Local Investors Take Lead in Ethiopia’s SEZs as Reforms Pay Off

Addis Ababa, March 24, 2026 (ENA) —Domestic investors now account for 58.5% of active investments in Ethiopia’s Special Economic Zones (SEZs), signaling a major shift driven by recent policy reforms and targeted incentives, according to the Industrial Parks Development Corporation (IPDC).

Speaking to ENA, Deputy CEO Fitsum Ketema said the remaining share consists of foreign investors and joint ventures.

He emphasized that this marks a significant transformation compared to just five or six years ago, when SEZs were largely dominated by foreign companies.

“Today, a range of incentive schemes has been put in place for domestic investors. By using these opportunities, they are supplying their products to both domestic and export markets,” he said.

 

He added that Ethiopia’s industrial parks have now been upgraded into Special Economic Zones, improving their ability to attract investors across multiple sectors.

“We are seeing progress in all indicators. The number of investors is increasing, export earnings are growing, and import substitution is also improving,” he stated.

Fitsum noted that investment has expanded beyond garment and textile, which previously dominated the parks.

“In the past, most investors were engaged in garment. It even seemed as if the parks were only for garment and textile. Now, we have diversified,” he said.

 

According to him, new investments now include agro-processing, product assembly, construction materials, and high-tech industries.

“This diversification is why export earnings are increasing and import substitution is improving,” he added.

He also stressed the need to shift toward higher-value exports.

“The volume of textile exports can be high, but the value is low. We need to increase value and move into high-tech sectors,” he said.

Citing recent developments, Fitsum pointed to solar panel manufacturers operating in the Hawassa Special Economic Zone.

“Companies producing solar panels are exporting products worth millions of dollars every month,” he noted.

He added that export performance is already showing strong growth.

 

“Our exports have grown to more than double compared to last year,” he said, expressing optimism that the trend will continue as more technology-focused companies enter the zones.

On import substitution, Fitsum underscored its strategic importance.

Import substitution reduces dependence on foreign products and helps limit imported inflation, he said.

He added that strengthening local production can help Ethiopia meet domestic demand and reduce vulnerability to global supply disruptions.

Overall, he said the reforms and diversification underway in the SEZs are laying the foundation for sustained industrial growth and stronger economic self-reliance.