THE NATIONAL ECONOMIC

TRANSFORMATION PLAN
n

Presented by: Aboma Mosisa

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TABLE OF
IN T RO D UC TI O N ..................................... 3
PR OP ELLI N G E THI OP I A T OW A R DS

CONTENTS
BEC O M I NG A M I DD LE - I NC OM E NA TI O N. . .5

TH E NE T PLA N IS DI F F ER E N T F ROM PA S T
A T TE M P TS TO G RO W T HE EC O NO M Y … . .. 6

TO B E D EV EL OP ED JO I N TLY W I T H
PA R TIC IPA TI O N O F A L L M A JO R
STA K E HOL D ER S … …… ……… …… …… . .. …… .9

BUIL DI N G O N S TR E NG TH S O F T HE
PA S T… …… …… ……… … …… .. . ……… …… … .10

GR OW TH IS TO B E A C H IEV E D
SU ST A I NA BL Y …… …… ……… …… …… …… . .10

INC R EA S IN G GLO BA L C OM P E TI TI O N FO R
M A R K ET S , C A PI TA L A N D TA L E N T … …… .1 2

TH E NE T PLA N S HO UL D BE PA R T O F A
C OM P RE H E NSI V E G OV ER NM E N T
A GE N DA … …… …… …… ……… …… …… …… .13

TH E NA T IO NA L EC O N OM IC
T RA NS FO RM A TI O N PL A N ’S C O RE
VA LU E S …… …… …… … … ……… …… …… …… 14

M A NA GI NG RIS K …… … ……… …… …… …… .1 6

GOV E R NM EN T S HO UL D PA R T N E RS HIP
W IT H T HE P RI VA TE S E C TO R T O E N SU R E
DE LIV E RY … …… …… … … ……… …… …… … 1 8

HOW TO P RO T EC T SM A LL - SC A L E A N D
IN F ORM A L B U SI N ESS E S …… …… …… …… 27

TH E 1 2 KEA S I N A C TI O N … …… …… …… … 29

RE- E NG I NE E RI NG …… … ……… …… …… …6 2

EC O N OM IC M A P PI N G … ……… …… …… ….7 3

K EY FI N DI N GS …… …… ……… …… …… …. 7 7

C O NC LU SI O N… …… … … ……… …… …… …7 9 .

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INTRODUCTION

E
thiopia is at a crossroad. Whilst much has been achieved, the challenges ahead
are significant. Since the Growth and Transformation Plan I & II, we have
started the highway into building a robust and resilient economy, which has
sustained double digit economic growth even though we have a long way to go to
eradicate hardcore poverty. We have also been able to significantly improve our
provision of universal access to basic health, education, communications and other
public services. As a result, the quality of life for the vast majority of Ethiopians has
improved. However, achieving our bold aspirations of Vision 2020, by the year 2020,
will be challenging if the current economic approach is not going to be amended.
Ethiopia needs to economically transform to join the group of middle-income nations

This is where Ethiopia stands today. If we do not correct our course, we will be unable
to continue improvements in education, health and quality of life. However, if we
redouble our efforts to attract investment, drive productivity improvements and
innovate, we can compete successfully in the global economy and achieve middle-
income status.

We know that our government is committed to pursuing a strategy to achieve middle-

income status. We had embarked on a Growth and transformation Plans (GTP I & II) to
propel our economy to a middle-class status by 2020. This my new approach to the GTP
builds upon the policy directions, strategies and programs of the previous GTPs,
formulated from an entirely different approach and would act as a unique economic
model.

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I would like to promote shifting of our nation’s focus into areas where Ethiopia has
inherent competitive advantages. This means prioritizing investments of public funds
and policy support in a limited number of key growth engines. Hence, I’ve listed out 12
Key Economy Areas (KEAs) to get priority over other economic activities. This also
means changing our governmental approach to economic growth from a passive
expectant into a supporter and facilitator of private sector-led growth.

This NET Roadmap contains concrete targets, which I have strongly believed in to
bring fundamental changes in all aspects of our life, most importantly in the economy
sector of our country. Taking into account that my initial idea would be developed to
its full extent through labs and a series of forums where the best minds in government
and private sector would be brought together to develop final ideas which would be
translated into actions that will help us achieve our target economic heights. The
projects which are supposed to drive growth in the fundamental economic areas would
be chosen based on rigorous financial and economic analysis, to ensure that the people
of Ethiopia get the best value from the resources which is available throughout the
country and from initiation funds that the government invests. Some of these cannot
be achieved without specific policy and regulatory reforms that the government should
take. As was the case with the GTPs, a unit should be formed to orchestrate the delivery
and monitoring of this program.

In implementing the NET plan, tough decisions need to be taken. I strongly suggest
the input and support of the private sector, civil society and every stake holder as we
start implementing the projects and reforms to take our economy forward. As we
embark on this journey together for the future of our children and the future of our
country, I urge all Ethiopia to join hands in seizing new opportunities arising from our
chosen course. The journey will be long and arduous but we must persevere. God
willing, we will succeed.

