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Africa’s Expensive, High Stakes Gamble to Lure Chinese Manufacturers

Newly-built industrial parks are popping up across Africa as part of a new effort to pick up some of the estimated 85 million jobs that China is expected to shed as it offshores more of its manufacturing. In April, Senegal unveiled a new $139 million park on the outskirts of Dakar which the government hopes will become a hub for Chinese textile manufacturing. Similarly, dozens of Chinese firms are now operating out of Rwanda’s first ‘Special Economic Zone’ near Kigali as the government tries to jumpstart industrial production.

Although Senegal, Rwanda and other African countries are moving quickly to build out these parks, many of which are mini-cities complete with their own infrastructure, power supply and separate administrative rules from the rest of the country, they’re all playing catch up to Ethiopia.

“African countries are vying for millions of jobs that China is expected to shed. So far Ethiopia is ahead of the pack, with a fledgling shoe and garment-making sector that has made it one of Africa’s rising stars.”  —  Reuters correspondent Nellie Peyton

The trend began in earnest back in 2012 when Chinese footwear manufacturing giant Dongguan Huajian Group set up its first factory at the Oriental Industrial Park 40 kilometers outside of Addis Ababa. Since then the Ethiopian government has doggedly tried to recruit more Chinese investors to set up shop by building even larger, more expansive industrial parks.

The new 300-hectare Hawassa Industrial Park (HIP) in southern Ethiopia is one of the government’s biggest gambles to date. Officials spent $250 million to build this new park in the hope that it will attract foreign manufacturers and create some 200,000 badly-needed jobs for the region’s bulging youth population. So far, 18 companies including apparel giant PVH, the U.S. owner of brands such as Calvin Klein and Tommy Hilfiger, have set up shop in HIP.

The industrial park model has worked extremely well in other places, particularly in Asia, the results in Africa so far have been mixed. In a December 2017 report for The Guardian newspaper, independent journalist William Davison recently traveled to Hawassa to investigate whether the HIP is living up to its promise and how workers are faring in this new economic environment.

William joins Eric & Cobus to discuss his findings from Hawassa and the broader industrial park trend across Africa. Join the discussion. Do you think African governments should be spending so much money to attract Chinese and other foreign manufacturers or is this just a big waste of money? Let us know what you think.

Show Notes:

About William Davison:
William Davison is a freelance journalist based in Addis Ababa, Ethiopia. William has written for a number of leading publications including including Bloomberg, The Guardian and Foreign Policy.

 

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