Al Tafileh Industrial Zone in southern Jordan is becoming more attractive for investors because the government has introduced a package of support measures. These incentives aim to bring more investment, especially to areas with high unemployment and low development. The main support includes lower land prices, help with energy and labor costs, and tax discounts. The goal is to make Tafileh a competitive, export-focused industrial hub.

One key incentive is the reduction of land prices from 10 to 5 dinars per square meter. This is the second time prices were lowered in a few months. It shows the government is serious about lowering costs for new businesses. As a result, more investors—especially from outside Jordan—are now considering Tafileh, Karak, and Ma’an as new places to set up factories.

However, high transportation costs remain a major challenge. To solve this, the government will pay the full electricity cost for new factories for the first three years. After that, there will be gradual discounts over the next ten years. Energy is a major cost for factories, so this support helps reduce the burden and encourages investment.

The government will also support labor costs by covering 50 per cent of the minimum wage for five years. This makes hiring workers cheaper than in many neighboring countries. In addition, companies will receive a 50 per cent discount on cargo handling fees at Aqaba Port. This helps factories in Tafileh export their products more easily and cheaply to international markets.

Tax incentives are another benefit. Companies in the industrial zone will only pay 5 per cent income tax, compared to 20 per cent in other areas. Also, Jordan’s trade agreements allow products made in Jordan to enter many countries without customs duties. This makes exports even more attractive for investors.

Despite all these efforts, Al-Tafileh Industrial Zone is still underused. Only 10 per cent of the 280-dunum area is developed. Right now, there are just 7 operating factories employing 127 workers. Three more factories are under preparation, and other projects are still not active. This situation raises a question: what is missing to make real progress?

In 2024, Jordan received $1.637 billion in foreign direct investment, which is 3.1 per cent of the country's GDP. This number is still low compared to Jordan’s full potential. To attract more investment to the south, two things are needed. First, better communication with investors to identify what projects match local strengths. Second, strong feasibility studies that clearly show job numbers, costs, expected profits, and other key project details.

Today, the main challenge is not a lack of support or infrastructure—it’s building the connection between available incentives and actual projects. The government has provided strong support in all key areas, but now it’s time to direct investment into high-value industries focused on exports. That’s the only way to turn Al-Tafileh Industrial Zone into a real success story, not just an idea on paper.

Raad Mahmoud Al-Tal is head of Economics Department – the University of Jordan – [email protected]