The Ethiopian Manufacturing Sector: Competitiveness and the way ahead

Course ID
Ethiopian Economics Association (EEA)
Admit Zerihun

The history of Ethiopian manufacturing industry more or less related with the post Ethio-Italy war. In the second half of 1940s there was very little manufacturing industry, which accounted only 1% of the national income. In proper sense industrialisation begun in the 1950s and consolidated following the three successive five-year developments plans.

With regard to policy environment, following the Mutual Aid Agreement of 9 August 1943 with the USA, the Ethiopian government asked for a USA technical mission to be sent to Ethiopia to investigate the country’s resources and its economic problems and to draw up an aid package for its development. The mission arrived in May 1944 and with the help of them the Ethiopian Government initiated a ten-year programme of industrial development (1945-55). This was followed by the three successive Five-Year Development Plans (1958-1962, 1963-67, 1969-74). With respect to industrial development, the recommendation was import substitution.

The government placed much hope on the contribution of foreign capital. This was evident from its first measure in the area of economic policy, which gives much emphasis on foreign direct investment. The issuance of Notice for the Encouragements of Foreign Capital Investment, in 1950, reveals less concern for indigenous investment. This kind of policy gives a lot of incentives for foreign investors, which was not available for existing or potential local investors until the issuance of the Investment Decree of 1963 and the 1966 Investment Proclamation. Despite the first five-year plan and the investment proclamation emphasis on the role of local investors, the 1966 investment Proclamation provides a lot of incentives for those investments not less than $200000, which was beyond the reach of most local investors

Corporate Author: Alemayehu Seyoum … [et al.] (editor)
Publisher: Ethiopian Economic Association (EEA)
Primary Descriptors: Investments; Private Enterpenurship
Secondary Descriptor: Manufacturing Industry
Geographic Descriptors: Ethiopia
Cataloge Date: 02/27/2013
Broad Subject heading: Industry Policy
Call Number: 330.963 PRO 2005
Serial Key Title: Proceedings of the Second International Conference on the Ethiopian Economy
Publication catagory: International Conference
Content type: EEA Publication
Volume: I
Publication date: 2013-05-27 23:05:00
Forum or Discussion date: 2013-02-27 14:55:44
Place of publication: Addis Ababa, Ethiopia
Type of material: Book
Current frequency: Annualy
Author: Admit Zerihun and Getneh Alemu

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