By YETNEBERK TADELE
Addis Fortune source: http://addisfortune.net/articles/manufacturing-sector-seeks-boost-in-new-institutions/
Country hopes training workers will bridge gap between target and actual earnings.
Tadesse Haile, state minister for Industry.
In a bid to uplift the manufacturing industry, the Ethiopian government is set to establish two new institutions, once the Council of Ministers grants its approval.
The institutions will be formed for the food and beverage as well as the pharmaceutical and chemical sectors, which are currently managed at the Directorate level under the Ministry of Industry (MoI).
The institutes that will be expected to be operational in the coming fiscal year are the Food, Beverage & Pharmaceuticals Industry Development Institute and the Chemicals & Construction Materials Development Institute.
“This is the result of the government’s plan to transform the manufacturing sector,” Tadesse Haile, state minister of Industry told Fortune. “It does not fare well even in neighboring countries.”
Despite the notable growth trends in basic manufacturing figures recorded over the last decade, the sector essentially remains weak. The level of industrialization in the country is very low, with the shares of the manufacturing sector accounting for hardly five percent of Gross Domestic Product (GDP). Manufactured exports account for a meager 0.5pc.
This is according to the findings of a draft study conducted by the Ministry of Industry (MoI) in January 2012. The purpose was to assess the competitiveness of Ethiopian firms for participation in the Common Market for Eastern & Southern Africa (COMESA) Free Trade Area.
The government needs the institutes, according to Tadesse, in order to help the manufacturing sector strengthen its weaknesses.
In an effort to turn the vision of the government for the manufacturing sector into a reality, as was envisioned by the late Prime Minister Meles Zenawi, the Ethiopian government established the Leather & Leather Products Technology Institute (LLPTI) in 1999. It was created with the main objectives of training professionals, conducting research, rendering consultancy services, and providing technical support.
Two years letter, the government established the Textile Industry Development Institute (TIDI) to seize the competitive advantage and potential of the country to further develop the textile industry.
When it became further alarmed by the weak state of the manufacturing sector, the government established the Ethiopian Metal Industries Development Institute (EMIDI), in 2010. This too, was initiated to help in the development and improved competitiveness of the metal and engineering industries.
Despite their good intentions, however, the three institutes, which have lacked trained professionals as well as capacity, were unable to bring about the changes officials were expecting.
The government’s ambitious plan for the manufacturing sector received heavy blows in the 2011/12 fiscal year, according to the export performance report published by the Ministry of Trade (MoT). It shows textiles registering the lowest export figures at 49.4pc bringing in 84.6 million dollars while leather and leather products which brought 112 million dollars, achieved 54.5pc of the plan.
The pharmaceuticals and chemicals sectors are no different.
Pharmaceuticals and chemical products earned seven million dollars out of a targeted 11.9 million dollars, which is 58.7pc during the 2011/12 fiscal year.
“The three institutes the government established to boost the manufacturing sector are really not expected to be effective mainly because of lack of skilled manpower and technological transformation, said Mebrahatu Meles, (PhD), director of the Private Sector Development Project at MoT.
“Since we learned so much from previous failures we will improve in the future,” he added.
The Meat and Dairy Technology Development Institute, which currently is under the Ministry of Agriculture (MoA), will be merged with the Food, Beverage & Pharmaceuticals Industry Development Institute once it becomes operational, added Mebrahatu.
The Food, Beverage & Pharmaceuticals Industry Development Institute, will be tasked with uplifting the most dominant branch within manufacturing sector and along with the Chemicals & Construction Materials Development Institute, will be accountable to the MoI.
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