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.