Presentation at UNIDO’S Seminar on“Sustainable Industrialization for Shared
Prosperity”
UNIDO’s Programme for CountryPartnerships(PCP): The Case of Ethiopia
By
Markos Tekle Rike, Ph.D
Ambassador of F.D.R. of Ethiopia to Japan
Japan, Tokyo
May 14, 2015

Presentation Outline
I.

Introduction: National Development Priorities andIndustrial policy

II.

Growth and Transformation Plan (GTP)

III.

Industrial Development Strategies

IV.

Programme for Country Partnerships (PCP) in Ethiopia

V.

V. Ethiopian Government‘s commitment to promote
Programme for Country Partnerships (PCP)

VI.

VI. Scaling up investments for PCP Ethiopia projects

VII. UNIDO Projects

Funded by Japan

VIII. Business and investment promotion activites by UNIDOITPO Tokyo office and Ethiopian Embassy in Tokyo

I.

Introduction:PrioritiesandNational Development
IndustrialpolicyEthiopia aspire to embrace manufacturing since 1920s

the sector started to get momentum in the 1950s (after brief disruption in theWWII period)

Manufacturing Industry intensified in the 1960s

Successive regimes adopted different policies for the development of industry



Dictatorial military regime discourage private sector and hampered the growth ofinfant industryNationalized enterprises run inefficient industries with state subsidies and heavy
protectionPrivate enterprises reduced to small and micro levels

Various industrial development planes failed including the 10 year perspective plan

Introduction: cont...
 The first decade (1991-99) marked by various reforms reversing

the command economy
 Implemented

three phases of IMF/WB sponsored reformprograms
 In 1998 government adopted Export Promotion Strategy
 Privatizationof(inefficient ones)

 A

previously

nationalizedindustries

full-fledged Industrial Development Strategy (IDS) wasformulated in 2002/03Introduction cont…
 Concretized into action by various sub-sector strategies and by

the successive development plans such as; SustainableDevelopment and Poverty Reduction Program(SDPRP) 2002/03-2004/05 and thePlan of Action for Sustainable Development andEradication of Poverty (PASDEP) 2005/06-2009/10.

 The Growth and Transformation Plan (GTP) 2010/11-15/16

 Agricultural Development Led Industrialization (ADLI) :a two-sided strategy, integrating:• External sector (export -led part)• Internal sector (forward and backward relationship b/w
agriculture and industry)II. Growth and Transformation Plan (GTP) Growth and Transformation Plan (GTP)I (2010/11 -2014/15); GTP 2(2015-2020) under preparation
 The first of a three five-year plan to propel the country toward aclimate resilient middle income status
 Places special emphasis on agriculture and rural development,
industry, infrastructure, social and human development, as well
as democratization and good governance The Growth and Transformation Plan (GTP) has the following

main Objectives:
 Maintain at least an average real GDP growth rate of 11% andattaining of MDGs;
 Expand and ensure the qualities of education and healthservices sectors and achieve MDGs in the social sectors;

GTP cont…

GTP cont…

 Establish suitable conditions for sustainable nation buildings

through the creation
developmental state; andofstabledemocraticand Ensure

the sustainability of growth by realizing all theabove objectives with in the stable macroeconomicframework.

 GTP sets ambitious targets for improvements in trade logistics

by rolling out the authorized economic operator programme
across export-oriented industry parks, and by improving themain export corridor to Djibouti.

III. Industrial Development Strategies
Three policy documents are prepared to
guide intervention in industrial development: The Industrial Development Roadmap (IDR)
 provides

a strategic framework for industrial
development for the next ten years;
 The Industrial Development Strategy Plan (IDSP) defines strategies, programs and projects for the
implementation of IDR; and,
 The Industrial Development Institutional Setup(IDIS),
 provides an institutional framework for industrialdevelopment.

The Industrial Development Strategy (IDS) principles
 The IDS is based on a broader development vision - ADLIThe philosophy of ADLI is that agriculture development
plays a leading role in the industrialization process by
preparing various conditions for full-fledged
industrialization
Primary principle of IDS is the linkage b/n industry &agriculture Other principles
 Export oriented sectors should lead the industrial

development and be given priority
 Labor intensive sectors also be given priority to maximize
employment
 Public-private partnership – gov’t not merely as a
facilitator but also as a leadership

Ethiopia
 Why light and labor intensive Manufacturing is apriority for Ethiopia?

 Easily trainable labor force (532 TVETs are creatingclose to half a million medium skilled labor force) Potential for cheap renewable electricity
 Favorable legal and institutional environment Huge potential for raw materials for labor intensive
industries (cotton, hides and skins, mines, cash
crops and food products

Ethiopia cont…


Establishing industry zones and developing Industrial parks are the sought tobe the successful mechanism to provide comprehensive infrastructural andlogistic support to investors

Number of industrial parks proved the success and many more parks are underdevelopment in around Addis Ababa and the country’s Eastern and Southerncorridors


Kombolcha

Dire Dawa



HawassaIndustrial Zones…
Bole-Lemi Industrial Park

Industrial Zones…

Mechanisms of engagement
 Mechanisms of engagement with the private sector (1)Creating conducive environment
 (2)Direct support for selected sectors

 The IDS identified a number of concrete intervention areas tocreate
conducivebusinessmacroeconomic stability

environment

maintaining

 building a functioning and well-regulated financial sector
 creating dependable infrastructure services; developing skilled and effective human resource; creating efficient civil service and legal framework; developing

industrial zones in major cities and towns with all
required infrastructure facilities

UNIDO Response
Focus of UNIDO’s assistance to Ethiopia:
 Technical assistance in agro-processing (incl.

leather and textile)
 Support to industrial policy/ strategy

development, Institutional and human capacity building, Investment promotion,
 Product Quality and Standardization

IV. Programme for Country Partnerships (PCP) in Ethiopia
Ethiopia selected as one of the two African pilot countries for ISID
implementation:
Reasons for selection: UNIDO’s longstanding and good partnership with theGovernment
 Stable Country with a clear National Development vision andrelated macro-economic Strategy focusing on industrialization
promotion, strong institutions and conducive environment fordoing business.
The PCP is closely aligned to the Growth and Transformation Plan (GTP) andthe Industrial Development Strategy of Ethiopia.

