. These efforts not only deliver commendable sanitization and foundational infrastructure but also enhance economic growth by creating small-scale freshwater fishing dams, safeguarding the environment for generations to come creating vibrant tourist attractions, generating jobs, and establishing inclusive public spaces in the city.
This is commendable effort for development; it is a promise of a healthier, more prosperous, and more inclusive Addis Ababa. A city where rivers flow clean, communities thrive, and progress and experience is shared by other towns in the regions.
