Ethiopia Aims to Collect $9 Bn from Exports, Rank in Top 50 in Ease of Doing Business in Next Decade

Ethiopian Ministry of Trade and Industry (MoTI) said it plans to collect $9 billion in the next ten years. The Ministry aims to achieve this mainly by increasing the export potential of Ethiopia's manufacturing industry. The Ministry also announced that it aims to make Ethiopia in the top 50 countries in ease of doing business.

Shimelis Arega, Senior Communication Expert at MoTI, told the Ethiopian Herald that the ten-year strategic plan includes increasing quality inspection of export and import products from the current 650,000 to 1,058,781 MT (metric tones) and 1,950,000 to 3,485,630 MT respectively by 2022. This will create five million new jobs, he noted.

MoTI's ten-year plan includes raising the share of the manufacturing industry in Ethiopia's economy from 6.8 to 17 percent while increasing the sector's average production capacity from 50 to 85 percent. This will help ensure market competitiveness while benefiting society, Mr. Shimelis insists.

The ten-year plan intends to make use of platforms such as the anticipated AGOA (African Growth and Opportunity Act) encompassing the next five years, which the US has provided for sub-Saharan Africa, the EU’s EBA (Everything But Arms) tax and quota-free market opportunities for developing countries, as well as Generalized Special Preferential trading arrangements with Japan, China, India, and Turkey. On top of this, the African Free Trade Agreement (AFTA) will also help Ethiopia export up to 90 percent of its products to signatory countries without tariffs and quotas in the next ten years.

Regardless, Mr. Shimelis pointed out, due emphasis will be given to "priority products", based computed based on how much demand a product has in the global market, technology requirements to produce it, jobs it is posed to create, and the opportunity of diversity it offers.

To this end, agro-processing, skin and skin effects, textiles and clothing, construction inputs, basic chemical products, pharmaceutical and medical equipment, paper production (pulp production for paper input) and printing, wood products, agricultural inputs (fertilizer and pesticide), plastic / PVC and ICT have been identified as priority product areas for the first five years (2021-2025) of the ten-year plan.

Chemical products, metal and engineering products, manufacturing machines, plastic/ polymer, medical equipment, and electronic manufacturing of various components and products have been selected for the second five years (2026-2030), mainly because these require higher production skills, more resources, and infrastructure, as well as high-level of connectivity.

Building a reliable and up-to-date inquiry point information system, developing a research-based marketing chain, improving legal frameworks, and improving modernizing the ease of doing and starting a business have been identified as the main implementation strategies of the plan.

As goals of the manufacturing sector for the ten year period, expanding the manufacturing industries that replace strategic inputs, increasing the number of small and medium-sized manufacturing industries from 2,000 to 11,000, improving the quality of the product, increasing competitiveness, attracting quality investment, and focusing on high-tech industries, have been listed.

The Senior Communication Expert also said, through these efforts as well as others, the Ministry of Trade and Industry "is working ardently" to improve Ethiopia's rating in ease of doing business and place it among the top 50 countries on the scale. Ethiopia currently stands 160th out of 190 countries in ease of doing business.

Shimeles further said that the Ministry is working ardently to improve the country’s ease of doing business through increasing its DB score from 48 to 80 percent, particularly in modernizing the manufacturing industry.




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Coffee farmers in Kenya, Zimbabwe and Ethiopia suffer pandemic setback

Over 70 percent of coffee farmers in Kenya, Zimbabwe, and Ethiopia have been financially affected by the Covid-19 pandemic, a study has revealed. The report by Technoserve and Laterite surveyed coffee farmers in the three countries on the impact of the pandemic on their sources of income, their access to food and the ability to tend to their crops.

 In Kenya, 452 households were surveyed of which 57 percent were women and 43 were men. At least, 76 percent of the households had lost income due to the Covid-19 outbreak, with 31 percent lost salaried jobs, and 28 percent had lost income from the sale of excess food crops. With 18 percent of the farmers reported losing income from other non-farm business.

