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The Minister of Industry has set a hard-currency earnings target this year from industry sector development which is over 235 percent higher than their accomplishment during the past fiscal year. The Ministry is going full tilt to alter and rearrange its structures to accomplish this. Even though the government had plans to develop and expand the industry in the five-year Growth and Transformation Plan (GTP), the sector growth has not been going according to expectations.
For instance, based on the GTP, in the past fiscal year (2012/13) the government had originally targeted to export about USD 1.1 billion worth of products from the industry, but the actual performance shows it earned about USD 282 million. The performance of the sector during the first two years of the GTP has also fallen short of the projections.
During the current budget year, the Ministry has targeted to earn over USD one billion from the manufacturing sector. Even though the current year’s projection is very high compared with the past year’s achievement, it is still below the original GTP target for this year, which is only two thirds. The original plan indicated that the sector has to generate about USD 1.6 billion in the 2013/14 fiscal year.
To align with their current projection, the Ministry has made several evaluations and held meetings in the past few months. Sources at the Ministry indicated that meetings with stakeholders, which included the private sector and government financial institutions, have been carried out to resolve outstanding problems and expand exports from the sector. The evaluation of high level and lower level management of several departments within MoI has already been conducted. Following such measures, reforms at the ministry office have taken place and additional departments have been established. For instance, new divisions led at the state minister level have been set up. When the Ministry of Industry was set up and organised in 2010 at the beginning of the GTP period, only one state minister had been appointed, but now the number of state ministers has increased to three, with new and separate responsibilities.
Tadesse Haile, who served the industry sector for several years at the state minister level, is now responsible for the textile, leather and metal industries division. Mebratu Meles (PhD), who appointed as state minister two months ago for MoI, is responsible for the chemical and construction divisions, while Sisay Gemechu, the third state minister, is responsible for the investment and industry zone development divisions.
The Meat and Dairy Technology Development Institute, which was under the Ministry of Agriculture, has now been placed under MoI with the aim of boosting agro processing investment.
The agro processing division at the Ministry has now been replaced by the food, beverage and pharmaceutical division to expand the responsibility of the former division.
According to reliable sources, the Ministry has also established another new department under the name chemical and construction industries development.
“We have evaluated and made improvements in all organisational structures to eliminate barriers for sector development,” sources at the ministry office said. Associations, the employer federation and nine industry federations have also held separate discussions with Ministry officials for future developments and achievements in the manufacturing sector.
The Ministry also discussed several issues with exporters to assess the problems they face and find viable and lasting solutions. In the past few weeks, Ministry officials held meetings with officials of the Commercial Bank of Ethiopia and the Development Bank of Ethiopia to evaluate their support for sector development and to discuss on future strategy in terms of financial support for the industry. Our Sources stated that on Thursday Ministry officials, various industry-sector representatives and the two banks have met with officials of the National Bank of Ethiopia aiming to clarify policy and the strategy of the two banks for the development of the sector. “We are now clearing out barriers within the departments in the Ministry and elsewhere,” the sources said.
MoI has ordered the private sector to send in its export plan for the current budget year. According to different sources from the private sector, the institutes that are responsible for various manufacturing under MoI have also imposed a yearly minimum export amount on every company in the sector.
“We are not only aiming to achieve the export target, but will facilitate and make easier the processes needed for future growth,” experts explained.