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News: Ethiopia sets sights on full self-sufficiency in key industries within three years

The Ministry of Industry has unveiled a set of ambitious targets with the intention to meet the country’s demand for textiles, clothing, food, and beverages through domestic manufacturing within the next three years (Photo: investethiopia.org)

Addis Abeba – In a move to reduce the nation’s reliance on imports, the Ministry of Industry has unveiled an audacious plan to fulfill the country’s needs for food, beverages, textiles, and clothing entirely through local manufacturing within the next three years.

Tarekegn Bululta, state minister for Industry, indicated that the ministry is actively striving to achieve its established targets. The strategic approach is centered on “bolstering import substitution capability and enhancing competitiveness.”

Industries that specialize in the production of food items, beverages, non-metallic minerals, and textiles comprise in excess of half of the entire spectrum of 5,000 industrial units operating in the country.

Currently, the domestic manufacturing sector fulfills approximately 38% of the national demand, with the remainder being met through importation. “This should be changed,” stated Tarekegn.

In an effort to alter this dynamic, the Ministry is setting ambitious goals to markedly escalate the proportion of goods produced within the country. Over the forthcoming decade, the objective is to amplify the domestic contribution to 60%, a substantial rise from the present 38%.

The State Minister disclosed that a selection of 96 products has been identified to facilitate the strategic transition towards self-sufficiency. The intention is, within a span of the next three years, to fully substitute the imports of food and beverage items as well as textiles and garments with those produced within the country.

In addition, it has been revealed that efforts are underway to supplant the importation of metal products with local manufacturing, with a targeted completion period of the forthcoming decade.

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In a recent address to parliament, Prime Minister Abiy Ahmed disclosed that the nation has attained self-sufficiency in the production of coal and beer barley.

Despite the government’s ambitious targets, a significant proportion of industries are operating at roughly 30% of their capacity, as revealed a by a recent study from the United Nations Development Program (UNDP).

This suboptimal performance can be attributed to a confluence of challenges, including inadequate security, restricted access to financial resources, and a shortage of foreign currency, all of which pose significant obstacles to business operations.

Recently, the government sanctioned a new manufacturing policy with the aim of enhancing both the output and efficiency of the manufacturing sector. Additionally, it aims to increase the sector’s contribution to the Gross Domestic Product (GDP), which has witnessed a decline from 5.9% in 2019 to 4.4% in 2022.

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Currently, the manufacturing sector accounts for a mere five percent of Ethiopia’s total employment.

The information provided by the ministry indicates that, within the first five months of the current fiscal year, locally manufactured goods, valued at $852.2 million, have been produced to substitute imports of the same value.

The government has set forth a plan to replace imported goods valued at $2.3 billion with locally manufactured products over the course of the entire fiscal year. AS

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