 “Loss of job opportunities in the coffee sector was reported as the main reason for lost coffee farming income which had a ripple effect on farming activities,” the survey revealed. This led to one in three farmers reporting difficulties implementing pest and disease management and one in four farmers facing challenges in applying fertilizer or compost.

 In order to cope with reduced incomes, 90 percent of coffee farmers had reported relying on less preferred or cheaper food or reducing the number of meals or amount of food they were feeding their families. While 94 percent of Kenyan coffee farmers believe they are worse off financially than they were a year ago, their Ethiopian counterparts were more optimistic at 70 percent reporting the same sentiments. Only 57 percent of Ethiopian coffee farmers reported a loss of income as a result of the Covid-19 outbreak.

A total of 713 coffee farmer households were surveyed with only 57 percent of them reporting lost income due to the pandemic. Three coffee-growing areas of West Guji, Jimma, and Sidama were the focus of the survey in Ethiopia.  At least 40 percent of the Ethiopian farmers experienced issues with transport when shopping for food and one in eight respondents reporting difficulty in accessing their farms.

“This had affected coffee farming as the farmers lack finances to hire labor, low availability of workers and restrictions on public gatherings,” the survey showed.  Some 88 percent of farmers were reported using coping strategies such as spending their savings and relying on less expensive food to meet basic needs.

 While 41 percent of Kenyan farmers had trouble selling crops, only 33 percent of Ethiopian coffee producers faced the same challenges. At least 77 percent of Kenyan farmers reported higher food prices compared to 67 percent in Ethiopia. In terms of access to emergency financing, women were more affected than men with 30 percent of Ethiopian women able to raise emergency finance and only 17 percent for Kenyan counterparts. In Zimbabwe, a total of 189 coffee farming households were surveyed, with a total of 85 percent of the farmers reporting lost income due to the pandemic.

 The survey reported 75 percent of farmers had lost income as they were unable to sell other cash crops other than coffee, with 28 percent could not raise funds from non-farm businesses. One in eight farmers reported going hungry due to lack of food, with 74 percent of coffee farmers reporting challenges selling crops due to fewer customers, transport restriction, and closure of markets.



The fund is an international collaboration between the UK, Germany and Ethiopia that will protect some of Ethiopia’s most vulnerable workers Addis Ababa, October 29/2020: A landmark fund set up between the UK and Germany in collaboration with the Government of Ethiopia could save thousands of jobs in Ethiopia’s textile and garments industry, while helping to support the country’s economic recovery from COVID-19. With $6.5 million invested at launch, the partnership aims to help safeguard a critical industry and protect the livelihoods of those working within it.

Through the fund, textile factories in Ethiopia’s industrial parks can apply for wage subsidies – similar to the furlough schemes operating in many countries including the UK and Germany – and incentives to reward businesses that are able to adapt in response to COVID-19. The funding announced today will kickstart the facility and the partnership may further expand its reach through additional support in the coming months.

Ethiopia’s textile and garment industry is a leading provider of jobs in the country’s manufacturing sector. However, the collapse of domestic and international demand is expected to hit the sector hard. Ethiopia’s Jobs Creation Commission estimates that between 1.4 to 2.5 million jobs could go over the next three months. At the start of the pandemic, textile and garment factories in Ethiopia’s industrial parks employed 95,000 people, with women accounting for 70% of these jobs. Job losses would have a significant impact on vulnerable households. . 

Nigussu Tilahun, Ethiopia’s Commissioner of the Jobs Creation Commission said:”The FDRE Jobs Creation Commission estimates that close to 1.4 million wage employment opportunities are under threat and approximately 1.9 million people in vulnerable employment will lose their income due to the economic shock of COVID-19. This Facility and other similar programs are crucial as they will support the factories being affected by the pandemic and help protect jobs in Industrial Parks, while slowing down the harsh economic impact”. Ethiopia’s government has put protecting jobs at the heart of the country’s economic response to the COVID-19 crisis and has been working with businesses to cope with the impact of the pandemic. Already, 13 textile firms have stopped operating due to low demand and with many firms under financial stress; the landmark fund will provide them with liquidity to maintain operations while protecting jobs.  Today’s announcement recognizes the important contribution Ethiopia’s garment and textile industry has played in the country’s industrialization strategy over the past decade. With this fund, the Government of Ethiopia and funders from the UK and Germany are working together to ensure the survival of a vital industry that will be critical in Ethiopia’s economic recovery from COVID-19.

