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Rethinking Ethiopia

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RETHINKING ETHIOPIA With the world’s help, one of Africa’s rising stars is changing perceptions, making progress, and fulfilling its potential, despite tough challenges ETHIOPIA IN FIGURES 9 UNESCO World Heritage Sites, more than any other African nation n times of economic uncertainty, “By 2025, Ethiopia will be Home to around 100 million, 13 months in every year, Inations tend to focus on a middle-income economy Ethiopia has slashed poverty levels according to Ethiopia’s Julian domestic concerns and lose sight of with zero net growth in from 39% in 2004 to be on target for calendar issues of global importance. This carbon emissions” 22.2% by the end of last year. It has 80 ethnic groups that make March, Ethiopia’s Prime Minister, Hailemariam Desalegn, Prime Minister also made major strides towards its up the nation’s population Hailemariam Desalegn, called on Millennium Development Goals, 85 percentage of water the world not to forget his country one of the world’s fastest growing reducing child mortality, rolling out supplied to the Nile River as it faces its worst drought in 50 economies over the past decade primary education, doubling access 200 dialects spoken years, which has put more than 10 and secured significant human to drinking water in just five years, throughout the country million people at risk of famine development gains. According to the and extending its Productive Safety 597 estimated GDP per and could erode the remarkable World Bank, it boasts ‘strong, broad- Net Program to cover eight million capita, in US$, in 2015 (IMF) achievements Ethiopia has made based growth’, expanding by a mean vulnerable citizens. 2,400 elevation of Addis in the last quarter of a century. annual 10.8% from 2004-2014, more Today, Africa’s oldest independent Ababa, in metres above sea level Compared to many of its African than twice the regional average. nation and second most populous 1,104,300 size of Ethiopia’s peers, Ethiopia is a beacon of political Agriculture accounts for the lion’s state needs the support of overseas territory, in square kilometres stability, economic growth, and social share of Ethiopia’s GDP and exports, institutions and investors, not just 3,200,000 approximate age advancement. In 2014, the United and employs three in four locals. in terms of capital but also know- of the oldest human fossil, Nations Industrial Development Now, in line with the government’s how and technology, to ensure it found in Ethiopia Organization (UNIDO) chose it as second Growth and Transformation can consolidate those successes and $1.4 billion the amount one of two nations on the continent, Plan (GTP2), the sector will provide continue to realise its goal to become the UN says Ethiopia will and just three worldwide, for its pilot the means for Ethiopia to transition a Climate-Resistent Green Economy need in aid in 2016 Programme for Country Partnership, to a new, value-added economic tomorrow. in recognition of its commitment to model, based on building its agro- Ethiopia wants to reach middle- to the international community inclusive and sustainable growth. industrial and manufacturing income status by 2025 and will as a reliable partner for trade and Under the leadership of Meles sectors at home to maximise export be in attendance at the World investment, with the potential Zenawi and, since 2012, Prime earnings and boost investment from Economic Forum on Africa 2016 in to achieve greater progress and Minister Desalegn, Ethiopia has been beyond its borders. Rwanda this week to make its case development in the future. PROJECT DIRECTION / EDITORIAL CONTENT: NATHALIE MARTIN-BEA · PHOTOGRAPHY: OSCAR SEGURA Dr Arkebe Okubay, Special Advisor to the Prime Minister Under the Growth Transformation Plan (GTP) the development of Investment Commission will have a department with Chinese speaking recruited and trained 950 workers. They produce high performance Industrial Parks is one of the pillars; Can you expand on this topic? staff. Our website will have a Chinese option and we will open a branch of cycling clothing lines. And again they were able to put to market this We developed a 10 years program in line with Vision 2025. In 10 years Ethiopian Investment Commission in Beijing, Guangzhou or Shanghai. high quality product in 90 days. we want Ethiopia to be the manufacturing hub in Africa and we want to lead in light manufacturing as it fulfills our needs. It’s labor intensive What about the Japanese market? Apart from Hawassa what other parks are in the pipeline? and jobs are critical with our growing population, its export oriented To the Japanese farmers we have offered to build an exclusive industrial The second park will be Dire Dawa. We expect this park