Analysis of Industrial Parks Development in Ethiopia

Abstract

This paper examines the economic contribution achieved by the introduction
of the industrial park concept in Ethiopia. The study relied on both primary
and secondary data obtained from various sources. Both descriptive and
analytical methods were employed as data analyses methods of the research.
The study found that even if industrial parks are creating job opportunities,
75% of their employees were not happy with their working conditions as a
result of low wages. The study also revealed that there were no backward and
forward leakages between manufacturing companies working in the
industrial parks and domestic companies and suppliers. The construction of
almost all of all industrial parks in Ethiopia was financed by European
Investment Bank, the World Bank and other financers. Hence, there are
concerns as to how the Ethiopian government would pay back the money.
Those concerns emanate from reports that indicate some industrial parks are
not still attracting enough domestic and foreign investors who are interested
to invest in the parks. Based on the results of the analyses, the author
concludes that, despite the significant potential that the industrial park
concept presents to Ethiopia’s ambitious development agenda, a number of
considerations must be given to the wider regional expansion of this concept
based on the experience. Furthermore, the side-effects of industrial parks on
investment climate outside the parks are not thoroughly dealt with because
parks are at their early stage. These issues need further research.