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PROPELLING ETHIOPIA TOWARDS BECOMING A
MIDDLE INCOME NATION

I would like to kindly request the government to initiate a nationwide inception of a

new economic model, which is supposed to emerge out of rigorous social, economic,
cultural and environmental analysis and design discussions, to be undertaken by all
the private sector and business community across the country, where best minds
from the government and the private sector come together to work on a brand new
concept I am proposing, i.e. The National Economic Transformation Plan and to
evaluate and subsequently approve the 12 Key Economic Areas I suggested and to
develop detailed implementation plans.
In all sectors where it is realistic to apply, prototype projects would be set in place
to develop the best practices which are to be extensively used throughout the
country. All sort of imported products will be re-engineered and produced locally as
far as our up-to- date capacity and potential allows us to do so.
In the last stages of formulation of ideas and plans development important
stakeholders such as the Prime Minister, Ministers and business leaders would be
brought in to visit the prototype projects and provide their feedbacks. As a result of
this process, we would conclude a clear road map for Ethiopia to become a middle-
income nation. The National Economic Transformation (NET) Plan is a
comprehensive effort that will transform Ethiopia into a middle-income nation in the
shortest possible year than any other economic approaches I know. It will lift
Ethiopia’s gross national income (GNI) per capita from a globally very destitute
position now to a middle-income nation status within a decade or less.
Successful implementation of the NET will see Ethiopia’s economy undergo
significant changes to somehow resemble other developed nations, afterwards where
will continue our shift towards a service-based economy. Millions of new jobs will
be created by within couple of years, spread across the country in urban and rural
areas. The nature of these new jobs will result in a shift towards middle and high-
income salary(benefit) brackets. Finally, growth will be achieved in a sustainable
manner, without cost to future generations, through initiatives such as building
alternative energy generation capacity and conserving our environment to promote
eco-tourism.

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THE NET PLAN IS DIFFERENT FROM PAST ATTEMPTS
TO GROW THE ECONOMY
The very ideals of the NET Plan originate from the idea of considering our country
as an organism. This biological term refers to the coordinated functioning of
different organs to enable a whole organism.
Likewise, I wanted to derive my national economic approach from the very nature
how a healthy, complete organism operates.
Let's take a deeper took into every one of us’ biological structures. We have the
different systems, such as the respiratory, digestive, nervous, skeletal and circulatory
systems; each one of them having different functions, working towards a complete
functional existence of an organism.
These systems in turn do have organs, organs have tissues and at the very end, we
have the cells.
Cells are the building blocks of every living thing. Each of these cells are supposed
to be healthy and productive so that the whole body could be well.
By considering Ethiopia as an organism and Ethiopians as each cell in an organism,
a brand new economic model can be derived, where the government would be
playing the pivotal role of acting as a catalyst in the proper structural formation of
every system.
We all know that growth starts from the simplest form. People with similar interests,
resources would be grouped together with the aim of achieving a similar goal.
The NET model is a novel and innovative approach to nation-building that draws
inspiration from the biological analogy of Ethiopia as an organism and Ethiopians
as cells. The model aims to create a healthy, productive, and prosperous nation that
can provide public goods and services to its citizens, such as security, education,
health, infrastructure, and justice. To apply the NET model to the specific sectors
and challenges of Ethiopia’s economy, such as agriculture, industry, trade, poverty,
inequality, and environmental sustainability, the model suggests the following steps:
 Identify the key systems (sectors) that are essential for the functioning and
development of the organism (Ethiopia), such as the respiratory (agriculture),
digestive (industry), nervous (trade), skeletal (infrastructure), and circulatory
(finance) systems.

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  Assess the current state and performance of each system (sector) and identify
the gaps, challenges, and opportunities for improvement and transformation.

 Design and implement policies and interventions that can enhance the
productivity, efficiency, and quality of each system (sector) and address the
specific needs and challenges of each cell (Ethiopian) within the system
(sector).

 Coordinate and integrate the policies and interventions across the systems
(sectors) to ensure coherence, synergy, and complementarity and to avoid
duplication, conflict, and waste.

 Monitor and evaluate the impact and outcome of the policies and interventions
on each system (sector) and on the organism (Ethiopia) as a whole and make
necessary adjustments and corrections based on feedback and learning.
To ensure that each cell (Ethiopian) is healthy and productive, and that each system
(sector) is coordinated and functional, the model suggests the following steps:
 Empower and enable each cell (Ethiopian) to participate in the decision-
making and implementation processes of the policies and interventions that
affect their lives and livelihoods and to hold the government and other actors
accountable for their actions and results.

 Provide each cell (Ethiopian) with the necessary resources, skills, and
opportunities to access and benefit from the public goods and services
provided by the systems (sectors) and to contribute to the development and
transformation of the systems (sectors) and the organism (Ethiopia).

 Promote and foster a sense of national identity and loyalty among each cell
(Ethiopian) and a culture of cooperation and solidarity among the cells
(Ethiopians) within and across the systems (sectors) and the organism
(Ethiopia).

 Protect and respect the rights and dignity of each cell (Ethiopian) and the
diversity and plurality of the cells (Ethiopians) within and across the systems
(sectors) and the organism (Ethiopia) and ensure that no cell (Ethiopian) is
left behind or discriminated against.

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To measure and evaluate the performance and well-being of the organism (Ethiopia)
as a whole, the model suggests the following steps:
 Define and agree on a set of indicators and targets that can capture the
multidimensional aspects of the performance and well-being of the organism
(Ethiopia), such as the economic, social, political, environmental, and cultural
dimensions.

 Collect and analyze data and information on the indicators and targets from
various sources and methods, such as surveys, censuses, administrative
records, participatory assessments, and qualitative studies.

 Compare and contrast the actual results and achievements with the expected
goals and objectives and identify the strengths, weaknesses, opportunities, and
threats of the performance and well-being of the organism (Ethiopia).

