February 22, 2022

Industrial projects at standstill in Amhara region over budget constraints 

City: Bahir DarNews

Over 1.4 million hectares of land was given to various projects across eight cities in the region.

Avatar: Abinet Bihonegn
By Abinet Bihonegn

Abinet is Addis Zeybe's correspondent in Bahir Dar.

Industrial projects at standstill in Amhara region over budget constraints 
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Credit: ethiopsports

From the number of multi-purpose industrial projects planned to be executed across Ethiopia’s Amhara Regional State, only less than a quarter of them began operations. 'The delay in operations was caused by a lack of budget for the development of the industrial park projects as the region was left out in budget allocation from the federal government for the second year in a row according to a report by the Amhara Industry Parks  Development Corporation.' Less than 300 companies began production this year, from a total of 1,525 companies in various sectors like textile and garment, and food and beverage. 

Over 1.4 million hectares of land was given to various projects across eight cities in the region. However, it’s now taking more time than planned to get companies up and running, as budgetary support from the federal government has only been coming in for salaries and running costs. Nine of the operational companies started production in the last six months.  

The poor performance had been a cumulative effect of lack of basic infrastructure, primarily of water and electricity lines according to Belisti Worku, communication director at the Corporation. 

Debre Birhan, Kombolcha, and Bahir Dar Industrial Parks located in the region fall under federal jurisdiction, while the country’s first agro-industrial park, Bure Integrated Agro-Industrial Park, is financed by the federal government, and administered by the  regional corporation. Providing infrastructure support to the remaining multi-purpose industrial projects across eight cities in the region falls on the regional government. 

Multi-purpose industrial projects were forced to come to a standstill due to budgetary restrictions as a result of the war in the country. This halted works in the projects related to the provision of roads, sewage, drainage, water reservoirs, including storage sheds, while electric power problems take a lion’s share among infrastructure problems.

“We have had a budget problem in the region to build the necessary infrastructure,” said Belisti. "Both the federal and the regional states have not allocated any money during this year and the previous one as well.”

While the companies are at different levels of construction, over 500 have been delayed in progress due to a lack of power lines.

"This is directly related to the war,” said Belisti. “We’re waiting for the budget to finish construction but the regional government can not address infrastructure issues without federal support, because it’s a huge sum.” 

Markon PLC, one of the companies in Bahir Dar’s industrial area, received 10,000 hectares of land from the regional government two years ago planning to produce eucalyptus oil for local and export markets. The company, which plans to invest 15 million Ethiopian Birr, is one of the thousands held back due to infrastructure difficulties, according to the general manager, Abebe Shiferaw. 

“The electric power and road that connects the sites to the main road are not finished," said Abebe. “We requested assistance from the regional government repeatedly but didn’t get a response so far.”

Two other industrial parks are under development in the region; one is located in Gondar and another in the eastern part of the Regional State. Seven other rural transformation centers are located in the region, delivering raw material for the operation of Bure Integrated Agro-Industrial Park. Three of the centers, located in Amanuel, Chagni, and Dangla, are expected to begin operations in three months.