Handbook of Industrial Development

Handbook of Industrial Development
File Size:
3.87 MB
Mulu Gebreeyesus, Biniam Egu Bedasso, Gidisa Lachisa, Ephrem Andargie and Fikru
01 March 2016
312 x


Modern economic history has proven time and again that the socioeconomic transformation of a certain society can rarely be achieved without industrialization. The astounding success of several Asian economies over the past half-century stands as a glaring evidence of the role of industrialization as the surest way to reduce poverty. However, industrialization is not a structural inevitability. Industrialization requires careful management of policy options and consistent monitoring of sectoral dynamics.  

Ethiopia has long been struggling to attain structural transformation in a way that will reduce its dependence on the agricultural sector. There has been a growing consensus among policymakers in the country over the past decade that sustainable poverty reduction cannot be attained without rapid industrialization. Accordingly, the country had formulated a comprehensive industrial development strategy in 2002/03, which was implemented through successive national and sector development plans. The country continues to aim for greater industrial development as it has particularly placed the strategy of promoting light manufacturing at the centre of its Growth and Transformation Plan II to be implemented over the period of five years, 2015-2020. To that end, the government has recognized the need for implementing an effective and coherent industrial policy.  

This handbook provides an overview of industrial policy and development in Ethiopia over the past decade and half since the launch of full-fledged industrial policy by the incumbent EPRDF government. We have noticed that there is a lack of a quick reference document on industrial policy of the country. Such a reference will ideally consist of, inter alia, a compilation of policy and strategy documents on the industrial sector issued by the government at different points in time. The availability of such a document is important for at least two major reasons. First, it keeps all stakeholders on the same page regarding the evolution of industrial policy in Ethiopia. Second, it facilitates the effort of policymakers to ensure policy coherence around the central objective of industrialization. Hence, the first chapter of the handbook offers a short summary of industrial policies and strategies in Ethiopia since the introduction of the first comprehensive industrial policy document in 2002. This chapter covers all national and sectoral development plans adopted over the past 13 years. Parts of those official documents which are deemed relevant for industrial policy are presented as they are. In that sense, the aim is not to provide our own interpretation of the polices and strategies but to make them accessible in a single place.  

The second chapter of the handbook aims to review the structure and performance of the industrial sector during the period in which various forms of industrial policy have been implemented in Ethiopia. The analysis is based on data from the Central Statistical Agency (CSA) and other organizations tasked with monitoring indicators of industrial performance and trade. Other reports and academic papers might have already covered many of the descriptive statistics we have presented in chapter two. However, those studies are less likely to generate a whole set of indicators, as we have done in chapter two, for the entire period when industrial policy has been in action. Moreover, this is arguably the first attempt to juxtapose in a single document the parameters of the industrial policy framework with a broad set of performance indicators. 

A handbook of industrial development in Ethiopia would not be complete without an overview of the academic literature produced on the subject matter. Therefore, the third chapter presents a series of brief abstracts of a number of studies that have been published over the past few decades on the industrial sector in Ethiopia. The summaries provide a window into a critical and rigorous analysis of the industrial sector in general and the manufacturing sector in particular.  

This handbook is expected to serve as an accompanying document to academic and policy works on industrial development in Ethiopia. There is a range of potential users of this handbook including policymakers, civil servants, academics and private sector actors. The Ethiopian Development Research Institute (EDRI) will endeavour to continue updating this document in an online platform by maintaining an active database of policy parameters, performance indicators and academic articles on industrial development in Ethiopia.  

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