Day 1: Country Session – Ethiopia

Chaired by Pramila Krishnan (University of Cambridge and the IGC), the Ethiopia Country Session was opened by Professor John Sutton (LSE) who described the progress IGC has made with reforming the Ethiopian Investment Commission (EIC). He also discussed why Ethiopia has a real chance of industrializing in the next decade. The key indicators include Ethiopia’s potential to set up the middle manufacturing base which is crucial for industrialization. For instance, 80% of jobs come from the 10% of mid-size and large firms. He further noted that the EIC has become more competitive and efficient in recent years as a result of IGC’s engagement with the EIC. This has been recognized by the government of Ethiopia, and the EIC has been promoted from an Agency to a Commission. Thus, the EIC is now directly responsible to the Prime Minister. As a result, the EIC’s responsibilities have been extended to include Export Promotion and Export Zones. In his closing remarks, he highlighted potential areas of future engagement with the EIC, including a planned series of DFID-funded projects which will provide support for the new Export Promotion section of the EIC.

Douglas Gollin (University of Oxford and IGC) raised an interesting question about how to integrate structural transformation in developing countries. He provided empirical evidence from IGC-funded on-going microeconomic research projects which suggest that the range of available goods in particular and living standards in general decrease with distance from major urban centers (and with decrease in population densities) in Ethiopia. He, then, described the potential policy issues and options around structural transformation in these settings. He further emphasized that we should be able to think more carefully and come up with more coherent policies relying on existing evidences from micro and macroeconomic studies.

Nigusse Gebre Gebremedhin (Vice Director General, Technical and Vocational Education and Training) focused on discussing the functioning of the Technical and Vocational Education and Training (TVET) program and its opportunities and challenges identified by the Ministry of Education. He emphasized the importance of making graduates from the TVET program competitive in the national, regional, and international markets is crucial to become competitive in the global commodity market. One of the attempts taken by the Ministry of Education in this regard was incorporating the Ministry of Industry and other government organizations in the supervision of TVET program to ensure better matches between the skill sets acquired by TVET graduates and the skill sets employers demand. He closed his presentation by inviting IGC and its researchers to help the Ministry of Education by providing further support on how the Ministry can make TVET graduate more competitive.

These presentations were followed by active discussions between presenters and participants, which consists of both Ethiopian & international researchers and policymakers from Ethiopia, including H.E. Ato Newai Gebre-ab.

By Yared Seid, Country Economist, IGC Ethiopia