EDRI presents key findings from STIP

EDRI in collaboration with the Agence Française de Développement organized a workshop on Ethiopia’s Structural Transformation and Industrial Policy at the Hilton Hotel Addis Ababa on 18 Janruary 2017. 

Key findings and recommendations from policy research on export incentive effectiveness, manufacturing competitiveness and governance of industrial policy have been presented. 

The seminar started with opening remarks from H.E. Mr. Mekonnen Manyazewal, with the Rank of Minister, Executive Director of EDRI and Mr. Ignace Monkam Daverat, Regional Director, AFD 

The first study, presented by Dr. Mulu Gebre-eyesus from EDRI, “Export Incentives Effectiveness in the Ethiopian Manufacturing Sector,” found that though Ethiopian manufacturing relative wages are too small to compete against comparators in Asia and Sub-Saharan Africa, the sector’s poor relative productivity levels have eroded those perceived advantages. Moreover, the main challenges to competitiveness in the global market are inefficiency in public service delivery, limited capacity within the sector, and shortage of supply of quality raw materials and skilled labor. Within the domestic market, unsophisticated consumer demand, malpractices within the sector and unfair competition are found to be the significant challenges identified. 

Following up on studies that optimized the competitiveness of the Ethiopian manufacturing sector, the second STIP research on “The competitiveness of the Ethiopian Manufacturing Sector,” presented by Dr. Tigabu Degu, reveals poor performance in export revenue and diversification. Using qualitative analysis, the study further reveals the reasons for this including inefficient public service and limited capacity of the sector and despite available young and easily trainable workforce and abundant fertile land, the sector suffers from shortage of skilled labor and that of supply in quality raw materials. The study recommends strengthening the industry-university linkage and the law enforcement capacity of the government. 

Finally Dr. Girum Abebe and Ashagrie Demilie presented a study titled “Industrial Policy Network and Bureaucratic Capacity of Key Public Institutions in Ethiopia” that examines the industrial policy network and the implementing capacity of the institutes within it. The study uncovers that public sectors, despite the positive self-image of their bureaucrats, are characterized by provision of mediocre services due to the lack of capacity and motivation of the mid-level bureaucrats that occupy offices. Therefore, the study suggests that maintaining the complementarity of the institutional objectives of the various public institutions along the policy network and building their implementation capacity be given as much emphasis as designing the robust national plans. 

The seminar was attended by high level policy makers, government bureaucrats, and key experts from think tanks, the academia and the private sector, such as industry associations.