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Manufacturing could transform Ethiopia

14th January 2015

‘Ethiopia’s growth can be rapid. We will be one of the most suitable destinations for investment and a growth corridor for East Africa’. That’s how Tinsae Yilma of the Industrial Parks Development Corporation (IPDC) sums up the potential of the Ethiopian economy in the coming years.

It is an ambitious vision. With a young and fast growing population the Ethiopian government need to create new jobs every day just to keep pace with the speed of change amongst their population. In a country best known for poverty, coffee and distance running the potential emergence of large-scale manufacturing jobs in the coming years could yet leave the longest lasting legacy.

Ethiopia has decided to seize the opportunity presented by increasing labour costs in Asia and try to become a destination of choice for foreign investors looking to manufacture goods for world markets. The country is already home to the world’s largest manufacturer of women’s shoes Huajian Group employs over 3,500 people and this number is set to grow to more like 30,000.

One of the ways Ethiopia is targeting manufacturing investment is by making it easier for investors to plug their business straight into the country’s infrastructure. Major industrial parks like the one built at Bole Lemi on the outskirts of Addis Ababa are a critical part of this plan. Linked to the country’s transport network, already wired into the electricity grid and with affordable labour easy to access in large numbers it is possible to move a factory from being an idea to a reality in a matter of months – light speed in international terms.

AGI has been working with the IPDC as they look to set out their proposition to investors. This has involved day to day support for the staff who responsible for ensuring up to 10 industrial parks like the one at Bole Lemi get off the ground in the coming months.

Job creation on this scale is an impressive site but the human impact is significant, especially for households which have been unable to find work. The increased income brings more hope for the future to families in Addis Ababa and the site of so many Ethiopians finding work could yet bring hope to other countries in East Africa trying to tackle the same challenges of job creation and a growing youth population.