“The COVID-19 pandemic has caused an unprecedented disruption to global business and will undoubtedly have a significant impact on the global economy on many fronts,” said Lelise Neme, Commissioner of the Ethiopian Investment Commission. “The Government of Ethiopia has coordinated efforts with donors to support businesses coping with the impact of COVID-19.  This Emergency Job Protection Facility will help elevate manufacturing companies to sustain their businesses and reduce the impact on their financial performance”.

To be eligible for the support, businesses will need to show they have experienced an economic shock and that they have a business recovery plan. Businesses will also need to commit to certain principles like adhering to ILO core labor standards. The Commercial Bank of Ethiopia will be responsible for assessing applications and disbursing the funding to factories. Continuing the international collaboration at the heart of the fund, UK Aid-funded FSD Africa will implement the project in partnership with First Consult, a leading Ethiopian consulting firm.  Dispatch


Russian wheat offered lowest in Ethiopia's 400,000 ton wheat tender

The offer was made by a local trading house. The tender had closed earlier in October with the technical aspects of offers submitted before prices. rices offered by mainstream trading houses were mostly around $320 a tonne c&f including transport to inland destinations in Ethiopia. HAMBURG: The lowest price offered in the tender from an Ethiopian government agency to buy 400,000 tonnes of milling wheat was believed to be $243.90 a tonne c&f including transport to inland destinations for Russian wheat, European traders said on Thursday.

The offer was made by a local trading house. The tender had closed earlier in October with the technical aspects of offers submitted before prices. Prices offered by mainstream trading houses were mostly around $320 a tonne c&f including transport to inland destinations in Ethiopia, with Russian and Ukrainian wheat mainly offered.

No purchase has yet been reported and the offers are still being considered, traders said. A previous tender for 400,000 tonnes of wheat from Ethiopia had closed in July with no purchase reported by traders. Ethiopia is still struggling with the impact of drought which has devastated farms in some regions. Crops in Ethiopia and elsewhere in East Africa are also suffering from swarms of locusts.



Family Milk, one of the top dairy product brands in Ethiopia processed by MB-PLC, is set to commence export of its new long shelf life product, company CEO said

Speaking to New Business Ethiopia, Hailu Eshetu, CEO of MB-PLC indicated that the company will soon be engaged in exporting dairy products, which has up to six months shelf life. “We have planned to join the export market since our establishment. Meanwhile commencing production of products with longer shelf life took us some time than we expected. Now we are producing UHT milks that have al east six months of shelf life and ready to start the export,” he said.

Located in Lafto Industrial zone in the capital, Addis Ababa, the dairy products processing company plans to start exporting products to different African countries includes: Sudan, Djibouti, Somaliland, among others. Ethiopia is one of sub Saharan African countries with a large potential in livestock, being first among African countries and 9th in the world. Livestock production in Ethiopia contributes about 16.5 percent of the national gross domestic product (GDP). However, the countries dairy industry is still in its infant stage.

Family Milk of Ethiopia to commence export

Some of the major constraints of the sector include lack of regulatory policy, lack of raw materials, and unfair competition from the informal sector, according to Mr. Hailu, who also mentioned similar cheaper imported products as challenge for the growth of Ethiopia’s dairy industry. He further noted that there are some golden opportunities to increase the milk consumption trend, which can boost income of smallholder farmers and pastoralists, as well as help to ensuring food security and create job opportunities.

Family Milk entered the market in 2002 producing various dairy products like; pasteurized milk, yoghurt, butter, and milk among others with a capacity of producing 70,000 liters per a day. It is working jointly with Singapore-based investment group Schulze Global Investments, which holds 45 percent shareholder. The remaining share is owned by the local firm MB-PLC, according to the CEO.




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