New Decree to Administer Industrial Parks Emerges

Before its approval the regulation was tabled for consultation forums 25 times

Council of Ministers (CoM) approved a regulation to administer Industrial Parks after drafting for two years with various government institutions and private companies.

The regulation, which was up for consultation 25 times before approval, mainly focuses on defining and shaping institutions’ role in the Industrial Parks.

Ministry of Finance & Economic Cooperation (MoFEC), Ministry of Labour & Social Affairs (MoLSA), Ethiopian Revenue & Customs Authority (ERCA), National Bank of Ethiopia (NBE), Ministry of Industry (MoI), Ministry of Environment (MoE), Forest & Climate Change (FCC) and Tenant’s Association of Hawassa Industrial Park (HIP) took part in the drafting process of the regulation.

“The regulation is a multi-sector regulation whose ownership or drafting credit can not possibly be attributed to a single entity,” said Belachew Mekuria (PhD), deputy commissioner of Ethiopian Investment Commission (EIC).

Initially, the regulation had 140 pages but was later condensed to 20 pages after it underwent several modifications by consultation forums with stakeholders.

The regulation deals with the criteria that are to be fulfilled and the procedures to be followed for designation of Industrial parks. Developers have to apply to the EIC to get a permit presenting documents that show the project creates job opportunities; transfers knowledge, skill, and technology; has a potential to boost export; and contributes to national and regional infrastructure development.

Furthermore, the regulation also provides specific requirements which are to be met by an industrial developer, a body that is engaged in designing, constructing or developing of industrial parks. According to the industrial parks proclamation an operator is a body that maintains and promotes industrial parks and enterprises are companies which possess developed land under the Industrial Parks through sub lease, renting or building a factory.

To be a developer, investors should demonstrate their financial capability and must agree with the government to engage in areas prioritised by the state.

The newly approved regulation entitles the Ethiopian Investment Board as the only body which can designate a specialised industrial park. With ERCA the board can designate an area as a place where goods are landed, handled, manufactured or supplied as input for Industrial Parks.

The regulation recognises about 25 one-stop-shop services. It can give permits, renew, amend, change or replace investment licenses and issue permits for the expansion of investment projects.

For the foreigners that live and work in the parks, the regulation provides detailed requirements that are to be met by them and rules that are to protect their rights.

Even though the regulation is helpful in many instances, it lacks in other areas, according to Eyob Tekalign, an economist by profession and director at Schulze Global Investment, an international private equity firm that operates in Ethiopia.

“The regulation does not give focus to the facilitation of local investors’ participation,” he asserted. “Local investment is as important as foreign direct investment to achieve industrialisation goals.”


Published on Sep 03,2017 [ Vol 18 ,No 906]



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