Ethiopia has become one of the fastest growing economies in the world by registering a double digit GDP growth rate during the last decade. Though Ethiopia has an agriculture based economy; currently the government has formulated and implementing a five year Growth and Transformation plan that envisage the transformation of the economy into industrialization.
Ethiopia has an area of 1.14 million sq. km, out of which 513,000 square kilometers (45%) are arable land and 34,200 square kilometers (3%) is irrigated land. The agriculture sector accounts for 41% of the GDP, provides 85% of employment and 90% of foreign currency earning.
There are 18 major agro-ecological zones and 32 diversified or sub agro-ecologies. The temperature ranges from 20oC to 30oC, the altitude from -125 meter below sea level to 4620 meter above sea level and annual rainfall varies from 200 to 2500 mm. There are two seasons: the dry season prevails from October through May. The wet season runs from June to September. The main sources of water are ground water, rivers and rain.
Ethiopia has an investor friendly policy and the investment proclamation encourages investors by providing a package of investment incentives.
A one-stop-shop where all the services including land clearance is given in one window is being developed. Ethiopia has a skilled and semi skilled labor with a reasonable cost and available electric power with inexpensive price.
Investment in agricultural agriculture products as well as value addition to the agricultural products is highly encouraged. The priority areas in the agriculture sector are, cotton, horticulture and floriculture. The government is developing economic zones for commercialized farming while land on lease is available around main cities where the infrastructure and the necessary facilities are in place. In the manufacturing sector the priority areas are agro-processing, textile, leather goods, pharmaceutical, chemicals, metal, IT etc.
Industrial Zones in Ethiopia
Industrial zone
Ethiopia is developing industrial zones with the necessary infrastructure and facilities. The Bole Lemi Industry Zone located in the capital city, Addis Ababa provides a complete facility for investors. In other areas namely, Akaki Kality sub city, Dire Dawa City Administration, Kombolcha (Amhara Regional State), Mekele (Tigray Regional State) both in the North, and Hawassa (Southern State) similar facilities are in the process of developing industrial zones. These zones will be equipped with full facilities including financial institutions and government offices.
The zones prioritize industries that have production chains or that will strategically benefit the growth of the sector including in the government priority sub sectors such as textile manufacturing, leather processing, metal works, agro processing and pharmaceutical manufacturing. Therefore, Investors will only need to set up machinery in the building and facilities developed and owned by the government.
