Gov't, Private Sector Preparation Key to Make Fortune of AfCTA: Industry State Minister

Addis AbabaMay 02/2018 A joint preparedness of both the government and private sector is crucial to make a fortune of the African Free Continental Trade Agreement (AfCTA) signed by 44 members countries of the AU including Ethiopia, State Minister of Industry said. The AfCTA is the largest of its kind next to World Trade Organization (WTO) and is expected to boost the current 10 percent intra-Africa trade, which is lowest, compared to the EU and Asian block that has reached 65-70 and 45-50 percent respectively. State Minister of Industry, Mebrahtu Melese exclusively told ENA that if properly utilized it will bring a transformational change from commodity exporter into producer of value added diversified products. As it certainly is not a freefall, appropriate industrial policies that can boost especially the manufacturing sector, attract investment with no less focus on producing skilled human capital is of paramount value, he added. "Let us listen to the private sector concern, let us prepare them. Therefore, we need to have a joint plan, implementation and evaluation so as to compete as a country and all need to rally behind this," Dr. Mebrahtu stressed. Government can support the private sector with various reforms and incentive packages, he said, and added "but at the end of the day if they are not ready to withstand any competition and determine to go inside and move along, government cannot replace the private sector to compete on their behalf." Furthermore, he added that the private sector has to be prepared to see what it takes for all the changes to come, since business as usual will not persist. "If they are not going along with these changes with the needed psychological preparedness, definitely there will be a knock out effect in the market competition down the line," Stating that the country is embarking on developing industrial parks and different incentive packages, he pointed out "we need to expedite this process to make sure the demand is accommodated and addressed very well." "However, this does not mean that we do have enough in all; we need to go and see the tax reform, the finance for transformation that also needs to go a long way," he noted. According to the State Minister, the quality, standard, productivity issues as well as the wage productivity ratio issue are very fundamental for Ethiopia to be competitive both in domestic and foreign markets. Speaking of aligning pertinent strategies to the existing one, Dr. Mebrahtu emphasized "as we are in dynamic environment, we have to constantly check and update the policies for incentive and fiscal and non-fiscal incentives." Former Investment Commissioner, Fitsum Arega said on his part that private sector should be encourage to look into partnering among themselves, within the continent or other country investors otherwise it is going to be tough. "When it comes to competition, I think, it is going to be tough especially for local manufacturers wherever they are unless they are exposed, well equipped and fit enough to compete with European, Western, Asian whoever comes in a better position," Fitsum pointed out. Having said that the weak ones get out of the competition and leave way for those who are well prepared, he urged the private sector to prepare effectively. The free trade agreement helps to integrate and interconnect countries by way of supply chain management, he said, and added "in terms of FDI, it helps to increase the inflow of direct investment as they will get better market opportunity." "Unless we do invest a lot in infrastructure to connect us in railways, roads in the short-term it may not be affecting us much, but medium to long-term it is going to be," Fitsum warned. Ethiopia is attractive in many ways including labor, power and many more but logistics is the challenge, he revealed, Fitsum assumed that adjustment by the way of joint venture with well equipped ones and reforming Ethiopian Shipping and Logistics Enterprise to solve the problem.