Industrial Parks and Manufacturing

How Ethiopia built industrial parks like Hawassa to attract garment makers with cheap labour and power, the early successes, and why exports disappointed.

Ethiopia built industrial parks to create factory jobs.

Hawassa

The Hawassa Industrial Park, opened in 2016, attracted global apparel suppliers.

Advantages

Very low wages.
Cheap hydropower.
Duty-free access to the US under AGOA.

Problems

High turnover: workers quit due to low pay.
Logistics delays through Djibouti.
Foreign exchange shortages.

AGOA loss

The US removed Ethiopia from AGOA in 2022 over the Tigray war, hurting exporters.

Lesson

Cheap labour alone doesn’t guarantee industrial success; skills, logistics and stability matter.

The garment worker

A young woman in Hawassa sews shirts for a global brand, but quits after months because pay barely covers rent.

Thinking low wages alone attract lasting industry

Logistics and stability matter too.

Key takeaways

Ethiopia built industrial parks like Hawassa.
Low wages and cheap power attracted firms.
Turnover and logistics were problems.
Losing AGOA in 2022 hurt exports.