MekelleแกTelaviv, Nairobi, Pretoria, London, (Tigray Herald)
Ethiopia Revitalizing Manufacturing Sector Through the Let Ethiopia Produce Initiative
Ethiopia has identified its manufacturing sector as a key driver for economic growth, boasting advantages like government support through industrial parks, a large and trainable workforce with competitive wages, affordable energy, strategic geographic location, access to key markets, and abundant raw materials.
However, despite this potential, the sector’s contribution to the GDP has remained low due to challenges such as limited financing, inadequate infrastructure, and skill gaps. To address these structural issues and unlock the country’s manufacturing capabilities, the “Let Ethiopia Produce Initiative” was launched in May 2022.
This national initiative aims to enhance the sector’s contribution to the economy by improving coordination, strengthening monitoring and evaluation, boosting productivity, enhancing quality, increasing exports, and promoting import substitution. It also aligns with Ethiopiaโs broader economic reforms and development plans by facilitating technology and knowledge transfer for sustainable industrial growth.
Since its inception, the “Let Ethiopia Produce Initiative” has demonstrably contributed to increased production and productivity within the manufacturing sector. Previously idle factories have resumed operations, and State Minister of Industry Tarekegn Bululta has highlighted the government’s ongoing measures to further encourage domestic manufacturers.
These efforts, coupled with the Macro Economic Reform implemented in July 2024, have significantly improved the sector’s performance by addressing critical issues like foreign currency exchange and access to finance. Notably, the production capacity of manufacturing industries has increased by over 60 percent following the reform, which effectively tackled the prior major bottleneck of foreign exchange shortages.
Furthermore, the government has prioritized the sector by allocating a significant 76 percent of its loans to private manufacturing industries. This has led to domestic production of goods previously reliant on imports, such as electrical poles, cables, and transformers, now being utilized in major infrastructure projects.
The impact of the initiative is also evident in the sector’s growing contribution to foreign exchange earnings, generating USD 276 million in the past nine months, an 18% increase compared to the same period last year. The government is further incentivizing the sector through tax relief, facilitated loans, and the development of a new investment strategy.
The recent “Let Ethiopia-Addis Ababa Produce Expo” underscored the strong focus on manufacturing, with Addis Ababa’s City Administration actively working to transform the metropolis into a manufacturing hub. This includes providing financial support for capital goods, workspaces, professional training, and resolving infrastructural challenges. The city administration is also investing significantly in modern industrial clusters to expand the capacity of existing industries and attract new companies.
The efforts in Addis Ababa have yielded impressive results, with the city’s manufacturing industry achieving a production capacity of 64 percent, surpassing the national average. The “Let Ethiopia Produce Initiative” has been instrumental in enabling 68 previously idle industries in the city to resume production by resolving long-standing issues. The city administration is committed to reaching the national target of 85 percent production capacity by 2030 and has directed all relevant officials to provide efficient services, including land allocation, to manufacturing firms.
Siket Bank is also positioning itself as a key financial supporter of this industrial resurgence, tailoring its services to empower local manufacturers. Testimonials from companies like Prime Tech CNC Machine Manufacturing highlight the positive impact of the initiative, enabling them to increase production, create jobs, and even expand into international markets, signifying a promising trajectory for Ethiopia’s manufacturing sector.
SourceแกAbyssinia Business Network (ABN)