 Communicate and disseminate the findings and recommendations of the

measurement and evaluation to the relevant stakeholders and the public and
solicit their feedback and inputs for improvement and learning.
A bold new approach has been taken to develop the NET Plan. It is the first time that
any effort of this kind has been undertaken in the history of Ethiopia, or of any other
developing nation as far as I know. The program provides strong focus on a few key
growth engines: the 12 Key Economic Areas (KEAs). These KEAs are expected to
make substantial contributions to Ethiopia’s economic performance, and they should
receive prioritized public investment and policy support. The NET will be led by the
private sector; the Government will primarily play the role of a facilitator. Most of
the funding is supposed to come from the private sector with governmental
investment being used as a catalyst to spark private sector participation.
The effectiveness of any transformation program will rely on how accurate details
are formulated. The NET presents a departure from norms because it is focused on
actions— not on theoretical principles and ideas. It’s fundamentally based on the
construction of national economic systems and handing over to the public to join in
and give life to the system.
Once the proposal is accepted for implementation, the next activity would be to
figure out the entry point projects that would concretely outline actions required to
grow the economy, which will be selected based on rigorous economic and financial

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analysis. Any public spending will be allocated on the basis of maximizing GNI per
for every amount in public expenditure.
The goal of nation-building is to create a stable and prosperous nation that can
provide public goods and services to its members, such as security, education, health,
infrastructure, and justice. To achieve this goal, nation-builders need to overcome
several challenges, such as:
 How to define the boundaries and membership of the nation, and how to deal
with diversity and minorities within the nation.

 How to establish a legitimate and effective political system that can represent
the interests and preferences of the nation, and how to balance the power and
autonomy of different levels of government (such as central, regional, and
local).

 How to design and implement economic policies that can promote growth,
development, and welfare for the nation, and how to allocate and distribute
the resources and benefits among the members of the nation.

 How to foster a sense of national identity and loyalty among the members of
the nation, and how to manage the relations and conflicts with other nations.
Finally, the NET plan would be designed to be rigorous and transparent, with a new
Management, Performance and Delivery Unit under the Prime Minister (Regional
Presidents) as one independent department, being tasked to monitor and report
progress to Government leaders, the business community and the House of
Representatives.

TO BE DEVELOPED JOINTLY WITH PARTICIPATION

OF ALL MAJOR STAKEHOLDERS
Beginning from its commencement stage, the private sector and the business
community should be involved in the development of the NET plan by means of
inclusive workshop to be run with multitudes of participants to help ascertain the
12 KEAs. The private sector will have to play a large role by inviting some 500 of
the best minds from the private sector (mostly from leaderships in different good
performing companies) and a certain part from the Government (different public

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institutions, ministries and agencies) to come together and develop plans for the 12
KEAs.
The experimental ideas and the plans that will be developed with numerous
brainstorming meetings with ministries, agencies, multi-national corporations, local
corporations and non-governmental organizations. Important stakeholders such as
the Prime Minister, Ministers and business leaders, should be brought in early to join
in panel discussions and provide feedback to the participants.
The result of this process will help define a clear roadmap for Ethiopia to become a
middle-income nation. In launching the NET plan, I’d like to say that the 12 Key
Economic Areas listed in this roadmap are meant to just kick start public dialogue,
and through their execution we will learn and adapt the program to ensure that we
reach our aspirations.

BUILDING ON STRENGTHS OF THE PAST

Ethiopia has achieved significant economic and social progress over the past few
decades. This strong economic performance has helped improve the quality of life
for Ethiopians and supported widespread advances in education, health,
infrastructure, housing and public amenities….
However, the world is changing and Ethiopia needs a fundamentally new economic
model in order to become a middle-income nation. Our historical growth engines are
slowing down, we face the risk of being stuck in a poverty trap, our fiscal position
is arguable unsustainable and global competition for markets, capital and talent is
becoming increasingly intense. In response, the NET plan represents a marked
change in approach that builds on the previous GTPs.
The Government’s middle-income objective is not just a quantitative target. It is also
about Ethiopia becoming an advanced, developed nation with an economy
possessing the characteristics of a middle-income economy, such as a thriving
services sector, a balance between private consumption and investment as well as
productivity levels that are similar to those of other middle-income economies.

GROWTH IS TO BE ACHIEVED SUSTAINABLY

The measures to achieve middle-income status must be sustainable in both economic
and environmental terms, meeting present needs without compromising those of

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future generations. We must achieve growth without running down Ethiopia’s
natural resources. Additionally, we will reduce our dependence in agricultural
products as the primary economic contributor. Our fiscal position will be made
sustainable, with a stronger focus on private sector-led investment to avoid reliance
on public funding. In environmental terms, the Government should be committed to
the stewardship and preservation of the natural environment and resources by
ensuring that they are properly priced into the cost of development.
Some of the main drivers of Ethiopia’s economic growth are:
 The agricultural sector, which accounts for about 35% of the GDP and
employs over 70% of the population, and which has benefited from improved
productivity, diversification, and market access.
 The industrial sector, which accounts for about 25% of the GDP and has
grown at an average of 10% per year, and which is driven by public
infrastructure investments, especially in energy, transport, and telecom, as
well as by the development of manufacturing industries, such as textiles,
leather, and agro-processing.
 The service sector, which accounts for about 40% of the GDP and has grown
at an average of 9% per year, and which is driven by the expansion of trade,
tourism, finance, and education.
 The public and private consumption and investment, which have increased
due to the government’s pro-poor spending, the improvement of the business
climate, and the attraction of foreign direct investment.
 The export performance, which has improved due to the diversification and
competitiveness of the export products, such as coffee, flowers, fruits,
vegetables, livestock, and minerals, as well as the access to regional and
global markets
Ethiopia is at a critical point in its economic development. There has been a declining
public trust in the Government over the past decade due to youth unemployment,
corruption and unjustified wealth distribution, and moreover it has become
increasingly clear that the historical drivers of growth can no longer be relied on to
deliver strong economic outcomes. It is more difficult to generate high rates of
economic growth in an increasingly competitive global economy. Growth can no
longer be taken for granted, but needs to be earned.
To moving into fiscal sustainability and achieving the Government’s commitment
of minimizing yearly budget deficits will require a change in direction. Investor
attitudes to sovereign debt have changed significantly over the past two years, and

