Ethiopia is rapidly positioning itself to become Africa's premier industrial hub, a transformation significantly driven by a concerted focus on its manufacturing sector. This assessment comes from prominent American political-economic analyst for Africa, Lawrence Freeman, who recently concluded a two-week visit to the nation.
Freeman, who toured various manufacturing plants, farms, and a sugar refinery, alongside meeting with government officials, lauded Ethiopia's "remarkable progress" in building its manufacturing foundation. "Ethiopia has a commitment to build up its manufacturing base, which is essential for any economy to truly function," Freeman stated, highlighting this as a significant departure from the general weakness of manufacturing across much of Africa.
Ethiopia's Industry State Minister, Tarekegn Bululta, echoed this sentiment, emphasizing the "massive reforms" undertaken to stimulate the sector. These reforms include critical macroeconomic adjustments and strategic policies designed to foster import substitution and boost export growth. "The manufacturing is one of the critical sectors that will determine the future prosperity of Ethiopia," Tarekegn affirmed, noting a discernible "transformation" within the sector over the past three years due to new government policies and procedures.
Freeman, having witnessed firsthand the operations of textile garment factories, steel complexes, and sugar factories, confirmed the tangible progress. He observed a notable increase in employment within the manufacturing sector in recent years, underscoring the vital role of tangible product creation for economic expansion. "This is how the United States was built by emphasis on manufacturing. It’s not replaceable by any other sector of the economy," Freeman remarked, expressing his pleasure at the palpable optimism and enthusiasm he encountered in the factories.
The analyst further highlighted that Africa, largely due to historical colonial and neo-colonial policies, possesses a significantly underdeveloped manufacturing sector. Ethiopia, with its burgeoning light manufacturing, particularly in textiles, stands out as a promising exception. Confident in manufacturing's pivotal role in achieving prosperity, Freeman urged Ethiopia to accelerate its transition in this regard, ENA reported.
The impact of the new policy reforms is already evident. State Minister Tarekegn revealed that the production capacity of industries in Ethiopia has surged from 46 percent to 61.2 percent. While the sector currently contributes less than 6.8 percent to the Gross Domestic Product (GDP), concerted efforts are underway to significantly increase this to 17.2 percent.
Furthermore, the manufacturing sector has achieved a significant milestone in its import substitution strategy, generating goods valued at $3.1 billion USD during the first nine months of the current fiscal year.