The Ministry of Industry will switch its focus to assist the incubation of heavy industries during the five years of the second Growth and Transformation Plan (GTP II) which will be launched after a month.
The ministry which is responsible to mobilize and support the manufacturing sector focused on the automation of light industries in the first GTP period that will end on July 7, 2015.
Mebrhatu Meles (PhD), State Minister of Industry, told Capital that his ministry targets to assist the birth of heavy industries in the GTP II.
The ministry targets to make the country the leading nation that has the largest numbers of light manufacturing industries in Africa in the coming five years, according to the State Minister.
The ministry plans to upgrade light manufacturing industries to high end, finished goods producers. “They will produce products that are of final commodity stage,” he said.
“We will focus on heavy industries to support the light industries which are the main backups to the heavy industries,” he said. The light industries mainly engage on importing inputs that are produced by large industries.
“We have to substitute import of heavy industry products which are inputs for light industries,” the minister said.
Light industry manufacturers that make plastic and metal products will also get funding priorities. “To be competitive, we need to have heavy manufacturing industries,” he said.
Mebrahtu explained that the country will engage in iron ore exploration and production of raw materials that are used as inputs by plastic industries.
“We will aggressively facilitate the industry infrastructure to attract FDI, which is key to join the global value chain,” Mebrhatu said.
The ministry is developing a transformation strategy that will set the way for the expansion of the manufacturing sector. The strategy scouts a framework for a smooth flight of local business communities who command huge capitals to manufacturers.
“They [the local business community] have to join the manufacturing sector than staying on the service sector and commodity businesses,” experts at the ministry stated. The government has been lobbing the business community engaged solely on commerce to invest on the manufacturing sector. “We have to give more incentives for potential investors to encourage them to join the manufacturing sector, while we have to de-incentivize the service sector to stimulate the trade sector actors to focus on the manufacturing business,” Mebrhatu said.
In the GTP I, the Industry Ministry focused mainly on establishing basic institutional frameworks for the manufacturing and related sectors in addition to promoting the ground work.
“We will adapt an incentive package that will include relief from monitoring by relevant officers to catch up with international completion,” Mebrhatu added.
The ministry has the intention to launch a household and office commodities manufacturing sector which will be a new addition. The state minister said household and office commodities manufacturers will get priorities in GTP II.
Electric equipments like television sets and refrigerators will be the major commodities that will be produced in the country. Currently, the demand for electric equipments and the size of import are growing significantly.
[Capital]