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capital markets may be less inclined to finance sovereign debt on the terms they have
extended in the past. There is also increasing evidence of fiscal policy competition
between countries, with governments cutting corporate tax rates to obtain a
competitive edge.
In order for Ethiopia to offer competitive personal and corporate tax rates and invest
in education, research, public services and infrastructure, it will need to strengthen
its fiscal position substantially.

INCREASING GLOBAL COMPETITION FOR MARKETS,

CAPITAL AND TALENT
The global economy is becoming much more competitive. The emergence of new,
highly competitive regional and global companies are going to pose challenges for
the strong position of Ethiopian-based companies aspire to achieve in the
manufacturing and services sectors. In addition, companies, investors and talent
have an increasing number of opportunities and location options. Ethiopia, therefore,
needs to demonstrate a clear value proposition in order to attract and retain them.
Moreover, many other governments are aggressively positioning themselves to
compete for talent and capital. The low levels of foreign direct investment (FDI) that
Ethiopia has attracted over the past decade are one indication of a weakening
competitive position.
The implementation of the National Economic Transformation (NET) plan can help
Ethiopia to increase its global competitiveness for markets, capital, and talent, by
addressing some of the key challenges and opportunities that the country faces in its
quest for sustainable and inclusive development. Some of the possible ways that the
NET plan can achieve this are:
 Developing the mineral industry value chain, by enhancing the exploration,
extraction, processing, and marketing of mineral resources, and by promoting
the development of downstream industries, such as metal fabrication,
chemical production, and construction materials³. This can help Ethiopia to
diversify its export products and markets, and to increase its value addition
and beneficiation of mineral resources.

 Improving the trade facilitation and logistics system, by reducing the time and
cost of trading across borders, simplifying the customs procedures and
documentation, and upgrading the transport and storage infrastructure². This

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 can help Ethiopia to improve its ranking in the World Bank's Doing Business
report, and to attract more foreign direct investment and trade partners.

 Promoting the digital transformation and e-commerce, by leveraging the

potential of information and communication technologies (ICT) to improve
the efficiency and effectiveness of trade service delivery, and by creating a
conducive environment and infrastructure for online transactions²⁴. This can
help Ethiopia to tap into the growth potential of modernizing the policy
framework, and to foster innovation and entrepreneurship in the economy.

 Strengthening the capacity and competitiveness of the private sector,

especially the micro, small and medium enterprises (MSMEs), by improving
their access to finance, technology, skills, and market information²⁴. This can
help Ethiopia to create more productive and meaningful employment for its
young and growing labor force, and to enhance the quality and
competitiveness of its economic sectors.

 Improving the quality and equity of health service delivery, by ensuring that
all people have access to essential health services, regardless of their location,
income, or gender¹. This can help Ethiopia to improve the well-being and
productivity of its population, and to reduce the burden of communicable and
noncommunicable diseases.

THE NET PLAN SHOULD BE PART OF A COMPREHENSIVE

GOVERNMENT AGENDA
The NET Plan should be a priority in the Government’s economic agenda in
response to these challenges. It also complements existing programs, GTP part II as
having with similar objectives though differs in approach.
I agree that the economic transformation plan should be part of a comprehensive
government agenda, as it aims to address the major challenges and opportunities that
Ethiopia faces in its quest for sustainable and inclusive development. The plan is
based on a vision of transforming Ethiopia into a prosperous, resilient, and green
economy, with a high-quality and diversified industrial base, a modern and efficient
agricultural sector, and a vibrant and innovative service sector¹.

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The plan also complements some old programs, such as the Growth and
Transformation Plan II (GTP II), which was the second phase of the national
development plan that was covering the period from 2015/16 to 2019/20. The GTP
II had similar objectives as the NET plan, such as achieving rapid and broad-based
economic growth, reducing poverty and inequality, enhancing human development,
and ensuring environmental sustainability. However, the NET plan differs from the
GTP II in its approach, as it focuses more on the structural and institutional reforms,
the quality and competitiveness of the economic sectors, the innovation and
digitalization of the economy, and the participation and empowerment of the private
sector and the civil society.
Therefore, the NET plan should be a priority in the government's economic agenda,
as it can help Ethiopia to overcome the current and future challenges, such as the the
civil conflict, the climate change, and the demographic transition, and to seize the
new opportunities, such as the regional and continental integration, the global market
access, and the technological advancement. The plan can also help Ethiopia to
achieve its long-term goals, such as becoming a middle-income country by 2025,
which by now seems not so much becoming a reality, and a carbon-neutral economy
by an unspecified year.

