The Ethiopian manufacturing sector is still far from being an engine of growth and economic transformation despite potential and assurances from various actors to the contrary. It plays a marginal role in employment creation, exports, and output. It is also short of stimulating domestic linkages and is dominated by small firms, resource-based industries, low-value and technology products, and weak inter-sectoral linkages.
Ever since 1945, when strategic planning for industrialization first begun, successive administrations have been unable to oversee the take-off of the nascent manufacturing sector. Notwithstanding micro-level problems, legacy issues including foreign currency shortages, electrical power interruptions, and sectoral linkages still linger. But now, adding salt to the wound is the current administration’s tinkering with tariff privileges for factories. Selome Getachew reviews the issue with input from Bamlak Fekadu.