Industrial Park Bill Goes to House After it Gets Approval from Council of Ministers

Ethiopia is soon to a have its first proclamation on Industrial parks as the draft of the proclamation was sent to the House of Peoples Representatives after it was reviewed by the investment board and Council of Ministers.

This was disclosed during the Ethiopian Investment Commission’s (EIC) six-month performance report by Fistum Arega, Director general of EIC.

This new proclamation is meant to encourage private investors to engage in the development of Industry parks, Fistum told Fortune. This is different from the existing industrial zones as it will include different industrial zones within it such as textiles, garment, and shoe factories.

The proclamation will directly acknowledge the three industrial zones-Eastern Industrial Zone, Bole Lemi and Gorge Shoe Industrial Zone as industrial Parks. The former two industrial zones are owned by the government while George is owned by a company from Taiwan of the same name.

In addition, two more industrial parks are in process of being added to the list. One is to be established in collaboration with the government and Ayka Addis, a Turkish garment factory, and the other by a Chinese company, both are expected to be opened in Addis Abeba. There are three ways industrial parks can be established such as by government alone, private investors or by both.

In relation to development of industrial parks by the government, a corporation called Industrial Parks Development Corporation was reestablished in 2014 to manage parks. As far as new entrants to develop industrial parks are concerned, the commission will begin issuing licenses to develop industrial parks and it will be given to developers subsequent to the investment board chaired by the prime minister giving authorization.

At minimum level, any developer, to get the license, has to sell 100pc of their output to foreign market, Getahun Negash, corporate communication director of the commission, told Fortune.

According to this draft proclamation, one stop service will be available within the parks. For instance, manufactures within one industrial park will have the leverage to sell and buy their products amongst themselves with tax exemption.

Again, facilitating importation of different inputs for manufacturers within the parks, the proclamation will allow those engaged in it to receive what they need at their door steps, added Fistum. Moreover, tax incentives for industrial park developers will be given for investors; for parks in Addis Abeba and within 45Km radius will be given a 10-year tax hiatus while other parks beyond 45Km will have 15-year tax incentives. In addition, manufacturers within the industrial parks will have more tax incentives than those outside, in line with this textile and leather industrialist will get more.

The government has a plan to develop industrial parks in Dire Dawa, Hawassa, Mekelle and Kombolcha, on total of 5,130ha of land. The feasibility study for the park in Dire Dawa has already been concluded, said Getahun.

The draft proclamation is expected to be passed by the parliament in March 2015, after the house session from its one month brake.

During the press conference the of six-month performance report, it was also disclosed that a new decision has been made that will allow investors who are in the production of flour, corrugated iron proof and nail and for those who process coffee, oil seeds and cereals, at factory level bring capital goods with tax exemption. Three billion Br tax exemptions have been put in place during the past half fiscal year.

To encourage the involvement of foreign investors, processing ethanol from byproducts was made open for them, reads the press brief by the commission. During the past six months, 2,000 investors from 42 countries have knocked EIC’s door. The commission has managed to give 200 new and 53 expansion investment licenses that have 21 billion Br capital.


Published on February 16, 2015 [ Vol 15 ,No 772]



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