The German Development Cooperation and Siemens Healthineers partner up to support the Ethiopian healthcare system through ultrasound technology. The partnership is designed to provide healthcare providers with medtech equipment and to train medical and technical staff.
The German Embassy in Addis Ababa, the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH and Siemens Healthineers today handed over ten NX2 ultrasound devices to the Federal Ministry of Health of Ethiopia to support the Ethiopian health system in further mitigating the repercussions of the COVID-19 pandemic. Through this partnership approach, Ethiopian healthcare providers receive urgently needed, versatile health technology and training for medical and technical staff to fully utilise the clinical capabilities of the ultrasound devices. The German Federal Ministry for Economic Cooperation and Development (BMZ) supports the project through its programme develoPPP – a funding scheme for sustainable company initiatives.
Within Africa, Ethiopia is one country that has made significant advances in improving healthcare for its population in the past years, especially after the challenging situation posed by the pandemic.
The German Development Cooperation, Siemens Healthineers support Ethiopian healthcare providers
Progressing Ethiopia’s Industry
In one of his recent tweets, on May 30, 2022, Melaku Alebel, Minister of Industry, echoed a quote from Franklin D. Roosevelt that states. “The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little.”
This indeed is one benchmark for assessing progress in Ethiopia’s industry space which for the past couple of years has been hurdled by the pandemic, war from the Northern part of the country and of course the termination from the AGOA.
Following, the Ministry of Industry’s release of the 9-month report, Capital reached out to the Minister for an inside look at the progress realized thus far, and the lessons learned from the challenges amongst the various avenues used by the Ministry to provide solutions. Excerpts;
Capital: What are your views on the overall effect of Ethiopia’s termination from AGOA, and the mitigation lessons learned thereof?
Melaku Alebel: As we all know the decision was a huge blow to the manufacturing industry, more so to the industries’ that usually produce products targeting the US market.
This had a visible impact on such industries which have been exporting to the US market using the opportunity, with some having stopped as a result of the termination.
Being considerate of the situation, to minimize the effect, as a Ministry we have been carrying out various initiatives and have passed various decisions to ensure sustainability.
We have firstly done so by supporting companies that have been using the US market highly by implementing strategies such as the cost sharing mechanism. This mechanism allows these companies to continue exporting their products to the US market by having a tariff share between the producing companies and the receiving companies abroad.
Secondly, we have had our focus set to maximizing our export destinations and as a result we have been stretching our market alternatives to the European and Asian markets. Additionally, we have worked to shift export products as previously exports of food and beverage items was small. Thus, we have worked to increase the export share of these items.
In the current global market which has seen an increase in demand for food items has also presented us with the chance to increase our export of value added food and beverage items to the international market including that of increased export of meat and milk products.
Using all these techniques has allowed us to reel in better export performances than that of a similar quarter to last year. Of course, we have used our challenges as a learning curve to expand our spectrum of possibilities, which has made us to perform better.
Capital: How was the performance of the last 3 quarters of the current budget year?
Melaku Alebel: In terms of the performance in 2020/21 export from the manufacturing sector, 390 million dollars was registered during that financial year. One thing to be proud of is that despite the hurdles faced, we have been able to realize and equal this mark by the 3rd quarter of this financial year. By the end of the final quarter, we expect the figure to increase, as a result these gains will show upward trend highs which are peaks higher than the past three or four years. The performances as mentioned were not without their struggles though, as we all know the situation that the country had been in. To speak frankly there have been lots of challenges such as; administrative gaps especially in creating a supportive atmosphere for investors, shortages of labor, lack of resources, finances, and infrastructure as well as lack of coordinated government support were obstacles to production.
On the first two quarters of the year we didn’t have information about manufacturing industries, especially those who stopped their operation until we decide to go down and asses the overall activities of the industries.
We found that 446 industries had stopped their operations. We expect the number to increase when proper investigation is done all over the country. Besides looking into those who stopped their operations, we are also trying to assess the capacities of the operating industries, in addition to capturing and addressing the challenges they are facing.
Capital: How has attracting new investments been like for the past nine months?
Melaku Alebel: Investment and job creation is like bread and butter as one automatically complements the other. Thus attracting new investment means new jobs are created which has been atop of our priority agenda. To this end, in the past three quarters we have been working to increase investment in the agro sector by attracting new investment in the agro industry parks including also extending efforts to increase new investments for small, medium and large industries engaged in the textile, chemical, steel, and leather industries.
Apart from attracting new investments, we have placed efforts to support industries which had started their constructions but stopped due to challenges, and we have rendered similar support to those that completed their construction but were unable to kick start their operation due to various constraints.
