Ethiopia, with its aspirations to transform its emerging economy from agriculture to export industry, has prepared Growth and Transformation Plans (GTPI and II) and been implementing several strategies for the realization. It has completed the implementation of GTPI with considerable achievements in the year 2015 and two years passed since it started implementing GTPII.
Meanwhile, if transforming the economy from agriculture to export led industry is inevitable, the manufacturing sector would be the priority area that needs due attention and the Nation has been investing a lot for the development of this sector over the past decade. Infrastructural development activities have been the major issues that the government was and still is dealing with. The construction of roads, railways, hydropower dams, telecom infrastructures and industrial parks has been the most significant homework that the Country handled well.
As a result, many local and foreign manufacturing companies have been able to engage in the sector and are already in production. Even though some challenges are still on the road, the stride seems promising.
Speaking on a recent press conference, Samuel Halala Director General at the Chemical and Construction Inputs Industry Development Institute, the industrial strategy that the nation is implementing considered the private sector as the gear of the manufacturing industry.
As a result, both the metal and engineering and chemical sectors have shown remarkable improvement in terms of production mix, capacity and quality. The chemical sector has registered significant growth from producing basic products to export standard construction and agricultural inputs, he said.
For instance, "our cement industries productivity has been rapidly increasing and enabled the Nation to jump from an importer to exporter. Huge cement factories are built by local and foreign investors".
According to Workneh Delelegn, Director General at the Ethiopian Metal Industry Development Institute, the Nation has been able to produce worth 30 billion Birr products from the industrial sector this year only.
He said that the currently Nation is largely engaged in housing and other construction activities. The construction sector has been gaining huge support from the manufacturing industries particularly in terms of metal and cement products supply.
Currently the basic metal and steel products are covering the demands of the construction sector by 75 percent. He said industries have been producing close to 3.9 million tons of metal and steel products and this is while the metal mining sector is still on preparatory level.
A system for direct supply of products for housing projects has been established, noted Workneh.
"But this doesn’t mean that it has made a significant impact on the forex crisis that the country is suffering from. Even though there is an increment on the total production rate, the industries capacity of productivity has reduced by 25 percent due to the small amount of foreign exchange earnings," he noted.
On the other hand, supplying inputs could be another challenge that the Nation should primarily deal with. Industries that used to produce close to 100,000 tons, now have grown to produce one million tons.
Speaking of engineering products, Workneh said that automotive industries are doing assembly of machineries from simple cars to trains including maintenance and production of harness for airplanes. Mining machineries like crashers are also being manufactured in the country. "This would solve the challenges that we have been facing to fully engage in the mining sector," he stressed.
In terms of supporting the agriculture sector two industries are playing crucial role engaged in assembly tasks. This is an area that should be scaled up and it needs the involvement of new investment and companies.
Meanwhile, he noted even though the automotive industries have shown increment in number and competency, leading them from assembly to manufacturing is the basic step that the Nation will be taking in the near future.
According to Samuel, the chemical inputs sector wax and ink products as well as paper and pulp products are being covered by local industries. Some basic chemical like sulfuric, phosphoric and chlore alkali and petrochemicals industries and products are still on preparatory level because the nation’s industrial status is still on an emerging stage.
"However, we are laying the base for chemicals and fertilizer products. For instance, we have built a capacity that could almost cover hundred percent oil products supply for industrial machineries and wheels with local level," he noted.
Meanwhile, the manufacturing sector which enjoys due attention by the government still needs more effort to utilize the nation’s abundant resources and it requires more advanced technologies. Workneh said several stakeholders and companies must be integrated.
Samuel for his part said it was indicated on the export strategy of Ethiopia that the industry is supposed to be export oriented. This calls for high capacity of market competency. As a result industries must focus not only on exporting their produces but also being competitive in the global market by improving their quality, according to him.