Increasing the attractiveness
of Hawassa Industrial Park

Ethiopia’s major industrial zone

Hawassa Industrial Park is located 270km south of the capital Addis Ababa. It was opened in 2017 and is a centrepiece of Ethiopia’s national industrial development strategy. So far, 32,000 people work here – a number that could rise to 70,000 once the industrial zone has reached full capacity. About 85% of the workers are women. Most of the companies based here are part of the textile industry, including international names like Calvin Klein, H&M and the TAL Group. According to a 2019 World Bank study, the lack of good quality accommodation is a major barrier to the further growth of the industrial zone. The local housing market is overcrowded due to the strong influx of workers and there is hardly any affordable accommodation left with acceptable living conditions. Long commutes, high transport costs and an above-average fluctuation of staff are the result. Companies have set up a bus service from central assembly points to bring employees to work from their homes that are often far away from their workplaces. Many workers have to walk several kilometres to the assembly points and only arrive back home at night. As a result, Hawassa Industrial Park cannot fully develop its potential for employment and export.

Residential units according to ILO standards

Cornerstone Development Group PLC, together with its Ethiopian consortium partner Enyi Construction PLC, wants to build accommodation for 6,500 workers. The planned flats fulfil the standards defined by the International Labour Organisation (ILO). They have electricity, sanitary facilities, hot water and are connected to their own sewage treatment plant. Short commutes should contribute to the satisfaction of employees and allow companies to introduce shift work and increase production.

Improved conditions for employers and employees

The improved housing conditions are expected to make Hawassa more attractive to businesses. Several companies have pledged to create new jobs in the industrial park as soon as the accommodation is ready. 2,000 employees already working at Hawassa can also move to the new housing facilities. In addition, 135 workers are to be hired to run the buildings after their completion. The newly created jobs would have a significant effect on the local labour market. The housing complex will give employees who previously had to travel several kilometres to work and often lived in poor housing a new incentive to work in Hawassa Industrial Park.

The consortium is planning to invest a total of 11.58 million euros. The Facility Investing for Employment grants a subsidy of 5.48 million euros (47%).

The Facility Investing for Employment of KfW Development Bank is part of the Special Initiative "Decent Work for a Just Transition" of the German Federal Ministry for Economic Cooperation and Development (BMZ). With its support, it wants to remove barriers that prevent the creation of new and better jobs in the private sector.