BY LAKACHEW ATINAFU
It is worth understanding that the manufacturing industry is the right and healthy sector of the urban economy, along with a simple, efficient public and private service sector. Therefore, the healthy growth of cities should be directly related to the growth of this sector, while it should be an indirect result of the production of the agricultural sector.
In the past 30 years, it was said that the country had a developmental government and an agriculture-led economic policy, but the performance was very weak, it could not be forgotten about securing food, and the limited growth that was recorded was wasted in the over decade of the regime before the reform.
The share of the agriculture and manufacturing sector in the overall economy has decreased, the service sector has increased, and the growth rate of the sectors has increased from in the first decade according to Ministry of Finance (MoF). These days, the government put in place that the manufacturing sector should be reinforced and managed to immerse upon local and foreign investors that the sector is the driving force and frame work of development.
Industrial Quality and Competitiveness’ panel discussion organized by the Ministry of Industry at the Millennium Hall had been conducted recently. The discussion was said to be able to identify the problems in the sector in order to increase the quality of the products of the manufacturing industry sector to be competitive in the international trade.
While presenting a paper on the panel, Tareqegn Bululta, State Minister of Industry insisted that investors need to first understand that the sector should lay foundation and aspire to be internationally competent and envisage customers’ satisfaction. Therefore, it is necessary to work to make the products of the sector quality and competitive. Quality and competitiveness are related to leadership skills and organization, the State Minister said.
Therefore, to qualify the products of the country, he said, it is important to have a mobilization such kind to back the sector. Investors and other stakeholders in the sector, including the State Minister of Trade and Regional Integration, Dilahe Mekonnen, and Addis Ababa University lecturer, Professor Daniel Katau, have been participating in the forum.
The ongoing “Let Ethiopia Produce” Expo 2023 is balanced with the principles of the country’s prosperity due to encouraging export, ensuring competitiveness, keeping quality, creating jobs, and realizing import substitution, high-level governmental officials commended.
Having visited the expo, Prosperity Party’s Vice President Adem Farah on his part told the media that the event was kept by the national standard due to many manufacturers bringing their quality products and promoting them to the rest of the world.
Such expos would bring significant results in creating market linkage, conducive business environment, and attracting new investors from all corners of the manufacturing industry. Ethiopia strives to attract the involvement of anchor companies in its manufacturing industry to realize holistic development and exploit the untapped potential.
Adem Farah further stated that the country has attempted to create a favorable environment for manufacturing investment and helped industries that halted operations to go back to business. “Though Ethiopia has made commendable measures in easing manufacturing challenges, a lot remains to ensure the public’s benefit,” he noted.
Addis Ababa City’s Deputy Mayor, Jantirar Abay, for his part said that the City has been carrying out various activities to address manufacturing constraints though a lot remains. The City Administration has provided shades, amenities, inputs, and market linkage to a large number of investors in the manufacturing industry.
Yet, the sector has a wide gap in terms of being led by skilled human power. Yet, the sector has limitations in terms of nurturing skilled professionals in leadership positions. The return in the manufacturing sector takes time, and the sector demands special intervention to generate adequate benefits.
Some 30,000 individuals have been employed in the garment industry, which is unique. Therefore, the “Let Ethiopia Produce” campaign is a benchmark to solve the manufacturing sector’s problem and ensure quality products, the deputy mayor remarked. Here it is lucrative to fill the lack of foreign currency earnings and the incumbent should foresee diversified options in order to stimulate the sector believed to be a gear shifter endeavor.
The lack of foreign exchange the economy encountered is a headache not only for importers but also for the manufacturing industry. In general, modernizing agriculture and making it efficient; working to produce products that are used as inputs for the manufacturing industry in the country in the first type quality and quantity; investing in the agricultural sector for the benefit of the masses; pouring knowledge ensure the benefit of the masses. But it is not an easy task like buying and selling even in the foreign market.
It is important to understand that although it is not a source of benefit for a few in the short term, it is useful for all in the long run; it is the beginning and foundation of further processes. In the manufacturing industry sector, products are produced that are small in quantity but more valuable by using resources or raw materials that are large in quantity but cheap in price, with knowledge and technology.
It is worth understanding that staying away from the market is a challenge in itself, but staying away from the inputs and raw materials is a relatively bigger challenge. When the income of the masses increases, it is used by the economy for consumption and what is left for savings and investment. The consumption demand of the large farmers and herdsmen, which grows with the income, is the basis for the development of the manufacturing industry.
Even the manufacturing industry startups operating for the domestic market are few and limited to the needs and markets of the city. Although beer, bottled drinking water, food processing, construction materials, manufacturing and other factories are profitable for the time being if they are not connected with the demand and purchasing power of farmers and pastoralists in the wider market, it is difficult to maintain the sustainable growth of the industrial sector, especially the share of the economy.
It is only used by traders and foreign producers, but it is a good example of the needs and market of modern development of the large farmers three decades ago and now. The farmer did not want to use modern equipment, or it was less, they started to use it, produced more products, they used it, so demand grew, but without creating employment opportunities for the people of the city, it was offered to him at a high price.
It means that domestic efficiency, profitability, consumption, savings and investment have been weakened over the years. At the same time, if the demand and capacity to drink beer, use cement, bank loans, buy insurance coverage, etc., does not increase gradually, the further development of these institutions will stop at one place. It will also be difficult to move to the global market. Anywhere, it is possible to win for the long term by using the first opportunities, reducing the challenges, enhancing the competitiveness in the process, especially in the manufacturing sector through experience and mass production.
With the problem of supply of resources, the direction of industrial development, which is aimed at the limited domestic and foreign markets, has to be corrected already because of the main reasons mentioned above. It is also unreasonable for the government to rely only on capital from foreign direct investment to realize the structural change. When the producer’s income increases due to the increase in the production in the agricultural sector, the savings from consumption can be used for the agricultural and manufacturing sector, but in this situation, the government chose the method of foreign direct investment as described above.
Although a country cannot be isolated from the world, it is mandatory to have enough domestic capacity to bear the external influence. It is worth understanding that even in the countries where the manufacturing industry and capitalism were born and developed; it is a system where a few investors and the majority of workers see each other. As the situation is, it is not foolish to expect differences between a few foreign investors and the majority of the country, as long as border crossing companies and foreign investors continue to dominate their country.
THE ETHIOPIAN HERALD FRIDAY 12 MAY 2023
