Ethiopia’s growth model revolves around transitioning from an agrarian to a manufacturing economy. The government is investing over US$1bn in 30 industrial parks by 2025 that it hopes will position it at the forefront of manufacturing in Africa. [79] Foreign direct investment has also been channelled to these parks, and various state-owned businesses have been sold to foreign investors, including Chinese firms. The country is further encouraging foreign investment in its manufacturing sector by offering lower labour costs than current manufacturing hubs such as India, Bangladesh and China. This has already borne fruit in garment manufacturing, with clothing companies including H&M, Guess and J Crew establishing manufacturing centres. The government also seeks to benefit from the technology transfer that foreign businesses bring to industrial parks and has introduced tax relief programmes to attract such investment to the country. In theory, this would help Ethiopian engineers to learn transferable skills, although many industries that process raw materials are largely automated.

Ethiopia has also improved its road and rail infrastructure to match the country’s good flight connectivity, prompting a recent research paper to predict that Ethiopia could become the manufacturing hub of Africa. [80] Underpinning this effort is the administration’s emphasis on manufacturing as a central part of its growth strategy. As a means of incentivising manufacturing and import substitution, attention has been particularly focused on producing the inputs required for industrial processes.