Manufacturing in Ethiopia’s 5 years plan began in 1957 to the present which shows that the country wanted to expand its economy to alleviate poverty and compete with the biggest market in the world.

The value of exports and the Ethiopian textile and garments industry has increased rapidly from USD 10 million to 120 million during the past ten years and Ethiopian government aims to boost exports. By focusing on social and health standard of staffs and the environment, Ethiopian made clothes can be international competitive and acknowledged in the long run.

Ethiopian government has identified several strategic investment areas as a priority that deserves incentives in order to attract the private sector.  One of the major areas that are currently enjoying a significant amount government incentive is the manufacturing sector. With the objective substituting the bulk import of manufactured products, which is consuming the already scarce hard currency of the country, the government has been providing incentives for the private sector interested to be engaged in a range of light industries.

Agro-processing such as production of textiles, leather and food processing and packaging are identified by the government as strategic sectors that have the potential to create a huge amount job while supporting the agriculture sector that mainly depend on small scale farmers, who provide  their products as an input for these industries.

In addition, the government has also been encouraging the local production of medicines and chemicals, with the main intention of saving the several hundreds of millions of hard currency the country spend in importing the products and facilitating the technology transfer in the sector.

According to report of the World Health Organization (WHO), local production of generic medicines promises affordability, accessibility and availability of needed drugs.