Industrial Parks as Engines for Economic Growth in Ethiopia

If run well, with all industrial park shades rented, the funding industrial park development with FDI loans is beneficial to Ethiopia’s economy. To ensure the success of this policy, the government must attract foreign direct investment by developing special schemes and export-promoting strategies. These could include duty free imports and bank loans for investors constructing and renting new parks. If the policy is unsuccessful, poverty will be exacerbated. Introducing incentives for both foreign and local businesses could foster an environment of cooperative competition. Additionally, steps should be taken to ease the crowding out effects on businesses in priority industries that are outside the parks. For example, by creating a scheme to encourage knowledge flows from priority industry businesses inside the parks to those outside.