Industrial Parks as Engines of Economic Growth in Ethiopia

Ethiopia aspires to become one of the manufacturing hubs in Africa. In order to achieve this, the government has undertaken huge infrastructural projects including electric power, railways, highways, industrial parks and other enabling projects.

I am very proud to be part of this great national undertaking. Between 2015-16, I was fortunate enough to be part and lead the effort to draft the Industrial Park Proclamation, Regulations and Directives. The Proclamation has broad objectives: 1) accelerate the development of the country’s technological and industrial infrastructure; 2) encouraging private sector participation in manufacturing industries and related investments; 3) enhance Ethiopia’s economic development and global competitiveness, and 4) create employment opportunities for a growing population.

As a result of the Proclamation, the Ethiopian Investment Commission was reformed to play the leading coordinating role to implement the industrial parks strategy. The Industrial Park Development Corporations were established at the federal and regional levels with the aim of developing industrial parks, the necessary infrastructure and to supporting investors.

To date, more than 100 investors have been attracted in the manufacturing sectors in more than 15 industrial parks built by public and private industrial park developers. One of the important elements of the Proclamation is its encouragement to private industrial park developers. To date there are 5 private industrial park developers and many more are likely to come alone or through the new public private partnership (PPP) arrangement.

In the first phase of implementing the Proclamation, the focus was on efficiency seeking investments mainly labor intensive and export focused industries like apparel, footwear, textile and leather products. More than USD 4 billion worth of investment have been attracted to date and many more are on the pipeline.

The government is side by side engaged in implementing the second phase of Industrial Parks Development: resource seeking industries. In the second phase, the aim is to add value to commodities that are being exported raw. These include coffee, sesame seeds, fruits, honey, livestock, and so on with the aim of continuing the economic growth, transforming agriculture, creating the much needed jobs, earning foreign exchange among others.

The development of the second phase of the industrial parks enables the improvement of agricultural productivity as small holder farmers will produce for the market through, contract farming, out-growers scheme, improved supply chain management and Rural Transformation Centers.

One of the four Integrated Agro-Industrial Parks is being built in Yirgalem town. Yirgalem is a town in Sidama, Ethiopia, located 290 km from Addis Ababa or 40 km from Hawassa. It was selected due to its resource base, labor and infrastructure availability. Sidama is generally known for its hard working people, high quality organic coffee, dense avocado trees, honey, etc.

The construction of Yirgalem Integrated Agro-Industrial Park began on March 14, 2017.

Sunvado Plc., began implementing its project inside Yirgalem Integrated Agro-Industrial Park in 2018, with the vision of offering local avocado farmers access to export markets.

Sunvado provides agronomic services to 73,000 smallholder farmers which produce premium value organic avocados. To date in addition to the construction works employment opportunities, hundreds of processing jobs have been created at Yirgalem Integrated Agro-Industrial Park.

During the avocado harvesting season, Sunvado employs some 60 workers, half of whom are women. There are also 200 extension workers, field staff, harvesters and collectors.

Organic avocadoes are grown by more than 73,000 smallholder farmers with a local variety. Sunvado employs a team of 30 extension workers and support staff, who help guarantee the traceability of their organic avocados.

Sunvado is providing different types of trainings to its employees and extension services to its supplying agents and farmers. It is also providing mobile phones and motorcycles mainly for coordinating the collection.

Sunvado is setting up local nurseries that hand out seedlings to farmers. The farmers can plant these seedlings to rejuvenate their plantations. In addition, they are distributing beehives. The bees help to pollinate the avocado flowers and produce honey. They are also using the avocado waste from their processing facility to produce compost. This compost is handed out to farmers, to help them fertilize their plantations.

Sunvado has the following certifications: EU-Organic, USDA-NOP, JAS & FSSC22000. Sunvado has set up an organic certification scheme for their farming suppliers, which gives them access to a premium organic price, making it a win-win for the Ethiopian farmer, investing processor and the final consumer.

I want to congratulate Sunvado Plc.as an anchor investor and for being “a leading agro-processor in Ethiopia”, for achieving a big milestone of exporting the first batch in short time!