Ethiopia is naturally preferable to manufacturing industry. The fact that the nation is endowed with diversified natural resources, young-aged skilled manpower, huge market potential and strategic location for foreign markets make things niche for the sector.
Steady and sustainable economic growth, stable socio-economic environment, abundant natural resource reserve and conducive weather condition, availability of abundant young and trainable labor force, excellent market access to international markets like African Growth and Opportunity Act (AGOA), Common Market for Eastern and Southern Africa (COMESA), the European Union (EU) and sub-Saharan African etc…, fast growing infrastructure including the newly built Addis-Djibouti electric-powered railway and extensive road networks connecting national and regional markets are among the convenient conditions that make Ethiopia preferable.
Besides, the country has been showing its firm commitment to boost the sector by building over 12 huge industrial parks budgeting billions of dollars. These well-furnished industrial parks are open to any interested investor, both local and foreign. However, according to sources, sector’s contribution to the economy remains at about 14 per cent, far below the average for sub – Saharan African countries. The figure is far from average for a nation envisaging economic transformation from agriculture to industry.
Far beyond that, though showing steady growth in creating job opportunities, the sector still fails to meet expectations and targeted goals. The sector is dominated by small firms and resources-based industries, low value and low-technology products, with its export orientation having been low and stagnant.
Thus, the country has to nurture the sector to comer out of the marginal role it is playing so far. To this end, massive involvement of private investors in manufacturing industry will undoubtedly turn the sector into an engine for national economic growth. However, it was frequently reported that the private sector’s interest mostly confines to the service sector.
From the investors side, as well, complaints of inconvenience of policy frameworks, tedious bureaucracy, problems with affordable loan supply and same have been mentioned. They recommend the government to employ more advanced incentives for the manufacturing industry than other sectors. If the county is to attain its vision of entering middle income status by 2025, then it needs to curb the aforementioned bottlenecks, and invest largely in the industrial sector.
Stretching investor friendly institutions and industrial policy, providing well studied investment incentives, implementing an investor friendly taxation, realizing amenity in the service sector are among the exigent measures needed by the government. It is obvious that engaging in the manufacturing industry sector may not be as easy as taking part in the service sector.
However, realizing conducive atmosphere in the sector also seeks unreserved participation of private investors. It would be more realistic and convincing to tip the challenges faced to concerned bodies from first hand witnesses. Nonetheless, it is the homework of both the government and the private sector to mobilize their resources and utilize the country’s potential to foster the industry sector and ensure the country’s sustainable development.
The Ethiopian Herald, December 19/2018
