The Amhara regional State’s dynamic march towards industrialisation

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This article was originally published in the 7th issue (July 2017) of The Ethiopian Messenger, the quarterly magazine of the Embassy of Ethiopia in Brussels.

The rich natural resources and investment incentives of the Amhara Region are transforming the structure of the economy, in a process that is expected to create thousands of local jobs.

A region rich in natural resources

The Amhara region, one of the nine regional states of Ethiopia, is located in north-western Ethiopia and has an estimated total population of 22 million inhabitants. The region has enormous potential both in land and water resources: in addition to its geographical areas of 171,000 km2, Amhara is the source of several major rivers, including Ethiopia’s largest inland body of water, Lake Tana, which is the source of the Blue Nile river, offering opportunities for irrigation development and hydroelectric power generation.

Amhara is one of the most fertile region of the country, with total rainfalls varying from 300 mm to 2,000 mm and rich in natural resources like gold, opal, coal and limestone. The region is further gifted with varied types of topography including plains, gorges, plateaus, hills and mountains, three major agricultural climatic zones (highland, semi- highland and lowland) and has several agro-ecological zones suitable for agricultural activities.

Amhara’s tourism sector is also booming: several of the UNESCO recorded heritages and natural tourism sites of the country are located there, including the Simien Mountain National Park, the famous Lalibela hock-hewn churches, Fasil Castel and the Lake Tana monasteries.

Abundant investment opportunities

Besides the Federal government investment incentives, the Amhara regional state offers additional incentives to promote investment that includes granting land freely to investors, power availabilities and providing investors with the necessary infrastructures for their activities. Furthermore, a regional investors forum supports and resolves the difficulties encountered by investors as they expand their investment activities in the region. Investors should also consider the cheap labour available in the region.

Agriculture, manufacturing, mining, energy, tourism, social sector and infrastructure are major areas of potential investment. The vast unused arable land and sustainable rainfalls, especially in the western corridor of the region, offers major potential for agribusiness investments. The various climate zone with diverse agro- ecological zones are suitable for the production of many types of agricultural products including cereals, pulses, spices, fruits, vegetables, and flowers and other commercial crops. According to several researches, the region is rich in livestock, fishery, horticulture, natural gum and incense, forest and forest products.

In the manufacturing sector, the region possesses enormous potentials in agro-processing industries such as the processing and preserving of grains pulses, fruits and vegetables, meat and milk product, manufacturing of sugar and brewery, the mining sector and hydropower. Recently, investments have been growing in the region, mainly for the expansion of the domestic and international industrial activities.

Kombolcha Industrial Park in the Amhara Region

Initiatives to boost industrialization

The Amhara regional government is working tirelessly to create a conducive environment for business and investment opportunities, exploit the region’s natural resources for economic development and transform the economic structure of the region by fostering industrialization. The main objective of the recent industrial initiatives all aim at creating job opportunities for the youth and address the demand of the people for a fair and shared economic growth the country.

To achieve this objective, the Amhara regional state launched the Abay Industrial Development Share Company, a public-private company established with four billion Birr (160 million Euro) registered capital that will spearhead several mega projects in the Amhara Regional State. Established in line with the country’s Second Growth and Transformation Plan (2015-2020), the company has conducted feasibility studies on several industrial sectors regarding the availability of raw materials and the domestic and export market potential of their products. Based on the results, it was decided that cement, metal, wood and textile factories will be built in the major cities in the region. The first project, a cement plant, is currently being constructed near the town of Dejen, in an area rich in mineral resources used for cement production. The factory will cost 7.5 billion Birr and is expected to produce 5,000 quintals per day and to create 1,690 job opportunities for young people of the region.

A 2-billion Birr metal factory that will create 286 new jobs will also be established in the regional capital city at Bahir Dar, with a production capacity of 300,000 tons. Two wood production factories will be founded in the cities of Debre Tabor and Debre Berhan, creating 350 jobs, and a textile factory will be also established in the historical city at Gondar, where fine cotton abounds. This factory will cost around 2 billion Birr and will create 2,500 jobs.

Last year, the Amhara Regional State experienced protests mainly driven by young people demanding decent jobs and a fair and shared economic development in the region. Factors such as lack of good governance, the absence of industrial developments, the slow expansion of infrastructure and the delaying of federal mega projects like the Megech Irrigation project were identified as the root causes that pushed escalate the protests in major cities in the region. This is why the Amhara regional administration went beyond the federal efforts to mobilize public and private companies, individuals and development associations resources to expand industrial activities, create job opportunities and promote the economic development of the region and the country at large.

Given the Amhara Regional State’s vast natural resources and cheap labour offering ample opportunities for doing business in various agricultural, industrial and manufacture sector, these initiatives are clearly a step in the right direction.

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