Supporting Ethiopia’s pathway towards sustainable industrialisation
Title: Sustainable Industrial Clusters (S.I.C.)
Commissioned by: Foreign, Commonwealth and Development Office (FCDO) of the United Kingdom, German Federal Ministry for Economic Cooperation and Development (BMZ)
Lead executing aency: Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH
Overall term: 2021 to 2025
In 2019, Ethiopia embarked on an ambitious path towards becoming a middle-income country by 2030. A key aspect of its industrialisation agenda is the establishment of industrial parks (IPs), which aims to attract foreign direct investment (FDI), increase exports, create jobs for a young and growing population, and promote the country as a light manufacturing hub. However, several factors hinder sustainable industrial growth in Ethiopia, impeding the creation of decent jobs and compliance with social and environmental standards. The main constraints are summarised under the ‘5Cs’ below:
- Capital is lacking for infrastructure investments and certification costs.
- Capacity is required to implement customer-focused services by training the relevant technical skills.
- Coordination is lacking in the cooperation between the government, administrative bodies, regional authorities and IP actors.
- Compliance is insufficient because monitoring and reporting systems are underdeveloped.
- Culture of industrial working practices is often lacking among workers in IPs.
Decent jobs and sustainable growth of Ethiopia’s manufacturing sector are being promoted.
Although the project does not limit itself to the textile and garment sector, it will have a certain focus in this industry given its job creation potential. Since more than 90 per cent of the workforce are female, the project explicitly addresses women’s needs and rights and thereby contributes to women empowerment. Activities under S.I.C. aim to realise the following five outputs:
- Improved worker support;
- Improved IP management;
- Improved environmental sustainability in IPs;
- Improved sustainability frameworks and
- Strengthened linkages between locally based businesses and IPs.
Last update: Oktober 2021