Ethiopia has opened its first vehicle manufacturing and assembly factory at a military base and plans to use local labor to produce automobiles for both local consumers and export.

The fast growing East African economy of 94 million people has one of the lowest number of vehicle in the region with just two vehicle for every 1,000 people. According to the country’s Ministry of Transport, there were only 587,400 vehicles on the country’s roads in 2014.

The country has now created an engine and body manufacturing plant — named the Bushoftu Automative Industry (BAI) — at a military base in Mekele, some 480 miles north of the capital Addis Ababa, that is expected to produce 10,000 to 20,000 vehicles per year using local labor.

This is estimated will generate $96 million annually for the government.

“This is a light-duty manufacturing plant. In this factory We can manufacture and assemble pickups, station wagons, single and double cabins, mini-trucks,” Major Metafer Beshawhwured, the assistant general manager at BAI told NTV Uganda.

“In this factory we can manufacture or assemble more than 20 per day in two shits now. If there is more demand we can increase this production,” he added.

The output capacity of the heavy-duty vehicle production factory is 24 vehicles daily. Buses are being assembled according to need assessment.

According to Ethiopian News Agency, the factory had handed over 210 buses to the Addis Ababa city bus enterprise, while it is assembling 350 other buses upon order.

It has also secured a contract from the United Nation to produce “some armored vehicles for its peace keeping mission in Africa”, Lieutenant Amanuel Tsegaye told Ethiopian News Agency.

“As Ethiopia finds itself on the path of fast-tracked economic growth, such industries will be vital to sustain the economic gains being registered,” head of the Ethiopian Power Engineering Industry General Manager  Major Assefa Yohannes said.

“The Mekele engine manufacturing plant will be one of the key production facilities, and we will not end there,” he added.