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.

The coming of Abiy Ahmed (PhD) to the helm was received with great enthusiasm and hope among the public. The expectation that it carried was that of a stronger private sector, a deviation from the administration of his predecessors. Now after a military engagement with his former bosses, the TPLFites—now designated as terrorists—many are wondering if he could perhaps end up in a similar déjà vu moment like that of his ally to the north, Isaias Afwerki. Will Abiy keep his promise of a strong private sector? Will the current war-economy status totally shatter the glimpse of hope for a vibrant private sector? EBR’s Bamlak Fekadu investigates.

Ethiopia used to rule all ports on the western side of the Red Sea, until it lost its last one to Eritrea in 1991, joining the pack of landlocked African economies. Over 90Pct of Ethiopia’s international trade—forecasted to almost double from the current 17.1 million tons to 30 million metric tons by 2030—has been utilizing the Port of Djibouti.

However, Ethiopia is currently exploiting additional ports in Kenya, Somalia, Djibouti, Sudan, and Eritrea. Following the opening of the Ethiopian logistics sector to foreign investors, these ports are planned to be linked with dry ports and economic and logistics facilities across Ethiopia. To that end, the Logistics Transformation Office, is currently finalizing the first Ethiopian logistics masterplan, which envisages interconnecting the nation through infrastructure including ports, roads, rail, aviation, pipelines, and transboundary rivers. Ashenafi Endale explores.

The influence advertisers put on media is growing by the day. Commercial broadcasters, newspapers, and magazines generate the majority of their revenue from advertisements. As this is the case, ad placers usually use their economic power to influence content production in favor of their interests. Striking a balance between the freedom and autonomy of media, on the one hand, and influence from advertisers on the other is one of the biggest challenges private press faces. EBR’s Ashenafi Endale explores the issue in depth.

A new hope was dawn when two banks named Goh and Selam recently begun selling shares with the aim to finance specifically housing demand. Ethiopia’s housing gap is an accumulation from generations, with over 400,000 new demand annually matched by less than 100,000 supply, government schemes and private developers teamed up.  Now, Goh and Selam revived the demand of millions of house seekers, promising to deliver hundreds of thousands of houses in few years. Goh will provide loans for the house buyers, while Selam both the developer and buyer.

At a sensitive time when the economy is suffering from inflation, unemployment, debt distress, poverty, conflict, and COVID-19, the nation prepares for the sixth national election to decide who rules for the next five years to end the transitional government that has been in power since April 2018.
Nonetheless, the political space is largely occupied by parties fanning and prioritizing ethnic quests instead of addressing underlying economic constraints. Ideology-based analysis and principled models for Ethiopia’s vicious economic circle are brands scarcely seen in the political parties’ campaigns. Out of the 47 political parties cleared to participate, 18 are competing for federal Parliament seats. While very few of the national parties have manifestos, even fewer have well-defined politico-economic policies to relieve voters of the ongoing economic strife.

Over the last two years the number of entrant banks has proliferated, almost equaling the amount of working banks. Nonetheless, a new directive issued by the caretaker National Bank of Ethiopia has shut the door on the further entrance of new banks, whilst also raising the bar on smaller banks and the close to 20 already in the pipeline.
Banks are now expected to raise their minimum paid-up capital to ETB5 billion within five years from the existing ETB500 million mandated in 2011. Although central bank authorities stress the intention is to discourage unbalanced proliferation and nurture few competitive banks, industry leaders and experts claim that this move is the interest of the leading banks. Up to six existing private banks are forecasted to consider merging, while a substantial number of under-formation banks will either abort their efforts or join hands. EBR’s Ashenafi Endale investigates the implications of the new move. 

In the past, prices of commodities revert to reasonable levels after the end of the harvesting season. However, agricultural products are priced at new heights this year. In fact, the current inflation spike is the second highest after the record year of 2008. A major factor is the widespread instability affecting the mobility of commodities. Foreign currency scarcity and an increased money supply have also contributed. But the lifting of fuel subsidies by the government has brought the acceleration of prices to new levels. EBR’s Ashenafi Endale explores.