THE NATIONAL ECONOMIC TRANSFORMATION

PLAN’S CORE VALUES
The starting point of the NET plan is based on the idea of implementing radical
changes in every sector and areas of the economy. That is why the 12 Key Economic
Areas were selected. Trial projects will be used to ensure so as to conclude each of
the 12 KEAs and to determine specific initiatives and projects that would drive the
economic transformation.
The trial projects would provide all stake-holders the opportunity to work on and
shape a transformative, sector-specific strategy and roadmap. Detailed plans,
describing the aspirations, strategies and concrete actions will be developed for each
KEA. These plans include requirements for public funding, investment and public
participation.
Every initiative proposed was anchored on GNI to ensure that it contributes towards
transforming Ethiopia into a middle-income economy. Selection of projects should
be based on their potential to generate big results fast.

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It is important to emphasize that the NET Plan will be an evolving program. The
initiatives defined are not intended to be a detailed blueprint of economic activity in
Ethiopia for the next 10 years—they merely serve as a starting point. A number of
projects will evolve, some will change quite radically and some will be discontinued.
Many new initiatives and activities that have not even been thought of yet will
emerge as the reforms take hold and markets develop. The 12 KEAs selected are:
These KEAs are:
1. Agriculture and agro-processing
2. Manufacturing and industrialization
3. Trade and commerce
4. Tourism and hospitality
5. Energy and mining
6. Transport and logistics
7. Construction and infrastructure
8. Information and communication technology
9. Education and training
10.Health and wellness
11.Culture and entertainment
12.Environment and sustainability

The 12 Key Economic Areas (KEAs) are selected because I assumed that they are
significant engines of future growth and their expected contribution to GNI will help
Ethiopia achieve middle-income status the shortest time possible with the help from
Government in policy reforms such as the removal of barriers to competition and
market liberalization.
The program will involve deliberate choices and trade-offs. Prioritizing investment
in the KEA sectors implies reducing investment in other sectors. The designation of
sectors as KEA sectors should have real resource implications if it is to lead towards
a meaningful change. The same philosophy of prioritization will also apply to other
support provided by the Government to sectors, such as operating expenditure and
sector-specific policy and regulatory change. The 12KEAs should have dedicated

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focus from the Prime Minister and will have fast- track mechanisms to resolve
disputes or bottlenecks. The Government must show commitment to the ongoing
support of growth in the non-KEA sectors. However, the Government should focus
its efforts on the KEAs because of the significance of the GNI contribution that these
parts of the economy can drive.
There are five reasons why focusing on a relatively small number of sectors is
important in generating economic benefit for Ethiopia:

 Align policies coherently. Having a clear view on priority sectors means that
it will be easier to deliver a coherent, coordinated policy agenda;

 Avoid sub-scale investment. To achieve substantial, sustained impact, the

investment made into a particular sector needs to be meaningful;

 Develop a clear value proposition. Having a limited number of priority sectors

contributes to having a clear national-value proposition, which can be readily
communicated to local and foreign investors;

 Provide leadership focus. Relatively scarce government leadership time (the

Federal Government, Regional Governments and Ministerial Offices) can be
allocated in a meaningful way to priority areas; and

 Allow for higher quality monitoring. It will be easier to measure and monitor
the performance of a limited number of sectors, increasing the likelihood of
economic impact.

MANAGING RISK

The NET Plan is a highly ambitious program, and there are certainly risks to
implementation. The most significant risk is that the public is not expected to
welcome this entirely new economic model. Since the program demands merging of
personal assets into the ownership of a company, a very serious resistance may face
the implementation of the program and would pose a great challenge to materialize
the idea on the ground.

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To mitigate this risk of implementation, the Government should take prior
recognition of the expected rejection in some part of the public and should address
the problem before it happens by means of developing public awareness about the
plan. Then after, Government should take necessary implementation measures in a
sustainable way, absolutely focused on implementing the reforms identified by the
KEA and will target funds to the program, so as to stimulate private investment.
There are other risks to the program. The global economy is unpredictable and may
not grow as quickly as the projected expectation. There is a limit to what can be done
to mitigate this risk. However, the fact that the NET Plan aims to balance growth
across exports and domestic consumption means that Ethiopia will be somewhat less
exposed to changes in global economic activity than would otherwise be the case.
Some of the key challenges and opportunities that the NET Plan may face, such as:
 The public resistance to the new economic model that demands merging of
personal assets into the ownership of a company.

 The unpredictability and volatility of the global economy and its impact on
Ethiopia's growth and development.
 The need for a strong partnership and collaboration between the government
and the private sector to provide support, funding, and delivery of the NET
Plan.
Some possible solutions and strategies to mitigate these risks and enhance these
opportunities, such as:
 Developing public awareness and education about the NET Plan and its
benefits and advantages for Ethiopia and Ethiopians.
 Balancing growth across exports and domestic consumption to reduce the
exposure to changes in global economic activity.

