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Agro-Industrial Parks to spur economic growth in Ethiopia
March 6, 2017, 4:28 pm

On the occasion of laying the cornerstone for the Baeker Integrated Agro-Industrial Park in Humera, a town in western Tigray State in Ethiopia, Prime Minister Hailemariam Dessalegn said that apart from its importance in creating jobs for the young and supporting the country’s economic transformation, the industrial park would also play a role in helping economic integration with neighboring countries.

The entire agro-industrial project which spans a 1,000-hectare area and is estimated to cost around US$110 million (2.5billionBirr) is set to be completed in three years. The first phase of the project would be initialized on 258-hectare land.

The project on completion would include agro-processing factories capable of utilizing the rich sesame and other agricultural produce cultivated from the surrounding 254,000-hectare farmland. The park is set to export value-added agricultural products to the international market and substitute for imported ones.

As Ethiopia undergoes a massive socio-economic transformation, industrialization of agriculture is expected to be a prime focus. Projects such as the Integrated Agro-Industrial Park (IAIP) in Humera, could transform the agriculture sector. Being an agrarian economy, Ethiopia could benefit from agricultural industrialization as it would allow the country to process its agricultural raw materials and sell processed products on the global market.

The IAIP is a geographic cluster of firms grouped together to share different infrastructure and to exploit the opportunities for joint purchasing, selling, training, providing extension services and other synergies. The business model of the IAIPs promotes efficiency of the commercial food supply chain. It is an end-to-end approach linking production to the market. The government plans to establish agro-processing parks such as the IAIP in Humera within a 100 kilometer radius of input sources and market accesses.

So far, 17 Agro-Industrial Growth Corridors (AIGCs), with agro-industrial potential, were identified across the country. Currently, the feasibility studies conducted for the four pilot IAIPs have been completed. To fully operate the parks, products such as coffee, livestock, cereals, sesame, pulses, honey, fruit and vegetable are identified for processing. In addition, value chain analysis has been done and 1,000 hectares of land have been attributed. The IAIP projects being developed will also incorporate companies engaged in exporting value-added agricultural products to the world market.

The large, medium and light scale agro-processing parks are expected to facilitate the situation for the planned transition to the industry-led economy through accelerating the manufacturing sector, contributing to job creation and import substitution, and strengthening export and innovation.

Apart from domestic companies, farmers and the youth are the epicenter for agricultural commercialization. Upon completion, the agro-industrial parks will represent over $1.5billion (30 billion Birr) in investments, and will create over 400 business opportunities and over 400,000 direct employments.

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