Ethiopia’s fast-growing manufacturing sector is running into a familiar constraint: logistics. As industrial output expands, manufacturers are increasingly facing delays in the import of raw materials, with ships queuing at ports and disrupting production schedules.
The challenge came into focus at the 4th Invest in Ethiopia Forum held in Addis Ababa, where industry players said demand for inputs has risen faster than the country’s trade and transport systems can handle. For manufacturers relying on imported raw materials, the result has been longer waiting times, higher costs and pressure on production timelines.
Alex Song, chief executive officer of Gobez Electric Manufacturing PLC, said the logistics bottleneck has become one of the biggest obstacles for manufacturers, despite strong investment in new energy and industrial projects.
“The challenges we are facing recently are mainly related to logistics,” he said during the forum. “For example, one can mention the queues at the port. There are so many ships. Our ship is also in line because our consumption of raw materials is very high.”
The delays are especially costly for large-scale producers operating under just-in-time production models, where raw materials must arrive on schedule to keep factories running efficiently. When shipments are held up in the Red Sea or at the Port of Djibouti, factories face interruptions that can ripple through the entire production chain.
The problem is particularly acute in Ethiopia’s new energy sector, which depends heavily on imported spare parts and specialized inputs. As the government expands special economic zones and industrial parks, demand for steel, chemicals and electronic components has increased sharply, adding further strain to already stretched supply routes.
Government efforts to ease the burden, including one-stop service arrangements that bring customs, banking and investment services into industrial parks, have improved administrative efficiency. But investors say external pressures such as fuel price volatility and weaknesses in regional trade corridors continue to limit how far these reforms can go.
The bottlenecks also have implications for employment. Zhang Huarong, founder of Huajian Special Group, said Ethiopia’s ambition to create jobs for millions of young people will depend not only on investment policy but also on the speed at which goods can move through the system.
Despite the frustrations, many manufacturers say the congestion reflects a broader success: demand is rising because the economy is growing. Several described the situation as a “good problem” to have, arguing that the challenge now is to match industrial ambition with stronger supply-chain capacity.
Some companies are trying to adapt by sourcing more inputs locally and developing their own logistics solutions. Others are prioritizing cargo flights or shifting toward electric vehicles powered by solar energy to reduce dependence on fuel and improve reliability.
Alex said the difficulties are also pushing firms to innovate and adapt. “If you can understand the culture you can gradually turn challenges into opportunities,” he said.
