Local and foreign investors engaged in various investment projects in different parts of the country disclosed that the government should ensure peace and stability around investment projects.
In a recent consultative meeting organised by the Ministry of Industry investors engaged in the manufacturing sector voiced their concern over conflicts with local communities. Most of the investors who run factories outside of Addis Ababa in the Oromia Regional State complained that unemployed youth are demanding various illegal payments.
Cement factories managers revealed that they were forced to suspend production repeatedly due to disputes with youth who demand for jobs or payment. A CEO of one of the leading cement factories in the country told The Reporter that his factory was forced to halt production four times in one month due to feud with local community members. The CEO said that the local youth who demand employment request the factory for payment. “We outsourced some of the work for the youth. But we cannot offer the same to all the youth,” the CEO said.
He said that his factory spends more than one million birr to restart the cement manufacturing plant each time it stops production. “In addition to the lost sales revenue we incur cost to warm up the manufacturing plant. The plant should run for 16-17 hours to restart and consumes a large amount of fuel,” he said.
An owner of a gypsum factory told The Reporter that his factory has been denied access to the quarry where they mine industrial inputs for the plant. The investor said that his factory used to save foreign currency by substituting imported gypsum boards. “We have stopped production for the past several months and we are now forced to lay off our employees,” he said.
The investors said that the government has to ensure peace and stability in the country. “The government should control the irregular activities of the youth,” they said.
A senior official at the Ministry of Industry told The Reporter that peace and stability are crucial factors for the manufacturing sector. “The manufacturing sector cannot be productive unless there is stability. However, this problem needs a political solution at a national level,” the official said.
The manufacturing sector registered poor performance last year. The manufacturing sector exported less than 50 percent of the plan set in the export target in the 2017-2018 fiscal year.
According to the annual performance report of the Ministry of Industry, the local manufacturing sector exported industrial goods valued at 487.5 million USD. The export target set by the Ministry of Industry was USD 997.9 million. At the end of the second Growth and Transformation Plan (GTP) in 2020 the manufacturing sector export is expected to generate 3.5 billion dollars and employs 750,000 work force.
Mining projects have also been prone to vandalism. A British mining company, Web Gemstone Mining PLC, last August suspended operations in Ethiopia after its gemstone exploration site in Borena zone, Oromia Regional State was looted by armed men. Web Gemstone was prospecting for emerald in Borena zone since 2015. The illegal armed men looted emerald stones and some mining equipment and they also ransacked the mining camp.
The Reporter recently reported that the Kenticha tantalum mine in the Borena zone was looted by local residents.
Mikael Mengesha, communications affairs director with the Ministry of Mines and Petroleum, told The Reporter that the ministry was working to resolve conflicts engulfing mining projects. “The conflicts in the mining sector need political solution. It is not an administrative issue,” Mikael said.
Prime Minister Abiy Ahmed (PhD) who was asked about the growing concern of investors at a recent press conference stated that investors should work harmoniously with local communities. “The government cannot deploy police at every investment projects. Investors should make sure that their investment projects benefit the local community. Some of the investment projects have not been fair to the local community,” the PM said.