 Creating a nationwide movement to arouse an agricultural-led-industrial

revolution and enabling the country to achieve the goal of becoming a middle-
income country as soon as possible.
These solutions and strategies are very reasonable and practical and can potentially
have a positive impact on the implementation and outcome of the NET Plan. Here
are some suggestions for the immplementing team to consider and improve thoughts,
such as:

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  Plan to measure and evaluate the public awareness and education about the
NET Plan and its effectiveness and impact on the public acceptance and
support of the new economic model,

 Plan to diversify and expand Ethiopia's export and domestic markets and
products to ensure a balanced and sustainable growth across different sectors
and regions,

 Plan to identify, select, and support the groups of entrepreneurs unified into
big business conglomerates and ensure their competitiveness, innovation, and
social responsibility?
These suggestions can help us to refine and strengthen our thoughts on how to
manage the risks and ensure the delivery of the NET Plan.
GOVERNMENT SHOULD PARTNERSHIP WITH THE PRIVATE
SECTOR TO ENSURE DELIVERY
The Government will be focused primarily on providing support and high-impact
funding. Its role is to ensure that all the relevant enablers are put in place, while
removing any hurdles and process delays. Playing a complementary role, the private
sector is focused most heavily on funding and delivery. Its role is to fund economic
plans with the highest return on capital in sectors where it has proven experience.
The NET Plan is fundamentally based on the concept of creating a nationwide
movement to arouse an agricultural-led-industrial revolution, enabling the country
achieves the goal of becoming a middle income country as soon as possible, by way
of creating groups of entrepreneurs unified into big business conglomerates.
One of the most promising parts within the NET Plan strategy is the cluster-based
development approach. Clusters are groups of industries closely related by skill,
technology, supply, demand and/or other linkages. A cluster-based development
approach involves collaborative actions by groups of companies, governments, and
other related institutions to improve the competitiveness of a group of interlinked
economic activities in a specific geographic region.
Empirical study of cluster-based industrial development in developing countries
suggests that a cluster can be an effective institution for value chain development.
There are numerous successful agro-based clusters in many countries. As an
illustration, Figure 1 shows the structure of an agro-based cluster. In the cluster,
farmers are entrepreneurs who see their farms as businesses. They are not just

18
farming but operating complicated businesses, employing workers, coordinating the
division of labor among teams, and collaborating with outsiders. In other words,
entrepreneurial farmers are skillful at not only producing but also grading,
marketing, branding, and management. Under the cluster, entrepreneurial farmers
and entrepreneurial agro-processors are closely connected through contracts, and
they also enjoy linkages with (i) local institutions, such as government agencies; (ii)
industries supporting crop cultivation, such as the seed industry; iii) industries
supporting crop processing, such as the packaging industry; and iv) other related
industries, such as tourism.
Figure 1: Structure of an Agro-Based Cluster

* Entrepreneurial farmers are skillful at not only producing but also grading,
marketing, branding, and management.

The cluster approach can enable smallholder farmers and agro-processors to engage
in high-value agriculture through at least two key mechanisms. The first mechanism
is knowledge and information spillovers.
The vertical and horizontal coordination between actors in the agricultural value
chain and supporting organizations will foster trust, reduce transaction costs, and
facilitate the flow of knowledge and information. Knowledge and information

19
transfers will then promote the diffusion of technological and managerial
innovations.
These innovations are important because, in high-value agriculture, good
performance by a cluster member can boost the success of the others. For example,
the performance of agro-processors is highly dependent on the crop quality produced
by farmers.
The second mechanism is collective actions. Organizations within a cluster can be
used as a means to consolidate marketing operations, such as market research and
crop quality certifications. These collective actions will substantially reduce the
transaction costs of individual farmers and agro-processors, thereby allowing each
member to enjoy low transaction costs as if it had greater scale. Moreover, farmer
organizations will also enable smallholder farmers to access credit, quality inputs,
and machinery.
Here are some five strategies for the development of our agro-based clusters:
1st, stakeholders within a cluster must be mobilized into various groups, such as
farmer cooperatives and agro-processors’ associations.
2nd, stakeholders in the cluster must be trained through their groups. Specifically,
training for improved cultivation practices must be offered to farmers, seed
companies, and nursery operators. Moreover, farmers should be trained in grading,
marketing, and management. Besides, managerial training must be offered to agro-
processors.
3rd, the collective actions within each group and the vertical linkages between
farmers and agro-processors through contracts must be promoted.
4th, a regulatory framework to implement quality standards must be set up.
Finally, a project management unit must be established to coordinate the interests of
diverse stakeholders and promote the cluster-based agricultural transformation
approach.
Research and development are required to support the transition toward high-value
agriculture through the cluster-based development approach.
Therefore, the national research community can contribute to the transition by
helping to design an effective strategy to develop agro-based clusters in all parts of
our country. Moreover, government and donors can contribute by providing support

20
to research programs that aim to deepen our understanding of agro-based cluster
initiatives, structure, and outcomes.
250 250 250

250 250 250 • Three enterprises form one mini-cluster.

Group of • Four mini-clusters form a cluster
Enterprises • One Enterprise will be allocated with 250
hectares of land.
250 25
10 group of enterprises unified
250 250
250
Rules and regulations will be set in place to enable a successful work order between
the chains of enterprises.
• There shall be an association liaising between government, groups of
enterprises and suppliers.
In this initial stage of formation of these chain of enterprises, a maximum of 15
clusters of enterprises should be established where in there are twelve sub-clusters,
each containing three, three cells of enterprises. Each cell will be embodied with five
group members, where thee of them are shareholders, while the remaining two staffs
will be serving as employees of the enterprise.
Regional governments should be responsible for paying the salaries of these two
staffs contained in every enterprises formation, for a duration of until a time set for
the firms to get a return from their investments.
In allocating the right plots of land for the development works aspired for, the
following points should be taken into consideration:
I. Identify river courses for possible irrigation convenience,
II. Identify feasible locations for the formation of artificial lakes for irrigation,
fishing and other uses,
III. Classify arable lands based on their ease of investment,
IV. Sort out areas for afforestation (Lumber industry).
✓ Consider every farmer as a land-lord, having the necessary collateral bond for
doing busines.

