Could you give us a picture of the trade and industry sector?
As the name implies, the ministry covers two major sectors of the economy; trade and industry. In the area of trade, we mainly deal with foreign trade (import & export). The domestic trade is essentially left to the regional states. Our work is not directly operational, it has nothing to do with day to day trade activities, like all other ministries we are only responsible for monitoring, for regulatory activities, and for generating policies. Moreover, we are mainly concerned with foreign trade aspects. A general focus is given to exports because of our national development strategy. The strategy of agricultural industrialization gives priority to agriculture and a gradual shift to industry and services. The center of all these activities then remains the exports of agricultural and industrial products. In terms of industry, Ethiopia is at its infancy, its contribution is very insignificant to the national economy. Anyway, the government has given priority to small and medium industries for quite good reasons. Therefore, as a ministry we are trying to support these enterprises in both sectors. We are facilitating and creating conducive conditions for the private sector.
What are the government's foreign trade policies, and what are the main objectives of these policies?
We have the export promotion strategy. Its main objective is to support our national development strategy. We also support then the agricultural sector. Export has a very dominant role in supporting the agricultural sector, by facilitating the export of surplus of agricultural products. Without this, productivity could be decreased, because farmers would be discouraged and frustrated if there is no market to the surplus. Therefore one of our most important export strategy is to support the agriculture. Our second objective is to increase foreign currency earnings in all our economic activities. We still depend on imports for our industries and agricultural inputs. Furthermore as I said it earlier our national development strategy is to shift the agrarian economy to industrial economy. In view of this our objective is to encourage export of industrial products. We are confident and will ensure the productivity and quality of our industrial products. If an industry manages to sell it products to the international market, the products must be competitive in price and quality. Therefore the export strategy aims at encouraging efficient productivity.
Q. Concerning your export strategies, could you tell us the balance of trade and the measures taken to substitute imports?
The turning point of the changes of policies occurred in 1991. In the previous government our policies were socialistic and the economy was commanding. After 1991 the new policies emphasized and encouraged the participation of the private sector. They also limited the role of the government to very important activities such as building the infrastructure and creating conducive grounds to the private sector. Since then, the trend has been very encouraging. Both our imports and exports have been significantly growing over the last seven years on an average of 22-25% every year. These results have been achieved under unfavorable weather conditions. Of course this is a general picture, while looking into individual products, the fastest growing export products were among agricultural products and mainly coffee. The export of coffee has been growing in volumes as well as in value. However this year the international coffee price so low that it might have bad consequences for us. We are not happy about the dependence of our economy on one single product. Therefore, our export strategy aims at diversifying agricultural products. For instance good results can be obtained by adding some value to horticulture and livestock products. We claim to be first in terms of livestock population. While coming to the import substitution, it was applied with the previous government and we are not doing it. We are trying to increase export in quantity and quality, and not aiming on substitution. We believe import substitution proved to be a bad strategy, it had been tried with lots of governmental protection but had never worked.
Coming back on coffee production, as the Ethiopian economy is dependent on coffee, how do you think the price fluctuations will affect your economy?
The impact will be very serious. Our total export revenue is dependent on coffee up to 55-60%. Any price decline on coffee has a direct impact on our revenue. Currently, there is a very serious situation. However, we are trying to diversify and reduce our dependence on coffee. It does not mean that the other sectors have not grown. On the contrary, they have been growing since 1991 and coffee has grown too fast compared to the rest.
Concerning the import and export businesses, compared with Massawa and Assab ports, does the new usage of the Djibouti port hinder the development of trade and industry?
A.The change of port to Djibouti, compared to the time we were able to use three ports, has not affected the situation. Eventhough, we were using three ports eight months before, the magnitude of utilization of the Djibouti port had been very low. This was due to historical reasons. The Assab port belonged to Ethiopia and many importers had psychological attachment to this port. Drivers, transporters and exporters were too much connected with the Assab port. Therefore it was difficult to fully use the port of Djibouti until we were forced to do so. When we started to use the Djibouti port we recognized that it had a big capacity. Currently, we have increased our imports and exports through one single port more than the accumulated results of the three ports. The Djibouti port has a high capacity and better equipment. Additionally, we have a very good relationship with the government of Djibouti, which facilitated to study of the situation and minimized the constraints. First, there were certain limitations of equipment because the port was never used. However, we were allowed to buy our own equipment like packing machines, cranes and forklifts. The importers and exporters were allowed to have their representatives and transporters. Certain important government institutions like Quality and Standard Authority, Coffee and Tea authority were also allowed because of their relevant activities at the port. All these were not possible while using the port of Assab. Moreover, the tariff costs, including the port cost are better than the Assab and Massawa ports. Therefore we are now well and better off than when we were using three ports.
| As a minister you likely know that an increasing number of foreign companies are showing interest into you sector. Do you think that this will continue in the future, and what measures should be taken to promote the development of the sector and attract foreign investors?
