Ethiopia’s Export Sector Weak & Small to Contribute to Structural Transformation – World Bank

27 Aug

Posted by The Ethiopia Observatory (TEO)

    Ethiopia’s export performance has fallen increasingly short of GTP targets, reaching a new low of just 25pc

As the Growth & Transformation Plan (GTP) period draws to a close, Ethiopia continues to lag far behind its lofty ambitions. The latest Ministry of Industry(MoI) report, yet to be released, indicates that the country, which targeted an export revenue of 1.6 billion dollars from the manufacturing sector in 2013/14, ended up with a dismally low 398 million dollars – just 25pc of the target. The revenue, nevertheless, does show an improvement of 41.5pc compared to the performance of the previous year.

A damning report from the World Bank(WB) released in July, 2014 – the Third Ethiopia Economic Update, which focused on the export sector – claims that Ethiopia’s overall Doing Business performance was on the decline and that it “lagged behind its peers in Global Competitiveness rankings and trade restrictions are biased against exports”. The Update added that Ethiopia is under-tapping available trade preferences, offering “a narrow window of opportunity for diversification”.

According to the WB, recent drops in commodity prices have meant that Ethiopia just had its worst export performance in a decade. The Ministry had expected nothing more than a minor disappointment, and thus only revised its target down to 1.3 billion dollars at the beginning of the fiscal year – a sum still 900 million dollars above the actual performance. The woes of the sector still remain, with the country’s inability to deliver basic inputs, such as cotton and skin; persistent power outages, and poor management and labour productivity, among others, according to the Ministry’s own report.

Read the full article on Addis Fortune

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