| Overview : Ethiopia demonstrated progress in economic and social development in the past decade. Commendable performance also witnessed in macroeconomic policy management and annual real Gross Domestic Product (GDP) growth rate averaged 11 percent in the past nine years. Ethiopia is now implementing the country’s trans formative agenda- the Growth and Transformation Plan (GTP) that foresees to double the country’s GDP over the medium term and become a middle income country by 2025. The development goal is anchored on structural transformation of the agricultural and industrial sectors in ways that enhance inclusive growth and wealth creation as well as expansion of employment opportunities in the economy. The four strategic pillars on which the industrial sector depends include enhancing the manufacturing sector’s contribution to industry and economic growth; ensuring balanced regional development; integrating Ethiopia’s industries into regional and global markets; and pursuing both export-led and import-substitution industrialization strategies.
Notwithstanding the promising potential the sector holds and the progress witnessed over the years, challenge remains. Majority of merchandise exports from the manufacturing sector are low value-added products which have minimal impact on substantially increasing export earnings. Moreover, the sector is faced with supply side constraints related to inadequate infrastructure (roads, telecom, electricity), high cost of transportation, limited participation in the regional and multilateral trading systems and insufficient knowledge about international trade . The performance of the manufacturing export sector is also affected by drawbacks in accessing niche markets due to entry barriers, lack of appropriate information, and limited financing capacity of exporters. Due to these constraints Ethiopia has not yet fully benefited from exiting export potential and available market access opportunities. |
