Ethiopia's Ministry of Industry (MoI) has introduced a new policy that focuses on import substitution as a means to enhance domestic production and reduce dependence on imports. This represents a departure from the previous emphasis on export-led manufacturing.

The policy, according to MoI, revolves around two key strategies. Accordingly, it aims to facilitate the domestic production of inputs, thereby fostering a self-sufficient manufacturing ecosystem capable of producing finished goods using locally sourced components. It also seeks to bolster domestic manufacturing output by increasing local production capacity and reducing reliance on imported finished goods. Within the next three years, the policy sets a target of entirely replacing more than 96 imported commodities with locally manufactured alternatives.

The Ministry stated that it recognized the vital role of local investors in driving this transformation and was encouraging their participation by opening industry parks. Moreover, a new incentive program is announced to be implemented, which departs from the previous uniform approach and instead rewards performance-based achievements.

This shift towards market-driven manufacturing development places emphasis on factors such as productivity, competition, and access to essential resources. The MoI is actively promoting the policy and has claimed early successes in replacing imported goods in specific industries such as brewing and cement.

Source: Capital Ethiopia