A UN report has tipped Ethiopia to be the biggest recipient of private equity in eastern Africa, beating Kenya thanks to its friendly business environment and favourable industrial policy.
Ethiopia has promoted the development of industrial parks focusing on textiles, leather, agro-processing and pharmaceuticals, as part of its Vision 2025 that seeks to make the country a light manufacturing hub in Africa.
The 16th edition of the African Economic Outlook report released Monday says the development blueprint has made Ethiopia a magnet for manufacturing and service industries.
It sets the projected private equity inflows into Ethiopia this year at $4.4 billion (Sh454 billion) compared to Kenya’s $1.3 billion (Sh134.2 billion).
“For example, the Hawassa Industrial Park, inaugurated in July 2016, was designed and built by a Chinese corporation and includes 35 manufacturing facilities and one fabric mill, equipped with new and innovative technologies powered by green energy,” states the report prepared by a consortium of three teams from the African Development Bank (AfDB), the OECD Development Centre and the United Nations Development Programme (UNDP).
“The park has already attracted 15 major manufacturing firms from China, Ethiopia, Indonesia and the United States.”
The park aims to employ 60,000 people at full capacity and generate export revenue of $1 billion (Sh103.3 billion) per year.
The report cites another nine industrial parks that are under construction or in the pipeline namely the Diredawa, Mekelle, Adama and Kombolcha parks that are due to be completed during the 2016/17 fiscal year.
“Overall, the country (Ethiopia) is channelling $1 billion (Sh103.3 billion) of annual investment into industrial parks over the next decade.
The aim is to boost manufacturing exports, generate knowledge, transfer skills and contribute to job creation,” states the report.