I am very confident that the flow and interest of foreign investors will increase. The progress and making conditions conducive to foreign investors have been very significant. We have improved our policies and laws for foreign investors for time to time. Secondly, we have a stable government, which looks after the interest of the people, it can also guarantee foreign investors to come and invest. Thirdly, we have quite a variety of natural resources that are easily attainable. Our labour force also is inexpensive. Therefore the flow will keep increasing.
What are the measures taken to promote your sector?
We are amending our laws and policies to make them more acceptable. We are also undertaking promotional activities. These include bilateral relationship with different countries, signing investment guarantee agreements, and double taxation avoidance agreements. Our embassies have the major task of promoting business relationships, more than being indulged in political activities. Moreover, we are planning to participate in expo-2000 in Hamburg, Germany. This participation is expected to bring forward our true image to the rest of the world. Incidentally, I am the commissioner general for expo-2000, and I have been preparing for the last two years. We are now well advanced in our preparation. We will present Ethiopian cultural and historical background, its ancient civilization, and its skill and know-how in agriculture that was contributed to the world. For instance, Ethiopia has played an important role in bio-diversity. The participation of peasants in preserving seeds that can stand crop diseases and that can be more productive will be shown. We will also present our tourist attractions.
Our readers are always interested in knowing new business opportunities. Could you mention the opportunities in trade and industry?
In industry not much has been done, so there are a lot of opportunities. The market is vast because of our big population. We are strategically located near the Middle East. We can produce things they do not have in an affordable price. These products are livestock products, agricultural products and agro-industrial products. Additionally in terms of trade we are not exploiting our product. We are not even exploiting the potential of coffee production. The coffee market has been growing tremendously, but we have not still tapped the available potential. Foreign investors can then add value to the coffee by roasting, packing and directly selling it to the world, instead of being involved in its production. We have untapped resources that can be good attraction.
How confident are you about the future of Ethiopia?
I can see a very bright future. We look forward to our enhanced growth and getting our name out of the list of the least developed countries. In the past 6-7 years we have experienced the GDP (gross national product) growth, very low inflation rate, and very sound macro economy policies. We are very confident of the future Ethiopia.
As a personal question, could you tell our readers your personal background?
I had my first degree in mechanical engineering in 1973, then I did my MS degree in triabology and machine design at Leeds University in the United Kingdom. Starting quite after my first degree, I worked in the biggest sugar factory of Ethiopia for 10 years. Then, I joined a state owned industrial consultant enterprise, and stayed there for about 8 years. I had a practical aspect from the factory, a typical mechanical engineering experience, and my 2nd job completed my experience. I also worked at the Prime Minister office, as the head of productive and supportive bureau for two years. My job was to look after all the important economic sectors including agriculture, industry, construction, and mining. At that same time I was a provisional general manager of the Ethiopian Road Authority, for a short period of time. I liked it there because it is a huge institution with over 15 000 employees. Finally since August 1995 I am the minister of trade and industry. I am married and father of 2 daughters.
What have been your most satisfying achievements as a minister?
It is difficult to enumerate. Every day of my work is fascinating. There were quite a number of things to be done, but there was always an alert supervisory institution that was looking after the sector. New policies and laws needed to be issued and improved. The problems of the private sector also needed to be attended. The trade sector particularly has been very interesting. Coming to the industry sector, we have given priority to the micro and smaller enterprises for two major reasons. Firstly, the sector was never given any attention by the government. Most of the operators in that sector were doing the jobs of their grandparents without any improvements, just because they did not get any support from the government. Secondly, the number of the people engaged in that sector is so high, next to agriculture, that we had to plan and handle strategies to develop the sector.
What is you final message to our readers found all around the world?
Ethiopia is a country that looks forward to their partnership. We have a lot to offer and all the necessary elements for investment. I invite them to explore for themselves. |
