Currently, the mainstay of the nation’s economy is agriculture, which is characterized by rain-fed subsistence farming. The sector is a means of employment for 85 percent of the population. However, as heavily nature dependent, it could not be reliable to attain sustainable development. Hence, the nation’s economic landscape must swap to the non-farming sector.
Labor force stranded in the rural areas must be shifted to the non-farming sector.
As evidenced globally, no country could achieve a middle income economy with a large portion of the population languishing in subsistence farming. Cognizant of this, the government has underlined the need to absorb agricultural labor through the expansion of the manufacturing sector. This will, step by step, reduce the volume of rural agricultural labor. Both GTP I and II underscore the vitality of the manufacturing sector as a means for rural labor’s attraction.
To realize this, an enabling environment is created by the government. The establishment of industrial zones has proceeded apace. The investment proclamations are frequently revised to attract domestic and foreign investors. Tariff and customs rules are improved and the services that are provided to importers and exporters are being spearheaded.
Exploiting the opportunity, local and foreign firms have already invested in the manufacturing sectors such as textile and garment industry and as such the sector is burgeoning from time to time.
Many professional and unskilled workers have been enjoying the created opportunities. The sector’s ongoing expansion task has brought multifaceted benefits to the nation.
The incoming of latest technology and knowledge could enhance the local capacity down the road. The exposure of workers and professionals to the new technology, via imitation, will give way to locally modified materials. This in turn will support the nation’s ambition for industrialization. On the other hand, the sector will bring together several local and international stakeholders involved from production to marketing.
Locally, there are thousands of workers who are engaged in cotton farming, for them the expansion of textile and garment factories has created reliable market that allows them increase their income and productivity. The supply of yarn, fabrics and textiles to the local market will help cut the importation of textiles curtailing hard currency expenditure. The country ill affords squandering such meager resources.
Ethiopia is displaying the highest population growth. And as such the demand for our textile products is immense. Hence, investing in the sector can be said feasible both for local and foreign companies. Not only that, the increasing demand of cotton products in the local market could trigger the expansion of cotton plantation farms. In the country there are vast areas of land suitable for cotton plantation.
In addition, the availability of surface and ground water could make farming easy. As a recent phenomenon both local and foreign firms have been engaged in cotton farming. And the increasing demand for cotton, meant for textile industries could trigger the devotion of additional fallow lands for farming. The plantation could create more job opportunities for thousands and ultimately accelerates the nation’s economic growth.
Textile products are not only supplied to local markets, they are also supplied to foreign markets. As a result, the sector could strengthen the nation’s foreign currency earning capacity.
Ethiopian textile products that are being exported with its brand can further build the country’s image. Hence, it is not only economic value the scheme has but also a political one. This could be taken as killing two birds with a stone. Thus, focusing on quality production must not be compromised. To that end, utilizing up to date machines and employing well-disciplined workforce are essential. Because, in the contemporary world, where economy is governed by supply and demand, elbowing one’s way into foreign market is not an easy task. There is a red-hot or fierce competition between countries. Meeting customers’ demand standardized quality control, based on the international norms, is essential.
The government has chalked out an ambitious strategy plan to turn a middle income country by 2015.And to meet the set goal, the nation’s foreign currency reserving capacity must increase by many folds. The short and simple approach to realize this is expanding export oriented manufacturing industries. Such industries are labor intensive as they could absorb more skilled and unskilled workers. And whenever job is created more hard currency can be earned.
In addition to that to attain real economic development export items must be diversified. Exporting only a handful items could not be much help in the country’s development journey. Hence, for this, the manufacturing sector could be seen not only as an option but as a must.
At this juncture, it is important to note that the most populous country in the world such as India and China have managed to utilize and expanded labor intensive factories for their economic transformation. This way they have proved successful.
Such approach can be translated into action here based on our experience and our context.
According to recent report, out of 90 million people in the country, 70 per cent of them are below 30.This alarms us how job creating enterprises are essential.
On the contrary, denying this fact and continuing with business as usual bent of mind might bring unnecessary consequences. Hence, expanding labor intensive firms must be seen as a way out.
As part of the manufacturing sector, the mushroomed small scale enterprises can play a crucial role in job creation. Scaling up their capacity to the higher standard must be strengthened. However, to meet the export target, importing high-tech manufacturing machine is essential. And for that attracting foreign investment must be a priority agenda. Parallel to this, supporting investors that already come on board is crucial.
Thus, the attraction of foreign investment expanding infrastructures such as road, rail and air transport, energy, telecommunication and banking facilities must be strengthened.
[TheEthiopianHerald]