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Analysis: Despite low income, Industrial parks workers remain hopeful; IPDC, EIC say conditions are improving, promise more reforms

Hawassa Industrial Park

By Etenesh Abera @EteneshAb 

Addis Abeba, July 12/2021 – Meaza, is a mother of two who came from rural kebeles around Dilla city in the South Nation, Nationalities and Peoples Region(SNNPR). She spent Six month while working in Hawassa’s Industrial Park. She said, detailing how she came to work in the park,’’ I joined the workforce after I heard information from some relatives of mine. I will receive some 1200-1300 ETB per month which is not enough but we heard that the company will provide breakfast and lunch.’’ Since Meaza’s salary does not fulfill her needs and is not enough for her, she lives in a shared room with other colleagues from the park in the vibrant and ever developing city of Hawassa. 

According to Meaza, living with such an insignificant salary is challenging for her and her colleagues. She says that the cost of living in a big city has  become unbearable especially with a two layered economic crisis due to the outbreak of Covid-19 pandemic and the worsening security situation in the country. “I live with two other colleagues of mine. Since our home is far and we walk there, we have to leave the park as early as 5:30 PM,” she continued explaining the reasons behind such difficulties, “If we use any means of transportation our salary will not hold us until the end of the month.” She further added that there are companies who provide free transportation for their employees but not the company she works for.

Meaza, Hawassa Industrial park employee

Meaza remains hopeful about the prospects of her future. She told Addis Standard that she wanted to bring her son to Hawassa and enroll him in school and to continue her studies as well. But she says all that can be done when her monthly income improves.

Embet is a former worker at one of the companies operating a factory in Hawassa Industrial Park. She left university and went back to Hawassa for work where she is a supervisor level employee at the park. She told Addis Standard, “I want to continue my studies in the night program at Hawassa University, “I know salaries are not enough and living in Hawassa  is expensive but my hope is that incentives and overtime pay will be enough to support me.” She explained that working in the industrial park has become an option for those who are hopeless and want to improve their livelihoods.

Solomon is another worker who told Addis Standard that despite the low income and lack of incentives, he remains hopeful about a better future. 

Ethiopian garment workers are the least paid workers in the world according to a report by Quartz Africa. Demands for better pay by employees of all industrial parks in the country are advocated by the IndustriALL Global Union. Last year Ethiopia’s federal government and some industries operating factories inside the country’s industrial parks signed the ACT ( Action, collaboration and Transformation) initiative to solve problems related to the supply chain in the  garment industry and to set a minimum living wage in Ethiopia Industrial Parks.

Hawassa Industrial Park, one of the largest industrial parks in the country, covering 400 hectare employed more than 30,000 workers excluding staff and service providers who reside in the compound according to Belay Hailemichael Ethiopian Investment Commission (EIC) representatives at Hawassa Industrial Park. He said while speaking to Addis Standard, ”Before Covid-19 outbreak we had 35,000 workers. The number dropped to 26,000 after the outbreak and now we are building up our capacity and thankfully we reached 30,000.”

Frustration at the onset of the outbreak coupled road blockages were the reason for the declining number of workers, he explained further. The EIC representative explained that the effects of the pandemic on the global economy resulted in a scarcity of new orders. “As the government issued new directives, we shifted to personal protective equipment (PPE) production. That’s how we were able to maintain the 26,000 employees we had.” Belay added.

According to the EIC representative at Hawassa Industrial Park , there are 24 companies operating in Hawassa Industrial Park. 23 of them are fully operational while one is yet to be fully operational. Speaking about wages, the EIC representative said, “At the beginning of operations, wages were low but through time it improved significantly, ” he continued, “Currently we are in the fifth year of production and from the second year we introduced incentives which encouraged workers in the park.”

Incentives are one form of extra income beside the employee’s main salary. It differs from the main salary which is based on delivery of work for a period of 30 days, as in industrial parks case, incentives are highly dependent on the individual meeting his productivity goals set for him by his supervisors. Consequently, experienced workers who are familiar with the workload are paid better than newcomers. According to Belay, setting a national minimum wage is a hot topic of debate and is only the responsibility of the government. He argued that although incentives minimized workers’ turnover, the need for a national minimum wage policy was still paramount. 

Fitsum Ketema, Branch Manager of Industrial Park Development Corporation (IPDC) at Hawassa, told Addis Standard that efforts are being made to solve problems and challenges facing workers at the park. According to Fitsum, more than 85% of workers at the park are women. 

He explained that resident companies are working with stakeholders to address different problems and challenges faced by their employees. He said, ‘’One of the challenges faced by workers is housing. There is a plan to build 7,500 residential units within the industrial park premises. This will provide a solution for investors and solve workers’ problems.’’ According to him, another joint venture of IPDC and EIC to facilitate credit lines from banks to individual land owners nearby the park to build housing units and rent for the park employees at an affordable price.

About the minimum wage policy, the IPDC branch manager argued that it was the responsibility of the Ministry of Labor and Social Affairs (MoLSA). He added, “Investors are to apply the policy once it’s enacted by the federal government.”

Fitsum remains hopeful about the future and argues that better prospects for Industrial parks workers is a possibility.  He said, ‘’I am hopeful about the future of our industrial parks and its employees’ future prospects, “ he continued, “We are witnessing the emergence of private industrial parks in the country. Our  products are selling in big consumer markets like the US.’’ 

According to Fitsum, providing education opportunities to workers has become a norm for companies in Hawassa’s Industrial Park. He said, ‘’Some companies pause production on Saturdays, as a result a lot of workers pursue higher education on the weekend.” When asked to provide data he said exact figures were not available,  he also argued that higher education will provide workers with better income as it becomes a bargaining chip in salary negotiations. AS  

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