Sunday, October 18, 2026
Home Blog Page 2951

Progressing Ethiopia’s Industry

-
0

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

-
0
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

-
0
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.

Me first, then you

admin
-
0
Me first, then you

When my children were younger, I bought them some educative computer games called “Me and my world”. The children could choose to let a young fellow go around and discover his world. Clicking on items that were passed on the way would open information on history, nature, mathematics etc. The children really liked it and could spend hours working by themselves discovering more and more as they played along. It is the title of the game that always intrigued me. “Me and my world.” As if you are alone with no others around. That is what I often think when I observe people around me, going their way. It could be on the street, in the traffic, in the office, anywhere. They are in their own world, not observing what is going on around them, strictly concentrating on their own activities, whatever they do. They don’t only take any notice of others; they in fact don’t seem to care about them. In fact, they seem to think that only themselves matter, not others, as if we don’t live in a so-called interdependent world. They think: “Me first, then you.” I observe it in the traffic, in the bank, in the shop etc. Waiting and allowing others to go their turn doesn’t come to their mind. In the process they offend others or worse, they create obstacles for everybody else, including themselves, to move on. We experience this in traffic every day, when drivers overtake left, right and centre while there is a jam further down the road. While doing so they offend everybody else waiting in line and on top of that block oncoming traffic, increasing the jam. Instead of helping the situation they make it worse. Maybe their offensive behaviour will help them move on, but for how long and at what cost? They are in their own world, not realising that with a little more patience, respect, some assistance, giving some space to others, they will in fact make a positive difference and help not only themselves but others too. This applies in every walk of life, not only traffic. It applies to the workplace and in the business as well. We are not alone and while getting out of our own small world, seeing the bigger picture, realising that we depend on one another will help a long way in achieving results. As long as we don’t see beyond our own little world, we will continue getting the results we always used to get, not necessarily the best.
So, it is important to open our eyes, see beyond our immediate environment, look around, observe, widen our vision and learn to see thing differently, try to see things through the eyes of another person.
When we stick to the way we see things we will continue doing things in the same way, getting the same results all the time. For example: If we see competition as a threat to our business, we will be defensive. We will not talk to others doing a similar business, them, keep information to ourselves. We may even go to the extent of frustrating, discouraging and boycotting them. As a result, we will remain isolated in the sector, not learn from others, not get essential information, face similar hostile competition in return and so on.
What would happen if we would turn this example around? We would not see competition as a threat but instead as an opportunity, a healthy factor in the free market, a stimulus to produce better quality and provide better services, an opportunity to join hands and face common issues together. Now we would do things differently as well. We would not deal with competition as a threat but as a welcome development. We would try to always be a step ahead, assuring our place in the market. We would make sure our quality stands out and that our services our focused on the clients needs. We would be creative in our marketing strategies. We would welcome meeting people in the same industry and discuss how to tackle common problems, join hands and form an association for the better of the sector. And if you really have a passion for your business, you should not worry about competition at all. You will always try to find ways to improve and to develop new designs, new products, new ways of doing things. By the time the competition is trying to copy what you are successful in, you will already have moved on to a next level. Those who copy are always a step behind and usually don’t reach the same quality. Customers will keep coming back to you to see what new products or designs you have on offer. Admitted, it requires you to be on your toes and never sit back, but that is why you are in business in the first place.
Another reason why it is important to communicate with the competition and to create a dynamic network is to make sure that all in the same sector adhere to certain quality standards. Because if there are some that produce similar items that don’t work or break down easily or are even dangerous, then that is harmful for the entire sector. So, get together and be a leader in your sector is my advice.
I would like to leave you this week with the following assignment. Choose an issue in your business that you know needs some improvement. Then, try to work out how you see it, how you are dealing with it and what the results have been so far. Having worked this out, now try to turn things around. Try and see the issue from a different perspective and think of ways to deal with the issue from this new perspective, how you could do things differently from now on. And finally try and imagine the results you would get, when you would do things differently.
My suggestion: don’t stick to the ways you have always seen and done things. Open your world and your horizon. See things differently. You may get better results indeed.

Ton Haverkort
ton.haverkort@gmail.com

1...2,9502,9512,952...4,684Page 2,951 of 4,684

EDITOR PICKS

POPULAR POSTS

POPULAR CATEGORY

ABOUT US

 

Capital is the longest-established private English newspaper in Ethiopia

Contact us: info@capitalethiopia.com

+251911226900 | +251911637862 | +251944732300 | +251116183253
 

FOLLOW US

© Newspaper WordPress Theme by TagDiv