During the course of the past eleven years or more precisely since Ethiopia set on the path of renaissance bringing in to play palpable policies and strategies, it has been exhibiting an 11 per cent growth. Specially during the past five years, the government was fervently pursuing objectives that eye at rapid growth and structural adjustment.
Towards the furtherance of the laudable growth, improving the agriculture sector, which is the mainstay of the country’s economy, is one of the issues that drew the government’s focal attention. As it is known, eighty per cent of the country’s economy leans on agriculture. On top of effecting a rapid growth, the government still focuses on tasks that could usher in structural transformation a leap to an industry lead economy.
Unless the agriculture sector is bolstered by the manufacturing sector and agricultural products feed industries, the sector could not take a turn for the better. Unless the agriculture sector adopts and adapts new technologies and industrial inputs, agricultural productivity could not take off the ground. Unless business as usual trend is reversed, in the long run, it could but grind to a halt.
Currently the country’s main concern is letting the manufacturing sector shift from the back bench to the driver’s seat of the economy. In tandem with this comes the question that “How could we step up the agriculture sector taking quality yields in to account?”
Against this backdrop and in light of the government’s envisaged goals, the country is expected to portray 10 to 11 per cent economic growth annually for a decade. If the country fails to do so it could but hit the bottom of the table let alone catch up with the affluent nations. To avert such a tragic scenario the country is expected to grow by 11 per cent per at least for a decade. In so doing the per ca pita income of the citizenry will improve.
The conviction Ethiopia has to join the ranks of middle income countries is reiterated. That is USD1500. However if the country manages to grow as per the chalked out plan it could come close the USD 2300 mark within ten years.
By 2025G.C the size of Ethiopia’s population is extrapolated to be 115 million. Yet the per ca pita income will increase. Experiences gained from developed countries show that when the manufacturing sector takes the driver’s seat, it will spur growth in the agriculture sector.
The country has a plan to create two million job opportunities in the manufacturing sector not counting the job opportunities created in Micro and Small Enterprises (MSEs).That is why a goal is set on the average to create 200 thousand job opportunities every year. During the past half a century, the job opportunity created in medium and big industries was 350 thousand. This is not a big number. Now the country aspires to create half as much job opportunities every year. This path-breaking task is believed to bring basic change.
The contribution of the manufacturing sector in the country’s economy is not more than 5 per cent. All together the contribution of the industry sector to the country’s economy is about 15 per cent. The industry sector entails mining, construction and manufacturing. As experiences registered elsewhere show, among the three, it is the manufacturing sector that guarantees the desired growth. That is why a goal is set to four times multiply over the contribution of the manufacturing sector. The manufacturing sector is expected to have a 20 per cent share on the economy. Though the journey is arduous, if we manage to achieve the set goal, the country could materialize the hoped for growth.
To this effect, huge investments must replenish the manufacturing sector. Even if all factories in the country try to utilize their maximum potential the sought-for change could not be realized. Hence there is a call for an influx of investment that backs up local engagements.
Foreign investment is useful for keeping abreast with ultra-modern technologies, building market potential and understanding managerial skills. Local investors are expected to invest in the industry sector. Most of the local investors show proneness to the trade and service sector. This trend has to be reversed.
In this regard the government must give incentives to investors who want to engage in the manufacturing sector, brushed aside so far. Tipping the balance to the youth industrialists sounds plausible when the country attracts investment.
In its endeavor of attracting foreign investment, the country must be selective. It must zoom its eyes to countries that have muscles in the manufacturing sector like China and Turkey.
And sectors in the manufacturing sector that must enjoy focal attention have to be identified. Leather and leather products, textiles, clothing, pharmaceutical and agro-industry must come to the top of the table. When the country attracts foreign investment it must focus on the technology giant and market dominating ones with good reputation, for they have a wealth of experience in circumventing challenges while operating outside their country. Moreover it is from best experiences the country should draw lessons.
Ethiopia is also determined in expanding industrial parks. For instance the government has earmarked 750 million dollar for industrial parks it wants to create.
A similar drive must ripple across the continent.
Stakeholders must lend a hand to it. To such effect a forum on investing in African organized by the World Bank Group, China Development Bank, China-Africa Development Fund and The United Nations Industrial Development Organization was held from June 30-July 1 at Sheraton Addis.
[TheEthiopianHerald]