Ethiopian Industry Confronts Capacity Gulf
Over the past ten years, the share of
industry to gross domestic product (GDP), as well as the proportion of
manufacturing exports to the national export earning, remained
relatively stable, at around 13pc and 36pc, respectively. By the end of
the Growth & Transformation Plan (GTP), the government is set to
achieve a manufacturing export earnings target of 2.23 billion dollars.
The manufacturing industry export targets of the GTP for the first three years are; 438.2 million dollars, 761.3 million dollars and 1.16 billion dollars, respectively. Against these targets, the actual performance for the first two years has been 207.72 million dollars and 255.4 million dollars, respectively.
Similarly, the manufacturing export performance of the first half of 2012/13 was only 130.8 million dollars, which is even below last year's performance of 137.5 million dollars. All of these figures indicate that manufacturing export performance has attained merely a third of its target over the first half of the plan period.
What is even worse is the fact that only one or two enterprises from each sub-sector account for over 95pc of the manufacturing export earning of the country, indicating that the contribution of the majority of the manufacturing enterprises is meagre. The performance of the sector, in terms of employment generation and sales turnover targets, is no better than that of the export performance.
National industrial policy frameworks and implementation capacities, infrastructure development, institutional capacity and the overall commitment and efforts of the private manufacturing enterprises are considered as key for industrial sector development and structural transformation.
Acknowledging this, the Ethiopian government is creating a business-enabling environment, through developing the required infrastructures and providing generous investment incentives, including; the provision of bank loans at preferential rates and tax holidays.
Asides from infrastructure development, the government has also undertaken various macro-economic reforms that support industrial expansion and structural transformation. At a micro level, international development partners have been providing considerable support, both technical and financial, for the manufacturing enterprises, in improving firm-level productivity and enhancing international competitiveness.
The manufacturing industry export targets of the GTP for the first three years are; 438.2 million dollars, 761.3 million dollars and 1.16 billion dollars, respectively. Against these targets, the actual performance for the first two years has been 207.72 million dollars and 255.4 million dollars, respectively.
Similarly, the manufacturing export performance of the first half of 2012/13 was only 130.8 million dollars, which is even below last year's performance of 137.5 million dollars. All of these figures indicate that manufacturing export performance has attained merely a third of its target over the first half of the plan period.
What is even worse is the fact that only one or two enterprises from each sub-sector account for over 95pc of the manufacturing export earning of the country, indicating that the contribution of the majority of the manufacturing enterprises is meagre. The performance of the sector, in terms of employment generation and sales turnover targets, is no better than that of the export performance.
National industrial policy frameworks and implementation capacities, infrastructure development, institutional capacity and the overall commitment and efforts of the private manufacturing enterprises are considered as key for industrial sector development and structural transformation.
Acknowledging this, the Ethiopian government is creating a business-enabling environment, through developing the required infrastructures and providing generous investment incentives, including; the provision of bank loans at preferential rates and tax holidays.
Asides from infrastructure development, the government has also undertaken various macro-economic reforms that support industrial expansion and structural transformation. At a micro level, international development partners have been providing considerable support, both technical and financial, for the manufacturing enterprises, in improving firm-level productivity and enhancing international competitiveness.
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