Assessment of Performance of Ethiopia’s Special Economic Zones Under the Home-Grown Economic Reform Agenda: Evidence from Employment and Exports in Selected SEZs (2017 – 2025)
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Date
2026-06-01
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Addis Ababa University
Abstract
This study examined the performance of Special Economic Zones (SEZs) in Ethiopia under the Home-Grown Economic Reform Agenda focusing on employment and export outcomes as well as a discussion on social and environmental changes. It aimed to assess the performance of SEZs under HGER by analysing measurable economic results and briefly discussing institutional and operational changes that shaped these outcomes. In doing so, the study aimed to address a gap in existing studies which focus on evaluating SEZ performance with limited indicators without consideration of recent policy reforms and implementation dynamics. The research used mixed methods approach combining quantitative analysis that focused on examining employment and export performance and qualitative analysis that looked into how the reforms were experienced and implemented in practice. Both approaches compared pre reform (2017 – 2019) and post reform (2020 – 2025) periods. For the quantitative analysis descriptive statistics were complemented by econometric analysis using a fixed effects panel model that removes permanent differences across SEZs ensuring the estimated effect is driven by changes over time rather than structural differences between zones and across time. For the qualitative analysis document review and a semi structured interview with relevant stakeholders was used to assess the perceived impact of HGER measures on SEZ operations, incentives and support provided, challenges and opportunities and social and environmental considerations. In total, 14 semi structured interviews were conducted across three selected SEZs including Hawassa, Bole Lemi and Adama, involving SEZ managers, workers representatives and government officials. The findings show that average employment and export levels were higher in the post reform period with employment increasing by approximately 53 percent and exports by approximately 105 percent on average relative to the pre reform period. However, these changes fluctuated across zones and time suggesting that the study does not provide strong evidence to attributable measurable performance improvements directly to the reforms. The qualitative findings helped explain this pattern by showing that there are gradual improvements in things related to governance, institutional coordination and social and environmental standards but structural challenges related to infrastructure inefficiencies, foreign exchange constraints, logistical issues and labour related problems persist limiting performance and contributing to the fluctuations observed in the quantitative results. The findings suggest that the reforms may have contributed to improvements in the institutional and operational environment of SEZs although their measurable economic effects remain unclear highlighting the need for continued institutional strengthening and improved policy coord
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Special Economic Zones, Home Grown Economic Reform Agenda, Export, Employment, Social and Environmental Impacts.