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Ethiopia’s industrial revolution sparks hope for its economic reformation

Despite having the second largest population in Africa, Ethiopia’s game plan to uplift its economy seems to be paying dividends.

In the first quarter of 2017, Ethiopian authorities unveiled the Hawasa Industrial Park – the biggest in Africa, standing at 140 hectares and containing mostly textile factories. The project was complete in record time — nine months to be exact– by a Chinese construction company. Since then, the park has secured business from top textile and apparel companies.

PVH Corp, the company behind Calvin Klein and Tommy Hilfiger among others, is just one foreign investor to choose Ethiopia as their manufacturing portal. At the opening, the organisation’s chief supply chain officer Bill McRaith said while all sub-Saharan African countries were considered, Ethiopia was simply the more affordable choice. He wasn’t just referring to labour costs, but also to the country’s commitment to using renewable energy sources.

“There’s a relatively stable government, actively involved in making this work, and when it came to all the normal dynamics of labour costs, power etc. it fitted the bill perfectly.”

Government’s focus on economic reformation through developing world class industrial parks might have paid off.

Arkebe Oqubay, special adviser to Prime Minister Hailemariam Desalegn, is said to be the father of the country’s industrial revolution.

He says with Ethiopia’s population growing at five percent a year there is a need for close to a million jobs annually. Despite high unemployment however, Mr. Oqubay remains confident that a turnaround is on the cards.

“Population growth…is not only a challenge, but also an opportunity…if it’s linked with quite rapid economic growth.”

So far Hawasa Industrial Park has employed 10,000 people. At capacity, it will provide 60,000 with jobs. This is only one such park in the country.

Says Mr. Oqubay: “The aim is that GDP will grow by 11% annually for the coming 10 years and the manufacturing sector will grow by about 25% every year.”

The ambitious plans the country has for its future has been met with enthusiasm from foreign investors. Already, 18 companies from 11 international destinations have signed up to use Ethiopia’s services for their products.

The LEX Africa member for Ethiopia is Gebreamlak and Associates Law Office

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