21
 ✓ Join together these resources to create big share companies investing in the
farming and agro-processing industries
✓ Assume a group of five farming families having 2.5, 2.5, 3, 2 & 1 hectare
each, residing in scattered houses doing the business separately.
✓ Then, bring these farmers together; rebuild their houses in a nearby village
where they can claim for better facilities because of their unity. This strategy
is also believed to bring enormous awakening in the rebuilding of their overall
life which is to bring a nation-wide setting of personal living standard,
resulting in a hardworking culture.
Minimum requirements should be set in place during the re-construction works with
regard to material usage, serviceability, safety and aesthetic values which the new
built houses should fulfill, guided by a civil engineer from the woreda bureau.
During the process, tree cutting is to be highly discouraged, rather, re-use of
materials and the use of bricks and earthen hydra-foam blocks are to be encouraged.
 By taking this assumption as a case, then identifying each household with
A,B,C,D and E respective to the number of hectares they own;
Share of A = (Area of Farm Land) x (No. of Working Hours/day)
If the 10-hours a day working rule is going to be applied,
Share of A = 2.5x10= 25 shares, where the value of each share shall be
determined by the market value of the asset (land) as estimated by professional
estimators.
Accordingly, for the rest of the team members, calculating in a similar way,
A = 2.5 x 10 = 25
B = 2.5 x 10 = 25
C = 3.0 x 10 = 30
D = 2.0 x 10 = 20 And
E = 1.0 x 10 = 10
TOTAL = 110

Assuming member ‘E’s possession as a land to be dedicated for afforestation

purposes, making the effective sum to become 100 shares.

22
Hence, if any of these farmers’ unions share holder fails to comply with his/her daily
obligation of working the minimum working hours in a day, the number of shares
the shareholder owns will be reduced to a proportion of his contribution.
Based on this, the ‘Development Bank of Ethiopia’ will give certain amount of loan
after evaluation of the collateral possession of every farmers union which are
supposed to be projected to become big investors.

Assume the above figure shows groups of people in a certain locality, who are
become members of private limited companies of their choice, depending upon their
nature of the farming activity and/or other relations within the community. During

23
joining, property would be valued at a standard national valuation system and be
recorded as investment capital that will be equal to the share a person will have
within the PLC during the formation stage.
This grouping of individuals or households under PLCs will be the grass root level
in the formation of a huge business conglomerate.
In the pyramidal structure of the mother company, some twenty or so of these PLCs
or enterprises would form a higher cluster, which aims at taking their agricultural
activities to the higher industrial level. As a result of which, each farmer would
become much more productive and live a much higher life standard and as a total
sum, the whole country would attain the middle class world states we aspire into.
The NET plan is based on the concept of creating groups of entrepreneurs unified
into big business conglomerates that can drive growth and development in 12 Key
Economy Areas (KEAs) that have inherent competitive advantages for Ethiopia.

A pyramidal value chain structure of businesses for the NET plan is a hierarchical
arrangement of the different levels and types of businesses that are involved in the
production, processing, distribution, and consumption of the goods and services in
each KEA. The structure is based on the idea that each lower level of the pyramid
supports and adds value to the upper level, and that each upper level provides
guidance and direction to the lower level. The structure is also based on the idea that
each level of the pyramid has a different degree of specialization, innovation, and
competitiveness, and that each level faces different opportunities and challenges in
the market.
The pyramidal value chain structure of businesses for the NET plan consists of
four levels:
Level 1: The base of the pyramid consists of the small-scale and informal
businesses that are the primary producers and suppliers of the raw materials and
inputs for the KEAs. These businesses are mostly owned and operated by individual
entrepreneurs or family members, and they have low capital, technology, and skill
requirements. These businesses are also the most vulnerable and marginalized in the
market, and they face many challenges such as low productivity, quality, and
income, as well as high risks, costs, and uncertainties. These businesses need support
and protection from the government and the upper levels of the pyramid, such as
access to credit, training, technology, infrastructure, and market information.

24
 Level 2: The second level of the pyramid consists of the medium-scale and
formal businesses that are the secondary producers and processors of the
intermediate and final products and services for the KEAs. These businesses are
mostly owned and operated by groups of entrepreneurs or cooperatives, and they
have moderate capital, technology, and skill requirements. These businesses are also
the most dynamic and innovative in the market, and they face many opportunities
such as value addition, diversification, and differentiation, as well as high demand,
profitability, and growth. These businesses need support and facilitation from the
government and the upper levels of the pyramid, such as access to finance,
technology, infrastructure, and market linkages.
Level 3: The third level of the pyramid consists of the large-scale and
corporate businesses that are the tertiary producers and distributors of the final
products and services for the KEAs. These businesses are mostly owned and
operated by big business conglomerates or multinational corporations, and they have
high capital, technology, and skill requirements. These businesses are also the most
competitive and influential in the market, and they face many advantages such as
economies of scale, scope, and network, as well as high quality, efficiency, and
reputation. These businesses need support and collaboration from the government
and the lower levels of the pyramid, such as access to policy, regulation, and
incentives, as well as social and environmental responsibility.
Level 4: The top of the pyramid consists of the consumers and users of the
final products and services for the KEAs. These are the individuals, households,
businesses, and organizations that demand and benefit from the goods and services
produced and provided by the lower levels of the pyramid. These are also the
stakeholders that provide feedback and evaluation to the lower levels of the pyramid,
such as preferences, satisfaction, and loyalty. These stakeholders need support and
empowerment from the government and the lower levels of the pyramid, such as
access to information, education, and choice, as well as quality, affordability, and
availability.
This is a very simplified and abstract model, but it can be extended and refined to
incorporate more realistic and complex features and assumptions. This model can
help us to understand and explore the pyramidal value chain structure of businesses
for the NET plan.
**In the picture below, government intervention will come to effect on every step
of the supply hierarchy; local authorities will establish businesses and transfer it to
private entity in their locality.

