Ethiopia's strategic push to replace imported goods with domestically manufactured products is yielding significant results, saving the nation crucial foreign currency and invigorating the local manufacturing sector, according to the Ethiopian Enterprise Development (EED).
The EED highlighted the substantial progress made over the past nine months, attributing much of the momentum to the vital role of small and medium enterprises (SMEs).
Deputy Director General Abdulfeta Yesuf reported that targeted programs aimed at curbing reliance on imports have demonstrated impressive effectiveness. Over the last nine months, the EED provided support to 1,451 enterprises focused on import substitution. These businesses successfully produced 902,191 tons of substitute goods, translating into a remarkable saving of $1.6 billion USD in foreign currency for the country.
Beyond meeting domestic demand, the EED is also actively working to enhance the global competitiveness of Ethiopian industries. These efforts have already generated an additional $57 million USD in foreign currency earnings, signaling the growing capacity of local manufacturers to penetrate international markets.
Empowering SMEs stands at the heart of this success story. The EED reported the establishment of 2,752 new small and medium manufacturing enterprises within the first nine months of the current fiscal year. Furthermore, 1,012 manufacturing enterprises successfully transitioned from small to medium and large-scale operations, indicating a maturing and strengthening industrial base. To bolster these crucial businesses, the EED facilitated market linkages valued at 10 billion Birr over the same period.
Recognizing the diverse needs across the manufacturing spectrum, the EED provided tailored industrial extension services to 14,183 enterprises. Addressing access to finance, identified by Abdulfeta as a key challenge, remains a priority. The EED has facilitated over 6 billion Birr in working capital loans for 1,209 SMEs and enabled 889 enterprises to acquire essential machinery valued at over 4.3 billion Birr through lease financing arrangements.
The drive towards rural industrialization is also gaining traction, with 205 new industries established in rural areas over the past nine months. This decentralized growth is not only boosting production but also creating substantial employment opportunities, with approximately 151,000 jobs generated within the broader enterprise development sector.
While acknowledging persistent hurdles such as limited access to credit and finance, workspace shortages, skill gaps, market linkage issues, and the need for improved coordination, Deputy Director General Abdulfeta expressed optimism about the future trajectory. He noted the presence of a supportive policy framework and ongoing efforts dedicated to resolving financial supply challenges. According to EPA, the successful revival of 518 previously non-operational industries further underscores the inherent potential for growth and resilience within Ethiopia's manufacturing landscape.