Addis Ababa, April 17, 2025 (FMC) – Ethiopia’s Ministry of Industry reported that ongoing macroeconomic reforms have significantly improved manufacturing performance by increasing access to foreign exchange and financial resources.
The ministry emphasized that the wide-ranging economic reforms implemented since July 2024 are yielding tangible results, revitalizing the manufacturing sector and contributing to the country’s broader goals of sustainable growth and prosperity.
State Minister of Industry Tarekegn Bululta stated that the reforms have addressed a major bottleneck for the manufacturing industry, the shortage of foreign exchange, enabling industries to access better inputs and boost production.
As a result, he said, the capacity of many previously closed or underperforming factories has been restored and significantly improved, with the sector’s overall production capacity increasing by over 60 percent since the reforms began.
The government’s import substitution strategy is yielding significant results, with 3 billion dollars’ worth of domestically produced “proxy products” generated in the first nine months of the current fiscal year, the state minister stated.
According to him, this success is exemplified by the local production of essential infrastructure components like electrical poles, cables, and transformers, now utilized in projects such as the Addis Ababa corridor.
This move is effectively reducing import dependency and bolstering the growth of local industries.
Tarekegn highlighted that the manufacturing sector has generated 276 million dollars in export revenue during the current fiscal year, marking a significant 18 percent increase year-over-year.
However, he stressed that substantial potential for further improvement remains.
The government has allocated 76 percent of its loans to the private sector, aiming to further stimulate industrial growth and this initiative has attracted both domestic and foreign investment, leading to the creation of numerous job opportunities to tackle financing challenges within the sector, the state minister underscored.
The sector is expected to achieve 12 percent growth, supported by favorable macroeconomic conditions and government incentives, in addition to ongoing tax relief measures, a new investment strategy is also being prepared to further encourage manufacturing expansion, he told ENA.