A report released by Ministry of Industry (MoI) on Tuesday, April 29, 2014 revealed Ethiopia has failed to meet its export revenue target for the manufacturing industry, Fortune reported.
Ethiopia targeted to collect revenue of US$ 713.4 Million from the export of manufacturing products for the current fiscal year. Nonetheless, the nation has only managed to collect US$ 289.6 Million in the last nine months.
Different sectors of the manufacturing industry has failed to meet the target set for the period. One sector is textile and garment sector. The government planned to collect US$ 219 Million from this sector. However, it has only managed to collect US$ 85 Million, 38.7 percent of the target during the current fiscal year’s nine months.
Food, beverage and pharmaceutical products have also failed to meet their planned targets. This sectors brought in only US$ 44.6 Million, while the government aimed for US$ 79.5 Million.
However, there is an increase in these sectors performance when compared to their last year’s performance. There is a 13.1 percent increase in the revenue generated from the export of textile and garment when compared to the 2012/2013 fiscal year. The same is true for the food, beverage and pharmaceutical sector with a 18.1 percent increase the reported period.
By the end of the Growth and Transformation Plan, 2015, the government expects the Leather and leather products sector to generate US$ 500 Million from export. Nonetheless, its current fiscal years performance is only US$ 238.3 Million. MoI attributes the reason for the gaps in export revenue performance to the lack of raw leather and hide inputs for manufacturers.
Another sector that has seen an under-performance is the agro-processing sector. The sector has managed to generate US$ 53.2 Million from export out of the planned US$ 157.2 Million. Not only has this sector seen under-performance, but its revenue has also declined when compared to its performance a year earlier.
Public enterprises are also seeing under-performance. They were anticipated to collect US$ 40 Million. Yet they have only managed to earn US$ 31 Million.
MoI has attributed numerous reasons for failing the set goals. One reason put forward by the Ministry is limitations in production capacity and local companies’ engagement in the service sector. According to the Ministry this has led to the gaps being seen in the export trade of the manufacturing industry.
Inputs supply shortage in quantity as well as their quality is also another limitation, said Mengistu Hilfu, director of Evaluation & Monitoring of Plan & Budget at the Ministry. Other limitations stated by the director were; management problems, capacity limitations, contraband market, lower effectiveness of new investment companies, communication gaps between the Ministry and regional bureaus and reduced investment flow in the country.
Source: Fortune
