Following the COVID-19 outbreak, the pandemic is not only impacting the health sector, but its effect on the economy is also massive. It has pushed countries to terminate the movement of people and industries to reduce or stop their production. It has also disturbed the relationship of production sector actors, demand-supply balance, and legal business activities.
Generally, COVID-19 has been causing widespread economic hardships for consumers, businesses and communities across the globe. Its effect also extends to manufacturing industries whose production is dependent on the workforce because the movement of their workforce is restricted.
These are also true for Ethiopia. Hence, the Ministry of Trade and Industry is working to support manufacturing industries as the situation would eventually force them to reduce production and workforce. In addition, the purpose of the support is to enable the manufacturing industries to meet the supply-demand gaps and substitute imports as the pandemic has a severe impact on supply at the global level.
Briefing the Media on the issue recently, Melaku Alebel, Minister of Trade and Industry said that earlier, the government has injected 15 billion birr for banks to stimulate investment and the activities of manufacturing industries. This would help the manufacturers to cover and run their operational costs.
Currently, over 18,800 small and medium manufacturing industries across the country need special support like input, power supply, capital and others. Moreover, due emphasis has also been given to support industries by identifying their critical challenges, particularly in relation to foreign currency and input supply shortage. These would enable them to produce and supply essential products locally, he added.
For instance, banks have allocated 100 million USD to solve the shortage of soap and sanitizer in the domestic market, he said adding the fund is being utilized to supply inputs for local industries to produce these products.
Meanwhile, to solve the shortage of personal protective materials especially surgical masks, the government will support firms as part of its effort to boost their production at the local level. To do so, 81 textile manufacturing industries are identified and seven of them have already commenced their production. “When all of them start production, they have the capacity of producing over 5.1 million masks per day. In addition, the government is also providing support for a new which is going operational in the near future. The company will have a capacity to produce 6000 surgical masks per hour.” he said.
Since mid-March, about 2.7 million litres of ethanol and alcohol inputs that are used for the production of sanitizer have been produced by local industries. So far, over three million litter sanitizer has been produced and distributed locally to meet the
Some 43 soap and detergent manufacturing industries have been enabled to produce in an enhanced capacity in a bid to fight against the pandemic. Therefore, soap and detergent industries produce about 2.3 million Kilograms of soap and 357,951 litres of liquid detergent every day, he stated.
“There are major signs that local manufacturing industries are managing to increase their production capacity. With the government stepping up its support, their capacity has also increased much,” he said.
To increase industries’ production and productivity during this hard time, the government is laying emphasis on various supports as much as possible to reduce the impact of a pandemic. “That is why it is facilitating the supply of inputs for industries that engage in the production of basic commodities,” he added.
“One benefit of the outbreak of COVID-19 is that it is helping us to know our local production capacity to meet demand. Government’s supports will help industries to utilize their potential to the maximum.”
The current global petroleum price reduction is a special occasion for countries like Ethiopia as the country spends over three billion USD annually to import oil. It has also a positive impact to enhance export and reduce the expenditure of manufacturing industries; the minister said adding “it is a special opportunity for us to strengthen national petroleum reserve capacity.”
“To properly utilize the opportunity, the government is performing various activities such as filling reserve depots,” he added.
Wondimu Felatie, Communication and Public Relations Director at the Ministry recently told The Ethiopian Herald
that to solve the shortage of supply, the government is taking various measures such as penalizing illegal traders, supporting Diaspora bank account owners to import, strengthening the linkage of cooperative and unions and strategically reserving basic commodities.
It has also taken strict measures on those who create artificial inflation. Moreover, an agreement has been reached with stakeholders to put in place a healthy supply chain among states and manufacturing industries to boost production by introducing extra shifts.
Government is committed to supporting foreign nationals of Ethiopian origin with a Diaspora bank account, international companies, and trade organizations to engage in the importation of goods. Emergency Coordination Center has also been established to manage the possible crisis at the national level.
Furthermore, to stabilize the market, the government has taken measures ranging from issuing warning letters to the closure of the businesses on 25,068 business entities that involved in illegal trade activities in relation to the outbreak of the coronavirus. The measures have contributed a lot in checking inflation and increasing supply, he added.
Meanwhile the Ministry has revealed that Ethiopia has generated over two billion USD in the past nine months from export. The performance is 78.4 per cent of the plan.
Melaku said that as most of the country’s exports are food items such as coffee and cereal crops, its export performance has not been significantly affected by the COVID-19 pandemic. Following the first case of COVID-19, the prices of essential food items have increased.
The government has also taken measures on 25,068 traders who involved in illegal trade activities in its bid to stabilize the market.
Moreover, to solve the shortage of personal protective materials such as facemasks, the government is encouraging local textile companies to engage in production.
To upgrade the supply of basic goods and control the inflation, the country is importing 650, 000 quintal wheat, 615,000 quintals of sugar and 40 million cooking oil every month, he said.
The Ethiopian Herald April 30/2012
BY TSEGAYE TILAHUN
