Adama (Nazareth) Chamber of Commerce

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 ADAMA, the Capital city of Oromiya  [top]                                                             

ADAMA - located a mere 99 kilometers from Addis Ababa, the capital city of Ethiopia is one of the fastest growing urban centers in the Country. Adama is the main administrative, commercial and industrial town of East Shoa Zone/ district, a region endowed with rich soil, abundant water resources and unsurpassed panorama. Viewed from every possible perspective, the town and its environs are the epicenter of a vibrant economy. The largest artificial lake in Ethiopia, the biggest hydroelectric power stations, the best tended national park, huge Agro- industry, magnificent catering facilities, to name a few, place Adama in the van of overall progress in the Region.

The Railway linking Addis Ababa and Djibouti Republic on the Red Sea as well as the motorway from the capital to the port of Assab pass through Adama. The great African Rift Valley almost literally dissects the district while the River Awash meanders through it on the longest leg of its course.

All these natural and man-made attributes make Adama and its surroundings a potent base for investment in several sectors.

 Investment Opportunities   [top]                                                                               

ADAMA: – The Capital City of Oromiya Region may be accurately described as the luckiest of those lucky areas that are endowed with the requisite infrastructural resources bases for development. Part of the region’s most fertile black soil area lies within its demarcated boundary; its lowland portion is virtually virgin soil; the mighty Awash River meanders on the longest stretch of its course through this district. That Adama, the main town, should be so strategically placed on the major road and rail trade routes to the red sea ports Djibouti which is an additional and advantageous blessing.

Over the last few decades, this district has witnessed dramatic economic, social and ecological changes. Formerly semiarid, malaria, infested areas have been transformed into highly productive and huge state farm yielding sugar cane, horticultural products, oilseeds and pulses, cereals, spices, and of late, flowers.

The Awash River which had flow for centuries without rendering anything of economic value has been harnessed to provide electric power for many industries in and outside the district as well as water or irrigation. The giant Koka hydroelectric power station and the Awash I, Awash II and Awash III power, all located in this district, are also offshoots of this rich resources base.

Range development is now a major undertaking in the district; an improved and modern system of breeding of livestock for meat and dairy products is a priority project.

Geographically the district is bounded by some of the most prosperous regions and districts in Ethiopia. Arssi and Bale Zones to its South are rich in Agriculture and boasts a vast livestock population. To its east lies Harrar Zone, celebrated for its leading position in fruits and vegetables as well as its coffee and livestock. Again to its south lies the famous Lake District with vast potential for the development of the tourism and catering industries. The resource base here for fishery development is encouraging while its pasture lands have proved to be adequate for improved livestock production.

Processing industries have been mushrooming in the East shoa Zone for quite some time. Of the large industries the three sugar factories at the Wonji, Metahara and Shoa plantations and the adjoining paper and pulp plant, Nazareth Garment Factory, the Ethiopian and Modjo tannery and Ethio – Japan Nailen Textile S.c. deserve mention. A factory for canning of fruits and vegetables and a tractor assembly factory are also the major ones.

Adama is for all practical, purposes, an in land transit port, an artery for the flow of Ethiopian export commodities emanating from, mainly, the Administrative Zones of Arissi, Bale and Sidamo.

In addition to the upper mention advantage, currently as strategy to promote and attract investor, the Government (Adama Administration office) allocated 7.5 k.m areas as Industrial Zone with all infrastructures.

In spite of these thriving activities and definitely because of them a great deal yet remains to be done for full utilization of the overall wealth of the zone/ district.

The prospects are bright, the scenario conducive and government backstopping assistance assured for further investment in the zone/district, particularly in the agro industry sector. The Adama Chamber of Commerce and Sectorial Associations (ACCSA) is dedicated to assist all interested parties in every possible way.

 Population   [top]                                                                                                          

According to CSA, 2003 Adama is the largest populated city in Oromia Region and the third largest populated city in the country following Addis Ababa and Dredawa. It has currently a population of 208,116 at average of 4.7% annual growth rate. Since Adama is the capital city of Oromiya Regional state which is the largest populated Region in the country and located in central part of the country, currently it characterized by its annual fast growth rate for it has been a busy trade center for years.