will be ready and it makes us address the constraints in foreign exchange. Our target park that meets the Japanese farm standards and requirement, which before September 2016. We have estimated a construction time of nine is an annual 25% growth for the manufacturing sector. In 10 years are different. We would finance it and use Japanese designers. We will months. manufacturing will grow four fold and its share of exports will go from also hire Japanese companies to operate the industrial park so that it Third park will be in Adama, fourth in Kombolcha and fifth in 10% - 20% today to close to 50%. This is the most challenging program becomes easier for the Japanese operators. It’s to that extent that they Mek’ele. We plan to start construction at the end of February. After this because we need to create 2 million manufacturing jobs in 10 years. need a specific environment. Jimma and Bahir Dar with construction expected to start by April/May. Every year we have to create 200,000 jobs. To understand the significance These should be completed by December 2016. $750 million from the of this figure; today the existing workforce in the manufacturing sector Any other specific hub worth mentioning? Eurobond sold last year are being used to finance all the parks. in large and medium size companies is roughly 350,000. This is the only We have plans to build one of the largest pharmaceutical hubs at In Addis, we’re planning to have an industrial park financed by World way to achieve structural transformation. Bishoftu (20-25km from Addis Ababa). We want to attract leading Bank loans. It’s called Bole Ilemi 2 and hopefully will be ready by 2017. During GTP I we have made some substantial progress. When we pharmaceutical companies especially from Germany. Bio for example We have to follow the procedures jointly agreed with The World Bank. started GTP I FDI was close to $1 billion annually. In 2014, FDI inflow is going to invest in biotechnology (seed development) and perhaps they In Kilinto we’re considering of using the park for mainly pharmaceutical reached $1.6 billion. We desperately need FDI for many reasons. It is will expand to pharmaceuticals. We will continue to work with Roche. and also for advance manufacturing including the aviation sector using the best way for our businesses to learn how to market and compete in Also JSK from the UK is interested and we hope Bill Gates through his the leverage of Ethiopian Airlines with manufacturers. the global economy. We have to operate as part of the global value chain. Our industrial parks play a key role providing the required capacity. foundation can assist us bringing the US pharmaceutical industry here. Secondly we have to develop technical and technological skills and our About a dozen anchors will be hosted at Hawassa Industrial Park, our Since there are parks are located outside of Addis Ababa can you expand people can only learn these skills if they are working. And finally we first pilot and specializing only in apparel and textiles, which will be Industrial parks reduce significantly the time to be fully operational for on the infrastructure in place? need management skills. Everything boils down to management skills. fully operational between March and June of this year. an investor. Can you share some success stories from Ethiopia? We now have a railway transportation system in place. It currently takes These will improve quality and productivity and the spillover effect will We have to ensure that the industrial parks provide the best business The best examples are Huajian and Shin Textile. Huajian is very well around 10 hours by train for goods to reach from Djibouti to Addis. be tremendous. environment and serve as one-stop service facilitating customs known, as it was fully operational in less than 90 days. They used Goods don’t need to be inspected by customs and they just move directly In order for this to happen we have to focus on manufacturing clearance, provision of license and certificates and visas. We believe in Eastern Industrial Park and for them it turned out to be a matter of plug to the industrial park where they are inspected. If they are destined for investment. Within the manufacturing sector, we have identified 10 key clustering the industrial parks as proximity benefits one another and and play. In those 90 days they recruited and trained staff and installed export they are sent directly to the port, as there is no tax applied and no sectors to develop. To give you an idea of the level of detail one of the mitigates the environmental impact. machinery. They have a factory in China where they took the Ethiopian reason for customs to be involved. subsectors is light manufacturing and it includes textiles and apparel, staff to be trained. All in only 90 days.
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