The government of Ethiopia was at risk of not meeting the ambitious targets of its five-year Growth and Transformation Plan (GTP I), including an 11-15% growth in GDP and accession to the World Trade Organization. To ensure Ethiopia could achieve the goals laid out in the plan, the Korean International Cooperation Agency engaged Dalberg to support Ethiopia’s Ministry of Industry in identifying high-potential sectors that could serve as engines for the country’s economic growth.

OUR APPROACH

We began by applying customized diagnostics to find new product and export opportunities in three key industries that align with Ethiopia’s competitive advantage and resources: textiles and garments, leather and footwear, and food processing. Our team then interviewed government, business, and policy representatives to understand the constraints that could keep these industries from growing. Throughout the industry and policy research and interviews, we focused on the role of small and medium enterprises (SMEs). In-depth industry consultations with SMEs showed us what regulatory environment and support small businesses need to develop and sustain competitive advantages in each industry.

We presented our recommendations to the client in the form of an action plan, with recommendations on specific initiatives proposed to remove growth constraints, jumpstart development, and ensure even the smallest businesses in each industry will thrive.

RESULTS

The action plan we created was reviewed by the Ministry of Industry and used to inform a range of actions to accelerate achievement of targets set in GTP I, as well as actions defined in the next Growth and Transformation Plan (GTP II) for 2016-2020. The action plan jump-started the creation of a number of initiatives, including strengthening the industrial policy planning unit within the Ministry of Industry, creating the Ethiopian Industrial Parks Development Corporation, and updating regulatory framework to grant allowances to foreign investors in targeted industries.