Sep 8 , 2024
Investors in industrial parks are faced with increased lease rates for factory sheds overnight after the exchange rate floatation caused the Birr’s value to plunge to less than half its value within days. At the Addis Abeba Investors Forum, they expressed concerns about the rental surge and its implications for the manufacturing sector. They stressed the need for a strong government support system and a more collaborative approach between investors and the government. Industrial Parks Development Corporation (IPDC) officials acknowledged the challenges faced by local investors and pledged to find solutions to mitigate the impact of the new exchange rate policy. The devaluation, part of broader macroeconomic reforms, has led to a doubling of lease rates for sheds within the industrial parks. While the Corporation has formed a committee to address this issue, officials emphasized the importance of maintaining the policy change. IPDC manages 13 industrial parks nationwide, which are home to a combined 147 local and foreign investors. While the parks are experiencing high occupancy rates, the sector faces challenges such as poor export performance, infrastructure gaps, and bureaucratic hurdles. The government has implemented various measures to support the manufacturing sector, including establishing a council of stakeholders and providing incentives for investors in special economic zones. However, investors continue to raise concerns about foreign currency shortages, bank loans, and inconsistent regulations.
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