Areas of UNIDO’s engagement were selected based on the country'spriorities, relevance for growth and poverty reduction, as well as UNIDO’scomparative advantage and potential for building partnerships, and synergies
with other development actors.

Contn…


Ethiopia selected as one of the two African pilot countries for ISID
implementation:
Major Focus areas: Leather and leather products
 Textile and apparel Agro-Food processingThese industrial sectors hold the prospect of employment for lowskilled young people, increased export earnings, benefits to local
SMEs, and strong backward linkages to the agricultural sector, creating
market opportunities for smallholder farmers.

These sectors will also attract investment for businesses that intend totake advantage of cheaper labour costs and preferential access tolarge markets, such as those in the USA and EU (through the AGOA andCotonou Agreement).

Contn…


Cross-cutting interventions: Capacity building Energy and environment
 Investment and industrial zones
 Trade facilitation

PCP Implementation structure National Task force, comprising key Government Ministries, theprivate sector, development partners under active establishment
 Technical branches at UNIDO HQs
 UNIDO Regional Office PCP unit (under establishment) within Ministry of Industry

V. Ethiopian Government‘s commitment to promote
Programme for Country Partnerships (PCP)

The prime minister’s conformation of the commitment of his government to theimplementation of the programme (showing great ownership of the Programme)

The Ministry of Industry has established a National Technical Task Force comprisedof representatives of different ministries and institutes, as well as from theprivate sector.

A High-Level Joint Steering Committee has also been established under theleadership of the Prime Minister.



It is co-chaired by the Ministry of Industry and the Ministry of Finance andEconomic Development.

The committee is composed of heads of development finance institutions (DFIs),development partners and representatives of international companies operatingin Ethiopia.

Contn…
 The national task force focuses on the execution ofprojects and programmes.
 The High-Level Joint Steering Committee is expected

to provide strategic guidance on the implementationof the PCP, prioritize projects and programmes, andallocate resources for the execution of the PCP.
 The

Ministry of Finance and Economic Development
has been coordinating work with a range ofdevelopment partners and DFIs for the implementationof the PCP and that the programme is in line with thecountry’s growth and transformation plan.

VI. Scaling up investments for PCP Ethiopia projects
 A

platform for discussion with the International Bilateral andMultilateral Financial and Technical Partners has been set up forcoordination and funds mobilization purposes.

 A numberof commercial banks and DFIs have indicated theirinterest in scaling up investments in projects that feature under
the Programme for Country Partnership for Ethiopia.
 Integrated textile plant in Adama and Modjo Leather City projects

are on the pipeline for possible financing

VII. UNIDO Projects Funded by Japan
1. One Village - Industrial Cluster

Major Achievements:
 A combined approach of One Village One Product (OVOP) andUNDO cluster development approach, (One Village- IndustrialCluster) OVIC Contributed to the success of the Spanish MDG-F JointProgramme on Edible Oil Value Chain in Bahir Dar / AmharaRegion

 Successfully initiated bamboo value chain development inHawassa/ Southern Region

 Final report prepared to conceptualize the good experience as

an innovative approach for development of SMEs

Contn…
2 Ethiopian Advisory Programme by UNIDO ITPO Tokyo, started in Nov.2013
 Objectives:- Support investment and business development activities of Japanesecompanies in Ethiopia,- Enhance the flow of technology transfer from Japan to Ethiopia.
 Major Achievement: - More than 30 Japanese companies received support and advisory
services to develop their existing and planned Investment/business
in Ethiopia.

Success Stories of the Advisory program in Ethiopia
Six companies became successful in utilizing advisory program inEthiopia

Contn...
3. Pipeline Programmes Projects
1)

Edible Oil Value Chain Enhancement Joint Programme ( 2nd Phase),2)

Waste Management in Ethiopia and the Sustainable Use of Animal Bones

3)

Development of Fishery Value Chain around Tana, Abaya and ChamoLakes

4)

Transforming Livelihoods in the Communities of Ethiopia through Value
Addition to Fisheries Resources

5)

Productive Work for Youth and Women through MSME Promotion inEthiopia

6)

Valorization and improved sustainability and inclusiveness of theEthiopian coffee value

Business and investment promotion activites byUNIDO ITPO Tokyo office and Ethiopian Embassy inTokyoUNIDO ITPO Tokyo office and Ethiopian Embassy in Tokyo have closely
coordinated in promoting business and investment

Successful events with significant number of audiences have contributedin boosting Ethiopian business and investment climate in JapanBusiness and investment seminars in Tokyo, Nagoya and Osaka in Decemebr2013Agribusiness and investment Seminar in Tokyo on 29 May 2014

Ethiopian Light Manufacturing Workshop held in Tokyo on November 25 2014

Business and investment seminar held as a side event of inaugural flightbetween Narita and Addis Ababa.

Thank You!