On the onset of the regime change in Ethiopia, the new government has taken myriads of expedients to find out solutions for the deep rooted complications of the country in various endeavors.
Learnt from other countries, there are ways to uplift the citizens’ life from the shackle of poverty. One of the many ways, promoting industrialization and enhancing manufacturing take the lead.
Having realized the due significance, the government of Ethiopia has formulated sound policies and strategies that can promote manufacturing and industrialization. To assist the practice, the government has built around 13 industrial parks in different corners of the country.
Besides, three more industrial parks were built in Bure, Yirgalem, and Bulbula. All these efforts have the sole goal that is promoting the manufacturing sector and thereby increasing the country’s income from export trade and side by side, augmenting import substitutions. These efforts will definitely bring a change and help the country achieve its desired goals in which one is becoming one of the middle income countries.
Recently, the Ethiopian Press Agency (EPA) organized a photo exhibition in Dire Dawa, in collaboration with the City Administration, themed ‘About Ethiopia’ coupled with a panel discussion. The objective of the event was to grab attention of concerned entities on the activities of industrial development and opportunities in the country. To this end, pertinent government officials have presented their papers on the panel discussion. One of the presenters was Melaku Alebel, Minister of Industry.
While presenting his findings, The Minister described the country’s potentials, opportunities and related challenges in the manufacturing sector along with viable solutions should be taken by the stakeholders.
Melaku discussed opportunities in the manufacturing industry and the attention that the government has given to such a lucrative sector. He listed some of the country’s untapped resources that can assist the entire sector.
According to him, Ethiopia has the potential to compete in the manufacturing sector. Its geographic location situated nearly in the heart of the globe easily reachable; number of population over 110 million; already built industrial parks; international conventions of which it is one of the signatories; and its well- known airlines make the nation competitive in the world market. Melaku also added that currently, the government is working aggressively to increase the sector’s contribution to the country’s GDP from 6.8 to 17.2 percent.
In addition, The Minister disclosed that it is planned to increase the industrial productivity from the current 50 percent to 85. On his presentation, he described that industrial parks have provided multiple of job opportunities, and created market linkage with farmers. Regarding job opportunities, The Ministry has planned to create over five million jobs in the coming ten years.
It is true that Ethiopia has been adapting and scaling up best practices of other nations that reached score board of success. To illustrate, it has been learning the experience of Malaysia, Singapore, Vietnam, and Japan. Besides, the country is also learning from the mistakes that other countries made not to go in their pipeline.
In order to catalyze the production and productivity of the manufacturing sector, a number of viable measures have been taken. For instance, the movement dubbed ‘Let Ethiopia Produce’ that was launched last year was by taking lesson from the above mentioned countries. The Minister affirmed, “A number of activities have been undertaken to catalyze the manufacturing sector in order to ensure the sustainability of a recently launched ‘Let Ethiopia Produce’ movement.”
Such movement will surely play an important part in order to enhance other economic sectors apart from scaling up the performance of the manufacturing sector, Melaku further noted.
Regarding the national movement ‘Let Ethiopia Produce’, Melaku said that every responsible body has to work hard to find solutions for challenges seen in the manufacturing industry. All stakeholders should help the sector to become more successful. At this time, actions have been made to widen the import substitution and scaling up the export performance. A simple illustration is that there are local manufacturers that are engaged in producing military and student uniforms.
Likewise, Melaku confirmed that the ‘Let Ethiopia Produce’ movement is not a short term movement. Rather, it continues yearly with the objective of improving the productivity of the manufacturing industry.
Furthermore, Melaku noted that if the goal is to improve the productivity of the manufacturing industry, it is possible and mandatory to create viable conditions for ease of doing business, make local products competitive and conduct problem solving researches, among other practical interventions.
As to the Minister, though the manufacturing industry has a potential to generate nine billion USD, currently it is making only around 400 million USD per annum. As the sector should come up with the down pressing crisis, The Ministry is working to exploit the sector’s full potential. The manufacturing industry has now received due attention and priority as the government has well recognized its possible potentials in bolstering the country’s endeavor to realize economic growth.
By the same token, while conducting the discussion forum as a chair person, Finance Minister Ahemed Shede has reflected on major issues regarding the manufacturing sector. He said that the private sector in Ethiopia has contributed its share in the country’s fast- growing economy. The sector has become the major employer. In addition, the government is very eager and motivated to boost the manufacturing industry. Ahmed added that the government appreciates the role and contributions of the local investors in the manufacturing sector.
As to the Finance Minister, the government and local investors are working in unison in the manufacturing industry. These two stakeholders are playing their respective vital roles. He further noted that the sector needs active participation from the local investors. On the other hand, the government is responsible to facilitate a favorable business environment for the investors. The government should respond to the inquiries of the availability of land and other amenities of the investors.
Moreover, apart from creating conducive business environments for the investors, the Finance Minister disclosed that the government is supporting local investors with finance. The government of Ethiopia is ready to provide ample finance support for local businesses in the manufacturing sector.
Besides, the Development Bank of Ethiopia has provided a significant amount of loans for local businesses that include government firms. The private sector is also among the beneficiaries from the portion of the loan. Ahmed said, “The government is exerting its utmost effort to expand infrastructure, ensure the rule of law, and increase foreign currency supply. Efforts are also being made to alleviate bureaucratic hurdles in the provision of public services.”
It is important to remember that local investors play their roles to promote and uplift the manufacturing sector. Albeit, it does not mean that the sector needs only local capacity. Both local and foreign investors are important for the economic growth of the nation. Both local and foreign investors have acted jointly and registered tangible success in multiple industrial parks. “Our financial and technical capabilities are limited and we will continue to support both to work together,” Ahmed pledged.
The government also encourages the participation of foreign companies which have capital, technology and expertise, Ahmed remarked.
On the panel discussion, investors have participated and raised questions regarding the shortage of foreign exchange. The Finance Minister reacted that in order to address the question of shortage of foreign exchange; local manufacturing industries should be promoted and developed. The government is working on selected sectors that should get foreign exchange instantly. For local investors, Ahmed noted, the government has permitted that they can use foreign exchange they generate from their businesses.
Supporting the idea raised by the Finance Minister, Melaku, Minister of Industry, concluded that it is essential to promote and increase the nation’s productivity as it is underway in other countries. In the case of Ethiopia, the problem is related not with the policy issuance, rather with the implementation. On the other hand, investors must work on fair management of human resource for the fact that most investors hire their own family or relatives rather than professionals up on completion of factory construction, Melaku stressed.
To conclude, Ethiopia needs to increase its export rate so as to resist economic pressures. The best way, in this regard, will be promoting the country’s manufacturing industry. With various incentives, Ethiopia tries to attract investors to do business in the country. This will pay back in the coming years. Thus, the government and responsible bodies should work hand in glove to make the manufacturing sector more favorable for both the local and foreign investors, it was underscored.
BY DANIEL ALEMAYEHU
THE ETHIOPIAN HERALD WEDNESDAY 1 JUNE 2022