Even though we have realized good results over the three quarters, it doesn’t mean we should be content as there is so much room for us to increase our efforts for an even better result. Since the unemployment rate in the market is high, we need to work to narrow this gap and make sure that the citizens’ income is improved so as to also solve the high cost of living.
One option to solving the high inflation in the market is by increasing quality and quantity of production and products. Thus we have to increase attracting investments whilst continuing to strengthen the existing ones. Of course for us as a Ministry, we acknowledge that we that we are at the beginning stages, thus we shall continuously and consistently strive to attract more and more investment which will not only uplift the country’s economy but also that of its people as well.
Capital: Doesn’t exporting food items have an effect in the local market which is suffering from high inflation?
Melaku Alebel: The increase in the export gains from food items is because we have highly worked on exporting value added items which do not affect the market.
However, products that are banned from export are still barred. But since we can’t achieve our plans in increasing foreign currency by only exporting non value added products, we have to strike a balance by strengthening our food processing industries to highly engage in exporting value added items without affecting the local market.
Capital: What is the Ministry doing to support these industries?
Melaku Alebel: In our 6 month report, we had decided to assess the operation of industries and further classify their challenges and offer our support by engaging with different stakeholders in the space.
Through these collaborative engagements we have been able to render our support and work to strengthen; job creation, export, building new shades, transferring land and capacity building, lease financing, working capital organizing exhibitions, market linkages, and import shortage.
Our industries common challenges are shortage of inputs, employees, and infrastructure to which it takes a concerted effort to solve these. It can’t all be solved in one night and that is why we are reaching out to engage with stakeholders in addition to our initiatives including our movement ‘Ethiopia Tamerit’ which is a challenge that seeks to enhance our country’s production productivity.
Industries in their nature could stop owing to low capacity to which some in our country have fallen victim as a result of lack of support. From the identified 446 industries, so far we have managed to re-open about 148 of them and we will continue to support the rest.
Capital: Currently, shortage in foreign currency is the main challenge facing industries. What are the efforts done by the Ministry to solve this challenge?
Melaku Alebel: With regards to foreign currency, the main thing is understanding the main source of the problem, which is low performance in production and export. Unless we solve and increase our productivity and export capacity, the shortage of foreign currency will not be solved.
One of the aims of Ethiopia Tamrit movement is this; which is geared to increasing productivity in both the manufacturing and the agriculture sector, by developing government and institutions’ capacity.
However in the short term, we are working to identify industries which have complex problems by engaging with different stakeholders regarding foreign currency.
Capital: What is the Ethiopia ‘TAMRIT’ movement?
Melaku Alebel: It is a one yearlong campaign being held at different regions and dubbed ‘Ethiopia Tamrit’, roughly translated as ‘Let Ethiopia produce’.
The campaign at regional levels is aimed at locating problems within the industry sector, resuscitating defunct industrial centers, and attracting more investment.
Improving productivity in the manufacturing industry, which constitutes about 50% of the sector, was one of the areas the government was working on, the campaign will not end after a the planned year period but will be extended allowing for more opportunities to provide sustainable solutions to the challenges observed.
The campaign will have forums, exhibitions and recognition of exemplary manufacturing industries as well as other related programs.
Capital: In regard to supporting industries damaged /affected/ by the conflict in the northern part of the country, is there anything the Ministry is doing on the matter?
Melaku Alebel: We have opened our temporary office in Kombolcha town to support industries in the area. In addition, we have given training and capacity building schemes to both the regional and city administration in areas which industries should be supported.
Furthermore, regarding foreign currency and finding inputs, our ministry in conjunction with other stakeholders has carried out assessments. The Ministry of Finance and the National Bank are also main stakeholders that pass decisions, and we are working with them for optimal results.
The conflict has affected different sectors alike, so based on the priorities; industries will accordingly get due support with the current progress being on a good track.
African Development Bank signs $830,000 grant agreement for Ethiopia
The African Development Bank has signed an $830,000 technical assistance grant agreement for Ethiopia. The funds will help mainstream climate risk management, gender and resilience into economic planning and development in the country’s Ziway-Shallah sub-Basin.
The signing took place on Thursday 26 May during the African Development Bank Group’s 2022 Annual Meetings, which are taking place in Accra. Semereta Sewasew, State Minister, Ministry of Finance, signed on behalf of the Ethiopian government. Kevin Kariuki, African Development Bank Vice President for Power, Energy, Climate & Green Growth, signed for the Bank.
The funds will come from the Climate Investment Funds’ Pilot Program for Climate Resilience. The African Development Bank will administer the project.
The grant will contribute to the development of a climate-aligned water resources development plan and investment strategy for the Ziway-Shalla sub-Basin in Ethiopia’s central rift valley. It will also fund a water allocation plan.
