Need for Creation of Industrial Districts in other Urban Centers of Ethiopia

Tsegaye Tegenu, PhD
2024-09-03

When launching the second phase of corridor development projects in Addis Ababa, Prime Minister Abiy Ahmed announced the replication of the successful work in other 38 towns and cities. He emphasized the expectation that these cities and towns would enhance their major transportation routes—such as highways, railways, and riverways—to improve connectivity and optimize land use within urban areas.

The government’s current focus on expanding corridor development projects to other towns and cities may be a misallocation of resources, as these projects do not address the underlying causes of the issues.

While corridor development projects may provide some benefits, they do not address the fundamental issues faced by urban centers that have grown rapidly due to internal migration. In Ethiopia, these urban centers have primarily developed through rural-to-urban migration, with internal migrants constituting almost half of the urban population over the past thirty-five years, the majority of whom have come directly from rural areas.

For a comprehensive analysis of migration-driven urbanization in Ethiopia, I urge you to read the study titled Urbanization in Ethiopia: Study on Growth, Patterns, Functions, and Alternative Policy Strategies. This highly regarded article is one of the most downloaded from the Uppsala University database, averaging 30 downloads per day over the past eight years—an impressive figure compared to other papers in the same field. It offers valuable insights that are crucial for understanding the broader context of urban development in Ethiopia.

According to this study, corridor development projects are unlikely to achieve significant change unless they can match or surpass the pace and intensity of rural-to-urban migration. The effectiveness of these projects in urban centers, particularly those overwhelmed by rapid migration, depends on their ability to keep up with or exceed the speed of migration. Without addressing the underlying causes and timing interventions accurately, corridor development projects may struggle to produce meaningful results.

Rural-urban migration is often driven by urgent economic needs of the rural surplus labor, including the search for jobs, better education, and improved living conditions. The speed at which rural unemployed and underemployed people move to cities and towns overwhelm the capacity of urban areas to absorb new residents. In addition, developing infrastructure, services, and housing takes time—often much more time than it takes for populations to grow. This lag means that by the time a corridor development project is completed, the needs of the population might have already outgrown.

Corridor development projects alone are insufficient to address the challenges posed by rapid rural-to-urban migration. In urban centers formed through internal migration, these projects encounter significant obstacles, including unplanned growth, resource constraints, social inequities, environmental issues, and governance difficulties. These challenges can undermine the viability and effectiveness of such projects.

I suggest reallocating the billions of Birrs designated for corridor development projects toward a strategy focused on developing an industrial economy in migration-driven urban centers. This strategy involves the deliberate establishment and concentration of industries, manufacturing, and related economic activities within these urban areas. It entails creating industrial districts or zones where businesses in related sectors support one another. The goal is to foster job creation, absorb surplus labor, and encourage technological advancement within these specific regions.

Forming industrial districts or zones in urban areas requires careful planning, significant investment, and coordination among various stakeholders. The process involves selecting and preparing a site, developing infrastructure, establishing a supportive legal and regulatory framework, and offering financial incentives to attract businesses. Necessary resources include funding for land acquisition, infrastructure, administrative costs, and incentives, as well as ongoing support services. By addressing these factors with precision and timing, industrial sub-districts can effectively stimulate economic growth, create jobs, and enhance urban and regional development.

Comparing Industrial District Strategy and Corridor Development Projects

When comparing the formation of industrial districts or zones to corridor development projects, several advantages of industrial districts become evident, particularly in terms of targeted economic development and addressing local needs.

• Focused Development: Industrial districts offer targeted economic development and efficient use of resources, whereas corridor projects are broader and do not address local surplus labor needs permanently.
• Economic Stability: Industrial districts can create more stable and diverse local economies with controlled development and job creation, while corridor projects do not offer the same level of localized economic impact.
• Urban Planning: Industrial districts facilitate better urban planning and integration with local communities compared to the more extensive and less controlled nature of corridor projects.
• Incentives and Appeal: Industrial districts can provide focused incentives and attract investment more effectively, whereas corridor projects face challenges in delivering targeted benefits.

In essence, while corridor development projects aim to connect and stimulate economic activities across a broader area, industrial districts provide a more concentrated and strategically planned approach to industrial growth, often leading to more immediate and localized benefits.