Ethiopia’s government is actively promoting industrial growth by offering attractive incentives to both domestic and foreign investors. The state-owned Industrial Parks Development Corporation announced that in the 2016 fiscal year, 48 investors invested over $586 million to develop industrial parks and the Dredawa Free Trade Zone.
The corporation’s Deputy CEO, Mr. Dyman Junedin, highlighted that 90% of the 48 investors are domestic. The corporation allocated over 52 hectares of land and 16 production facilities (totaling more than 94,000 square meters) to these investors.
When operating at full capacity, the companies will generate employment for over 16,000 Ethiopians, according to Mr. Junedin.
In May, the Ethiopian Investment Commission shared that over the past ten months of the ongoing fiscal year, foreign investors have generated employment opportunities for approximately 75,000 individuals within industrial parks. Additionally, the commission organized eight investment forums aimed at attracting foreign direct investment to the country.
The corporation’s investment promotion centers are working to reduce imports and save foreign currency by producing substitute goods locally, such as beer barley malt.
To incentivize domestic investors, Ethiopia’s government and the corporation have introduced several measures. It now accepts rent payments in local currency rather than dollars and has lowered the upfront payment from 10% to 5% for indigenous investors entering the industrial parks.
In May, the Ethiopian Investment Commission (EIC) made an important announcement regarding foreign companies operating within industrial parks in Ethiopia. Previously, foreign companies in the industrial parks were not allowed to sell their products to the local Ethiopian market. They could only export their goods. However, the EIC changed this policy in April. Companies operating in the industrial parks are now allowed to sell up to 50% of their products to the local Ethiopian market.
Moreover, the corporation has increased the share of local producers in the industrial parks from 10% to 53% through operational reforms.
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