The Issue of State Capitalism
Across the United States, Europe, and much of the rest of the developed world, state interventionism is meant to lessen the pain of the current global recession and restore ailing economies to health. For the most part, the governments of developed countries do not intend to manage these economies indefinitely. However, an opposing intention lies behind similar interventions in the developing world: there the state’s heavy hand in the economy – State capitalism – is signaling a strategic rejection of free-market doctrine.
State capitalism is not simply an economic system. It is a political invention designed to ensure that market activity and wealth serve the interests of the state and those who run it. In times of crisis, state officials will use state-run companies and investment vehicles to defend state interests even at the expense of their economic performance.
What about the long-term viability of state capitalism in those places where they are exists? Are Russian, Chinese, or Gulf Arab state-owned enterprises becoming more competitive as part of some sort of “State Capitalism? There is no question that a growing number of these companies are competing with the world’s largest multinationals. Some of them are winning. Yet, if they are truly becoming more competitive, why do they still need the financial and political backing of their home governments? Could they compete as effectively without these advantages? If they are outgrowing the need for state support, does that not imply that this form of state capitalism is not sustainable and therefore not a viable long-term alternative?
In fact, if state capitalism is merely a developmental stage on a company’s path towards self-sustaining dynamism, what happens when powerful officials with a direct personal stake in their success resist the push to privatize them? State-owned companies are not known as leaders in innovation. Some of them become dinosaurs. But if they still generate revenue for powerful state officials or politically connected business leaders, they are unlikely to become extinct, even when they should.
Policymakers in the era of globalization have tended to focus on facilitating greater integration while ignoring critical vulnerabilities and risks in the global system. A noted economist, Ian Goldin, at Oxford University writes, if we do not take steps to address these weaknesses, we risk a backlash of protectionism, xenophobia and nationalism. Globalization remains at the center of today’s debates. Yet, despite much research and commentary, vital dimensions remain poorly understood. Recent decades of globalization have created a more interconnected, interdependent and complex world than ever witnessed before.
While global policy has focused on facilitating integration, the implications of growing interdependence have been largely ignored. The acceleration in global integration has brought many benefits, but it also has created fragility through increased vulnerability and exposure to global shocks, such as today’s financial crisis. The biggest challenge for politicians and policy makers is the need to balance the enormous benefits that global openness and connectivity brings with national politics and priorities. It also is a major concern for citizens, who are torn between the benefits of imported goods and services, and their worries about local jobs, the dangers associated with illicit flows, and other implications of more open borders. These concerns are universal and affect all societies.
The benefits of global integration have been associated with unprecedented leaps in human development indicators. Technological innovation has accelerated integration both virtually, through the development of fiber optics, the internet and mobile telephone, as well as physically with vast improvements in transport and infrastructure. The spread of people, ideas, trade and the inspiring education revolution has and will continue to offer enormous potential for poverty alleviation and economic opportunity.
Yet the downside to globalization is that of increased inequality between and within countries. And the second “side effect” is that the likelihood of increasing numbers of global shocks and crises is growing, as is the people vulnerability to them. Little is understood about the risks associated with large-scale system interdependencies. Well beyond purely the financial arena, new systemic risks loom large in areas such as climate change, water and food insecurity, pandemics, resource scarcity, antibiotic resistance, bioterrorism, cyber security and supply chain vulnerability which are the few among the many.
The fragility of the system as a result of these new vulnerabilities now challenges the very core of the benefits that globalization has produced and is a fundamental challenge to national governments, business leaders and global institutions. Unless the world can find an appropriate balance, there is a significant risk that the failure to manage globalization will lead to a backlash of protectionism, xenophobia and nationalism.
This crisis requires an extraordinarily deep level of reflection by global leaders and by society at large. To turn our backs on globalization would severely undermine economic growth, poverty reduction and global cooperation. If the benefits of globalization are to continue to outweigh the risks that rapid integration exacerbates, understanding systemic interconnections and building multi-stakeholder responses are vital. Redesigning global risk governance mechanisms to take these interconnections into account and to enable cooperation is a major but necessary undertaking.
The bad news is that the tidal wave of globalization has brought unprecedented and new systemic risks. The good news is that this phase of globalization has brought the means to meet the downsides by raising levels of wealth and opportunity, and vitally increasing the collective knowledge and connectivity. The opportunities for cooperative solutions have never been greater, particularly if we are to address the major challenges of the 21st century.
Yet to harness these opportunities, what is needed is an intellectual revolution, a citizens’ mobilization, and a fundamental leadership and institutional shift. Politicians and policymakers are right to worry about today’s significant economic woes. But if we ignore the bigger crisis emerging at the core of globalization, and jump from one crisis management to the next, we do so at our peril.
