Ethiopia’s industrial parks rely on imported inputs for 95 percent of production, underscoring domestic supply chain gaps, a new study finds, Sheger radio reports. The reliance persists despite the government’s ambitious push for export-driven industrialisation.

The research was presented at Capital Hotel in Addis Ababa, where analysts noted that most manufacturers operating within the parks rely heavily on foreign currency for procurement, including packaging materials and raw inputs.

Textiles and garments remain the dominant sectors in the industrial parks. The study found that even though Ethiopia produces cotton domestically, local materials are rarely used. Investors cited inconsistent quality and the absence of internationally standardised raw materials as the main reason for turning to imports.

Labour dynamics emerged as another challenge. Since the establishment of the parks, approximately 350,000 workers have received training, but only around 70,000 remain employed, the study found. Low wages were identified as a key factor in the high turnover rate.

The report also highlighted patterns of foreign partnership within the parks. Foreign investors often form joint ventures with other foreign entities rather than collaborating with local companies. This approach, the study noted, limits knowledge transfer and exposes the parks to operational risks. In the event of security or business disruptions, foreign firms without local ties may exit quickly, affecting overall stability.

Researchers said that the findings reflect broader structural constraints in Ethiopia’s industrialisation model. Despite significant investment in infrastructure and workforce development, the limited integration of domestic suppliers and persistent labour challenges underline the gaps between policy objectives and on-the-ground operations.