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Thursday 24 June 2021
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Ethiopia: Ethiopia gets World Bank loan to expand industrial zones

The World Bank has approved US$250 million to help the Ethiopian government create new jobs in its industrial sector as part of efforts to boost the local economy, Bank officials said on Thursday.

The Bank’s Board of Directors approved the credit in support of the Government of Ethiopia’s effort to create new jobs and increase competitiveness in the light manufacturing sector.

The plan aims to develop industrial zones and enhance linkages with the local economy.

“Growth of the manufacturing sector creates employment opportunities for the poor,” said Guang Zhe Chen, the World Bank Country Director for Ethiopia.

Ethiopia, currently ranking amongst the world’s fastest growing economies, is struggling to develop a light manufacturing foot-print with agriculture-based industries emerging as its most preferred industrialization plan.

Guang said light manufacturing primarily used unskilled and semi-skilled labour and this was critical especially in enhancing job creation through industrialization.

“This would help contribute to the reduction of extreme poverty and promotion of shared prosperity which are key goals of the World Bank Group,” Guang said in a statement.

The latest credit from the International Development Association (IDA) will support the Competitiveness and Job Creation Project.

The project is designed to establish industrial zones as a platform for catalyzing investment and job creation, with a focus on export-led manufacturing, and tackling cross-cutting constraints for private sector development.

The project will provide large and medium-size firms with new, serviced industrial land and buildings (including water, electricity and transport connections), and with a One-Stop-Shop to reduce the transaction costs of doing business.  

The project will also target small to medium-size enterprises that will act as local suppliers for the light manufacturing sector, as well as sector institutes that will be involved in project implementation and in developing skills and training of workers with requisite skills.

The project will not be confined to the industrial zones currently being developed but is expected to contribute to the strengthening of the government’s larger industrial zones programme and jobs agenda.

It will also as attract new investors to Ethiopia.

“The project will benefit people who will be employed as a direct consequence of creation of new jobs in the targeted zones,” said Asya Akhlaque, the World Bank Task Team Leader for the project.

“The majority of the beneficiaries are expected to be women employed in the garment and shoe industries that initially set up business in the project area.”

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