Challenges of the Ethiopian manufacturing sector under the GTP II

The strategic pillars of the GTP II (Growth and Transformation Plan) related to manufacturing include (1) developing light and small manufacturing enterprises that are globally competent and leading in Africa (2) establishing a foundation for further growth of the strategic heavy industries which ultimately enable Ethiopia to become an industrialized country by 2025 (source: GTP II, PP 38). This is, however, an over ambitious plan. First of all, our experiences over the past ten years tells that, despite the sector level growth, the much needed structural transformation has never even showed a sign of change. The industrial base of the country has remained low contributing only 12-14% to GDP of which the medium and large factories as well as the light and small manufacturing shared respectively 4% and 1.2% throughout the past decade.