 Business Structure   [top]                                                                                          

Currently, the total number of business in the town is nearly estimated from 9,500 -11,000. These are included formed, informal and non-formal Business sectors, which is manly characterized by micro & small Enterprise. There are number of enterprises which are Micro Business Association organized & licensed by Adama Micro & Small Enterprise Development Agency, recently. Mostly, these Associations are engaged in different sectors such as Construction, Metal Work, Woodwork, Tailoring, and so on.

In addition to this, according to the Adama Town Trade and Transport office data 2003, the total number of licensed formal enterprises in Adama is closed to 6,000. The detail, are shown below.
 

Licensed (formal) businesses (enterprises) in Adama, June2003

According to this data, the most dominated licensed businesses in Adama are Retialers and Service Rendered Enterprises for it accounts 58.1 % and 21.2 % respectively. Next to these, Wholesalers and Manufacturing industries are accounts for 14.6% and 4.4% respectively. Most privately owned Manufactorying industries are Micro, Small and medium in size which are dominated by Flour Mills, Edible Oil Factory, Garage & Industrial Machinery Workshop, Biscuit Factory, Soap factory and so on.

In addition to this, Adama being in the catchments of Awash River basin has rounded by mostly sugar factories established 40 years ago namely Wonji and Matharara Sugar Factory. There is also the only Tractor Assembly Factory found by Russian Federation, Soap Factories, and Flour and Food Processing Factories. Presently, the city Administration has prepared Industrial Zone with all infrastructures to facilitate investment of industrialization.  

 Major constraints to the development of businesses  [top]                              

The economic activity of Adama is currently at the fastest growth. The major reason for this is the increased importance of the town as the capital city of Oromiya and for it has the following strategic location. It is found

• At only 99km far from Addis Ababa.

• Lying on the Djibouti –Addis Ababa Rail way line

• At the major trunk road traffic routes, truck & buses from the eastern parts of the country (Dire Dawa, Gijiga, Harrar), Southern parts (Robe, Shashemane and Awash) and south east parts which are known for they have a number of mechanized Agricultural Enterprises ( Arissi, and Bale) of the country.

• The Road is relatively comfortable to drive on for it has considerable tourist potential as get way to the Rift Valley, the Awash National Park, Sodere Resort Center, and Ethiopians Famous Resort Lakes, Hot Springs and Sofomor Hall etc.

Moreover, it attracts a lot of people from different parts of the Region for a large constructional activities done by Individuals (Private Enterprises), Contractors and Regional & Federal Government, like asphalt, setting up now different building used for office, business activities, apartment & house and so on.

Apart from these opportunities, Adama Business Communities have the following major constraints as chamber identify through Need-Assessments conducted June 2004. These are the following.

• Lack of control on expansion of illegal (unlicensed) businesses;

• Erratic /frequent disruption in Electric, Telephone, and Water Supply/ services and no prompt reply during break down as well as providers require high service fee.

• Bureaucratic procedures in government officers, and particularly, lack of quick and efficient service (especially, at Inland Revenue Authority and in Municipality.)

• Shortage of, and in some cases complete lack of raw materials and high cost.

• Lack of market for products.

• Lack of regular meeting and discussion about the problems of the Business Communities (no experience sharing forums), lack of training in managing accounts and business experience like feasibility study etc.

• Lack of awareness among the business community about their rights and responsibilities as a Tax Payers.

• Lack of knowledge to keep record about their business transaction to use for tax purpose & for further analysis to determining the physical condition of Business.

• Lack of Managerial skill to run their business in modern way to defend the challenges.

• Shortage of working capital and unfavorable bank loan condition (like, high bank interest rate, asking unfair collateral, etc)

• Shortage of production to satisfy market needs & preferences.

• Lack of skill to prepare Business plan.

• Over taxation by Inland Revenue office & Municipality.

• Non-transparent way of tax assessment or unclear procedures of collection from the Inland Revenue and lack of proper accountability system for service rendered by municipality.

• Unfair competition from cheap imports, aid and grants (edible oil, wheat flour); illegal trades and government supported micro business association.

• Lack of Business information for those engaged in foreign trade (Import and export.)

• Lack of priorities to licensed one or distinguished between legal and illegal licensed traders rather than focusing on the enterprises supplies less priced material Performa invoice while the Government office was buying.

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