Ethiopia's industrial development strategy: the missing link of domestic supply chains
via The Reporter Ethiopia19 min read
Ethiopia's industrial development strategy, which aims to integrate into global value chains and promote export-oriented manufacturing, faces a critical challenge due to the underdevelopment of domestic supply chains DSCs. Despite significant investments in industrial parks and efforts to attract foreign direct investment, the country continues to rely heavily on imported inputs, even for products abundantly available domestically, such as cotton, hides, and skins. This paradox highlights a disconnect between agricultural production and industrial processing. The article argues that robust DSCs are a prerequisite for maximizing the benefits of investment and global value chain participation, rather than a byproduct of industrialization. It suggests that successful export-led industrialization requires deliberate policies to build strong domestic productive foundations, including investments in rural infrastructure, quality standards, access to finance, and modern technologies like digital traceability. The authors emphasize that active government intervention and strong institutions are essential to address market fragmentation and coordination failures in developing efficient DSCs, which are crucial for local value addition, job creation, and sustainable economic growth.
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This summary was AI-generated from a story originally published by The Reporter Ethiopia.
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