City on the move: Debre Berhan, Ethiopia

Approximately 120km northeast of the capital Addis Ababa, the city of Debre Berhan is establishing itself as an alluring investment destination. Thanks to infrastructure upgrades over the last decade it now only takes two hours to travel to Debre Berhan from Addis Ababa. Bolstered by economic incentives as part of the Ethiopian Investment Commission’s industrial park strategy, Debre Berhan has seen an influx of investors (both local and foreign) since the 1,100-hectare industrial park was inaugurated in 2019. This specific industrial park focuses on agro-processing as its cluster specialisation.

Bethelhem Dejene, CEO and co-founder of Zafree Papers, chose Debre Berhan as the location for her wood-free paper pulp business. The construction of the company’s pulp processing plant is currently underway.

“One of the reasons I chose Debre Berhan when looking for land, was because it was almost impossible to procure land in Addis. The bureaucracy in Debre Berhan was very low – it was a lot simpler,” she says. The proximity to Addis was a factor, but more importantly, Debre Berhan is close to Zafree’s potential clients and suppliers (paper manufacturing plants and agro-waste smallholder farms).

The city administration has reportedly identified 74 potential investment areas that include agro-processing and dairy processing. According to local newspaper, the Ethiopian Herald, in the just-concluded fiscal year, the Debre Birhan Investment and Industry Bureau issued 130 investment licences, of which more than 86 investors took the land allotted to them.

The incentives offered in the industrial park makes it worthwhile for both local and international investors, says Bethelhem.

“Since I am in agro-processing I receive tax exemption and all machinery that I need to import is done duty free,” she says.

According to the Ethiopian Investment Commission, industrial park enterprises can receive income tax exemption for up to six years (depending on the sector), and an additional two to four years if a company exports 80% of its products. Expatriate employees of industrial park enterprises can get up to five years personal income tax exemption.

Further reading

[June 2020] Food processing company taps into health trend with millet snacks
[May 2020] Interview: Why AgVentures is betting on agrifood tech in Africa
[May 2020] Cassava gets new use in Zambia: hand sanitiser
[January 2020] Profit-making idea: Cassava processing offers unexploited potential
[July 2019] Profit-making idea: Import gluten-free cassava flour from Africa