Africa

Ethiopia: The manufacturing sector’s constant sting

The history of manufacturing in Ethiopia dates back to the 1920s,but being prone to various challenges means its progress has been muted, says our special contributor Alem C. But now Ethiopia has established a National Manufacturing Competitiveness Council lead by Prime Minister Hailemariam Desalegn and tasked to help jumpstart the nation’s lurching manufacturing sector 

It is a yearly habit for Ethiopia’s Central Statistical Agency (CSA) to show the enduring pain the nation’s manufacturing sector, around since the ‘20s, goes through. Regular surveys by the CSA show almost 50% companies engaged in manufacturing sector in Ethiopia suffer from low productivity – as low as 34% on average – for reasons mostly related to poor quality and insufficient raw materials supply from the domestic market. This in turn has made manufacturing in Ethiopia the most expensive sector of all. During the year 2009/10, leading manufacturing industries in Ethiopia spent approximately $526 million on imported raw materials. The country had paid nearly $2 billion in 2010/11 to import heavy machineries and industrial equipments, according the CSA.