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.

Keywords: economic zones, industrial parks, development, job opportunities, export, foreign currency