Opportunities and Challenges of Industrial Park Development in Ethiopia: Lessons from Bole Lemi and Hawassa Industrial Parks
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Date
2019-06
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Addis Ababa University
Abstract
The introduction of industrial park development in Ethiopia is currently a topical issue. Both the
Government and private developers are working on the development of industrial parks in
different part of the country and some of them have started operation while the others are
waiting for their completion. The main objective of this study is to exploring the experiences of
industrial park developments in African countries, focusing on identifying main opportunities
and challenges and lessons from and to Ethiopia. Both primary and secondary data sources
were used. Documents, key informant interview and focused group discussion were among the
main data collection instruments used to examine and show industrial development practices in
the continent and Ethiopia’s Bole Lemi and Hawassa industrial parks in particular. Officials and
experts from Ethiopian Industrial Parks Development Corporation and Ethiopian Investment
Commission, human resource managers from nine different companies, industrial park
managers and employees of manufacturing enterprises have responded the interview questions;
households who are evicted due to industrial parks constructions have also participated in the
focused group discussion and different documents reviewed. Data have been interpreted through
theoretical basis, basic standard, conception and comparative approach. The findings of the
study indicated that the industrial park development across the continent varies in terms periods
of establishment, opportunities and challenges witnessed in specific countries. Embarking on
industrial park development, Ethiopia has attracted foreign direct investment, generated
revenue, staged technology and skill transfer and created ample jobs. It offered investors
incentive packages, cheap labor and access to market with its attractive investment and legal
framework. The challenges in Ethiopian IPs are identified as high labor turnover, inadequacy of
infrastructure facilities, poor trade logistics and customs procedures, lack of access to foreign
exchanges and weak linkages of IPs with local economy. It also lacks strong coordination among
actors in the sector, experience and shortage of raw materials. It is also tested by lack of peace
and stability. Thus, at this level of their performance, industrial parks have little impact on the
country’s economy. While Ethiopia carries on expansion of industrial park development and
industrializations, it needs to consider building industrial culture and discipline, set a minimum
wage, establish market chain and strategically identify industry locations. Ethiopia should also
be vigilant on peace and stability issues.
Keywords: Industrial park, opportunities, challenges, foreign direct investment, employment,
technology and skill transfer, Ethiopia
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Keywords
Industrial park, opportunities, challenges, foreign direct investment, employment, technology and skill transfer, Ethiopia