A study conducted by the Common Market of Eastern and Southern revealed that Ethiopia’s manufacturing secure is not yet
ready to be competitive internationally and is showing little sign of improvement.
The study was commissioned by the Ministry of Finance and Economic Development and financed by the COMESA secretariat.
Problems noted by the study include slow productivity, high production costs, shortage and low quality of raw materials, shortage in foreign exchange, lack of skilled manpower, and frequent power interruptions.
More than half of the manufacturing activities in Ethiopia fail to be competitive and are on the margin even within the protected domestic market due to these problems observed the study.Ethiopia’s manufacturing industry is not thriving even with the tariff barriers imposed on the import of competitive products according to the study.
The study was carried out by a experts led by Daniel Endelila, representative of Zimbabwe based consultant Zim Consult, and including Dr. Bekri Yusuf with Bactec Consulting, Dr. Tadele Ferede, Economic lecturer at Addis Ababa University and Dr. Werko Gebeyehu.
The team of experts revealed the challenges that confront the Ethiopian industrial sector in a meeting attended by representatives from the Ministry of Industry, the Ministry of Trade, the Ethiopian Revenues and Customs Authority, the Ethiopian Standards Agency, and the Ethiopian Chamber of Commerce and Sectoral Associations.
The study was undertaken to determine if Ethiopia was ready to join the Free Trade Area created by the COMESA.
Ethiopia had not joined for reasons that include the nascent manufacturing sector and the loss of revenue attached to removal of tariffs. While anticipated challenges associated with loss of revenue have been invalidated by subsequent study the threat to the industrial sector could prove very real.
Source:Addis Fortune
