Very recently, the Ethiopian government has devalued Birr against US.Dollar aimed at improving foreign exchange earnings. It has been building a number of industrial parks nationwide to this end as well.
On several occasions, scholars also say :” The ongoing industrial development will be the best option in strengthening the nation’s export performance ,if it is proven successful.”
Bearing this in mind , the government has been constructing eleven industrial parks at a cost of thirty billion Birr. Out of these industrial parks, four parks have so far gone operational.
For instance, the nation earns 1.5 million USD every month exporting textile and garment from Hawassa industrial park alone.
The country has also envisaged to gain 400 million USD from textile and garment export in this fiscal year. The Hawassa industrial park, hence, will cover one- fourth of such sector’s export earnings.
According to Industrial Parks Development Cooperation General Director Sisay Gemechu , the expansion of industrial parks will increase the quality and quantity of the export while improving foreign trading.
In similar vein, Special Advisor to the Prime Minister and Industrial Parks Development Cooperation Board Chairperson Dr. Arkebe Oqubay says as a big country, Ethiopia’s foreign trading will not rely on agricultural export any longer through only importing commodities.
Of course, the country has set a lofty goal of becoming the hub of light manufacturing by 2025.
Dr. Arkebe indicates that multinational companies have begun to enter Hawassa Industrial park in droves and they are now playing due role in transforming technology, creating jobs and boosting the country’s foreign trading. Nowadays, there are 18 multinational companies operating in this park – the largest industrial park in Africa. The park has so far created 12,000 jobs as well.
Ethiopian Civil Service University Tax and Investment Lecturer Prof. Feshatsion Mengistu also says :”Ethiopia is one of the developing countries in the world and so its foreign trading income is insignificant. The same is also true for the country’s manufacturing technology. The management skill for running business has not yet developed. Most of the basic commodities are being imported .”
He ,therefore, stresses that the industrial parks need to solve the aforesaid challenges. ” The country needs to focus on import substitution than boosting foreign trading. This is because the main determinant of foreign trading is the buyers not the manufactures. “
For Addis Ababa’s University Economics Department Head and Lecture .Dr. Atlaw Alemu ,the country’s economy has to cease its dependency on agriculture, trade and services and so the share of industry in the economy needs to grow by any means.
He also urges that local investors and manufactures to enter the industrial parks outnumbering the foreign ones.
Responding to those who say many investors have not showed interest in renting sheds in the industrial parks, Sisay says good enough number of investors have already bought sheds in the parks that have gone fully operational so far.
Dr. Atlaw for his part says good manufacturing practices by itself are not enough . The goods have to be sold in the global market . “One way to create international market for the goods produced in those industrial parks is attracting multinational companies to invest here by offering various incentives .”
Also , he underscores that the industrial parks have to be built in close proximity to the ports with a view to benefiting a lot from the ongoing industrial development.
Both Prof. Feshatsion and Dr. Atlaw say if the country manages to attract local investors in setting up manufacturing business in the parks along with multinational companies that do not incline towards fraudulent acts, its efforts of boosting foreign trading will be successful.