The government has been exerting maximum effort to transform the nation’s economy from agriculture led into industrial led one. To this end, it has been taking various measures that include homegrown economic reform agenda and a comprehensive macroeconomic reform program that has been launched recently to tackle long-standing economic challenges and transition to a more stable and competitive economy.
According to the recent report of Ministry of Planning and Development, in the last two decades double digit economic growth has been witnessed but regarding attaining transformation, very little achievement is registered. As to economists, agriculture still contributes more than 45% to the nation’s Gross Domestic Product (GDP) followed by service sector which is 40% and the remaining is contributed by the manufacturing industry and other sectors.
Since its power assumption six years ago, the government has emphasized on expansion of industrialization and clearly outlined the goals of economic development in its 10 years perspective development plan.
To evaluate activities and status of the industry sector, the high level Development Partners Group (DPG) Heads of Agencies conducted meeting with the officials of Ministries of Industry and Labor. On the occasion, they discussed vitality of skills Development to supply the labor market, sectorial reform, its sustainability and attaining transformation.
The Ministry of Industry disclosed that the manufacturing sector witnessed a remarkable increase in investment over the past year, signaling strong confidence from both local and foreign investors. Recent data underscores Ethiopia’s significant strides in economic development, with a particular focus on the manufacturing and labor sectors.
At the same time, the DPG Heads of Agencies meeting held at the Ministry of Finance has also learnt that the Technical and Vocational Education Training (TVET) system has successfully trained over 7.8 million individuals in the past two years, with 3.5 million trained in the previous year alone.
The State Minister of Industry, Hassen Mohammed provided an encouraging outlook on Ethiopia’s manufacturing landscape, underscoring the government’s dedication to the “Made in Ethiopia” initiative. A remarkable 40% increase was recorded in the sector’s investment over the past year and ambitious goal set for raising the manufacturing sector’s contribution to the national GDP from 6.8% in 2020 to 17.2% by 2030, it was reported.
The source of the growth, according to Hassan is the “Ethiopia Tamrit”/ “Made in Ethiopia” movement that have been undertaken for the past one and half years reinvigorating the industry sector.
He recalled that the “Made in Ethiopia” movement was launched by Prime Minister Abiy Ahmed (PhD), with the aim of realizing a competitive manufacturing industry by solving the bottlenecks in the sector.
“Made in Ethiopia” movement is a national effort to create a competitive manufacturing industry by solving the multifaceted problems the sector encountered in a sustainable, integrated and comprehensive manner. The movement has been taken as bedrock for the economic development of the country. It is a national effort to create a competitive manufacturing industry by solving the challenges in the sector in a sustainable and comprehensive manner.
He further said that the movement has solved the problems faced in the sector through coordination and achieved great results.
He, therefore, urged stakeholders to work with greater cooperation and efforts by keeping the movement as the main basis of economic growth. The leadership at all levels should work with passion and determination, especially by fighting corruption and corrupt practices in the sector.
Moreover, he noted that solving problems related to policies and implementation through coordination should continue to be a task that cannot be left for tomorrow. Adding value to products, modernizing the procurement system and providing quality products for the domestic and international markets should be given attention.
As mentioned earlier, the manufacturing industry sector was projected to grow from 6.8% in 2020 to 17.2% by 2030, increase its production capacity to 85% from the current 50% target, and increase foreign trade revenue to 9 billion USD from the current 400 million USD.
Some 160 factories which are new and renovated have been operational by the “Made in Ethiopia” movement. Therefore, huge production and productivity is expected as the result of the movement was effective.
In relation to the sector, Hassan said that utilization of energy has increased by 15% showing the ever-increasing demand of the industry sector.
The manufacturing sector reform is supported by the Homegrown Economic Reform Agenda and the Ten Years Perspective Development Plan, which underlines the establishment of industrial clusters, import substitution, and enhanced export promotion.
The State Minister also told the gathering that the import substitution initiative enables the country to save 2.8 billion USD in foreign currency over recent years as well as an increase in domestic market share for manufacturing to between 40% and 50%.
By the same token, Minister of Labor and Skills, Muferihat Kamil emphasized the urgent need for labor market reforms. she noted the necessity to equip Ethiopia’s large youth population with the skills needed to thrive in the evolving job market and underscored the Ministry’s commitment to promoting job creation and industrial peace.
She also highlighted important accomplishments stemming from the Technical and Vocational Education and Training (TVET) system, which has successfully trained over 7.8 million individuals and helped to generate 9.6 million quality jobs in the past three years.
The Minister told the gathering that 57,000 trained and certified Ethiopians secured employment abroad, contributing to the economy. Notably, 345,000 individuals were sent abroad for employment opportunities in the last budget year.
It was also reported that Ethiopia has ascended to 10th place in the global entrepreneurship ranking within just three years, highlighting a progressive entrepreneurial climate.
The meeting concluded with an interactive question-and-answer session that sparked vibrant discussions among participants. Topics included customs efficiency, engagement of the private sector, and the significant role of Artificial Intelligence in training initiatives.
Both Ministers reiterated their commitment to cultivating an environment that supports private sector-driven growth and sustainable economic advancement.
Co-chair of the DPG Secretariat and State Minister of Finance for Economic Cooperation for Ethiopia, Semereta Sewasew, for herself, expressed gratitude to all participants for their insights and reaffirmed the government’s dedication to partnering with stakeholders to promote robust economic growth and development across Ethiopia.
She also noted that the meeting as a journey that needs to scale up underlining the importance of ongoing collaboration remains essential for addressing challenges and unlocking opportunities in the manufacturing and labor sectors.
As to Semereta, the robust reform being executed by the government in recent years has been critical for the surge of the manufacturing sector. The measure enabled the sector to identify new opportunities and tackle emerging challenges. In addition, it serves to maximize the industries’ production amount both qualitatively and quantitatively, enhance their employing capacity and tap the market.
She further commended the reform activities being undertaken by the government of Ethiopia particularly in the economic sector, including the recently launched macroeconomic reform policy that is under implementation brought optimism to investors to produce in their full capacity with no anxiety with regard to securing hard currency in Banks.
For the State Minister, improvements carried out in logistics, power supply and other infrastructural developments have been pivotal to enhance the manufacturers’ production capacity. “Made in Ethiopia”, the national movement has been also instrumental to further mobilizing the manufacturing sector at the national level in recent years.
So, basic manufacturing services have been improving following the reforms undertaken for the past six years, Semerata noted. Accordingly, the sector registers 10.1% annual growth as a result of the reform. Stating that the country is making major reforms in the sector, she urged investors to benefit from such incredible opportunities.
The forum is a good opportunity to identify the opportunities and challenges, she said, adding it aims also to utilizing opportunities and resolving challenges together. Various organizations, including the World Bank, the UN, EU and other development partners participated in the DPG meeting, it was learned.
BY ABEBE WOLDEGIORGIS
THE ETHIOPIAN HERALD FRIDAY 29 NOVEMBER 2024
