Ethiopia eyeing total import substitution of close to 100 products in 3 years: Ministry

Addis Ababa, January 2, 2024 (FBC) – Ethiopia plans to fully substitute imports of food and beverages products as well as textiles and garments in the next three years, Industry State Minister Tarekegn Bululta disclosed.

The import substitution strategy is to move from substituting short-term consumption goods by domestic products to diversification of export and import trade step by step, he added.

The ministry has been implementing its first 10-year import substitution strategy, it was learned.

Food and beverages, textiles and garments, leather and leather products, chemical and construction materials as well as metal and engineering products are identified as sectors that can be fully produced locally.

The state minister pointed out that the main focus of the strategy is to increase competitiveness of the manufacturing sector by producing imported products locally.

Currently, the manufacturing sector covers only up to 38 percent of the total domestic demand and remaining is imported.

Therefore, efforts are being exerted to change this dependence on foreign products with the help of strategy.

Some 96 products have accordingly been identified to replace the imports in the first three years of the strategy, Tarekegn said, adding that the plan is to fully replace import food and beverage products as well as textile and garments.

According to him, the development of the agricultural sector will create a favorable opportunity for the production of food and beverage products in the country and the issue of value addition will be worked upon.

In the mid-term plan of the strategy, there is a plan to produce mostly imported technology and engineering inputs in the country within five years, it was learned.

In the ten-year plan, the country will focus on producing large development requiring sectors such as metal production.

On the other hand, the current 7 percent contribution of the industry sector to the total GDP will increase to 39 percent during the 10-Year Prospective Development Plan, and the average production capacity of the manufacturing sector from the current 56 percent to 85 percent, the state minster elaborated.

Natural resources, the large number of trainable manpower and energy supply options are among the potentials that help achieve the plan, while lack of infrastructure, shortage of foreign currency, financial supply and security are the main challenges.

In the first five months of this Ethiopian fiscal year, over 852 million USD worth products were produced domestically and the nation plans to produce over 2.3 billion USD worth products in the year.