25
The approach government took to resolve housing shortage issue in Finfinne/Addis
Ababa could somehow be translated for the eradication of poverty through
borrowing for investments having clustered network structure.
Take a wise look into the pyramidal network structure of those multi-level marketing
schemes, whose members join with a certain amount of investment and later should
grow into higher levels in the structure by way of inviting other potential members
under their downward structural network. there we should derive certain aspects of
their trend to formulate the most ideal pyramidal structure that best matches the
context to our nation.
 A computer program would be very important in the development of the
multi- level corporal investment and trading structure.

26
  Investors will be invited to join the structure at every level. skilled and
semiskilled laborers at the grassroots levels, whereas large investors at the top
level in a very similar way to how stock markets are sold throughout the
world.

 With regard to implementing the NET plan, a number of obligatory rules

should be enacted to be applied at different National and regional government
structures.

HOW TO PROTECT SMALL -SCALE AND INFORMAL BUSINESSES

Small-scale and informal businesses are an important part of the economy, especially
in developing countries, where they provide employment, income, and livelihoods
for millions of people. However, they also face many challenges and risks, such as
low productivity, quality, and income, as well as high costs, uncertainties, and
vulnerabilities. Therefore, it is essential to protect and support them, especially
during times of crisis, such as the COVID-19 pandemic.

There are different ways that governments and other stakeholders can help protect
and support small-scale and informal businesses, depending on the context and the

27
needs of the businesses. Based on the web search results, some of the possible ways
are:

✓ Providing health and safety guidelines and support schemes for informal
workers, such as access to water, sanitation, hygiene, and personal protective
equipment, as well as health insurance and social protection schemes1.

✓ Providing adequate short-term welfare support, such as cash transfers, food

distribution, and social grants, to reduce the risk of extreme poverty and food
insecurity, as well as generating employment through paid work opportunities
and public works programs in the medium to long-term1.

✓ Providing liquidity support for firms, such as access to credit, grants,

subsidies, and tax relief, to help them survive the crisis and maintain their
operations and employees.

✓ Providing policy and regulatory reforms, such as simplifying or reducing the

administrative and legal barriers and costs for formalization, granting
informal firms a simplified or intermediate legal or tax status, and improving
the enforcement and protection of property rights and contracts.

✓ Providing market access and linkages, such as facilitating the access to

information, technology, infrastructure, and market opportunities, both
domestic and international, for informal businesses, as well as promoting the
integration and coordination of value chains and clusters of firms.

✓ Providing capacity building and training, such as enhancing the skills,

knowledge, and innovation of informal businesses and workers, as well as
providing mentoring, coaching, and networking opportunities3.

These are some of the possible ways that can help protect and support small-scale
and informal businesses, but they are not exhaustive or definitive. Each situation and
business may require different and tailored solutions, and there may be trade-offs
and synergies between different approaches.

Therefore, it is important to consult and collaborate with the small-scale and

informal businesses and workers themselves, as well as other stakeholders, such as
the private sector, civil society, and international organizations, to design and
implement the most appropriate and effective interventions.

28
Some of the challenges that business networks face are:

• Unregulated competition, which can lead to unfair practices, low quality, and
low profitability for businesses.
• Tax administration, which can be inconsistent, excessive, and burdensome for
businesses.
• Electricity supply, which can be unreliable, insufficient, and costly for
businesses.
• Renewing business license, which can be time-consuming, complex, and
expensive for businesses.
• Corruption, which can undermine the trust, transparency, and accountability of
the business environment.
• Access to foreign exchange, which can be delayed, restricted, and scarce for
businesses that need to import or export goods and services.
• Access to land and construction permit, which can be difficult, uncertain, and
expensive for businesses that need to expand or relocate their premises.
• Access to finance, which can be limited, costly, and risky for businesses that
need to invest or borrow capital.
• Cost and availability of shops, stores, and offices, which can be high, low, and
inadequate for businesses that need to operate or rent space.
• Telecommunication service, which can be poor, slow, and unreliable for
businesses that need to communicate or use the internet.
• Frequent change in business laws and regulations, which can create uncertainty,
confusion, and compliance costs for businesses.

These are some of the challenges that business networks face in Ethiopia, but they are
not the only ones. There may be other challenges that are specific to different sectors,
regions, and interests of the businesses. These challenges can affect the productivity,
efficiency, and competitiveness of the businesses, and reduce their potential for growth
and development. Therefore, it is important to address and overcome these challenges,
and to create a conducive and supportive business environment for the businesses.

THE 12 KEAS IN ACTION

Agriculture And Agro-Processing (The Top area of Interest)

Ethiopia has a total area of 1.14 million square kilometers of land, of which 45%
(513,000 square kilometers) is arable land suitable for agricultural farm practice. Out

29
of the total arable land area, currently only about 8,000,000 hectares of land is
cultivated, which accounts for 16% of arable land. Moreover, 3% of the total area is
irrigated land. Ethiopia is naturally endowed (flavored) to grow different types of
agricultural products. That is why the country is the home of a variety of agricultural
crops. Ethiopia is a large nation with the highest number of above 100 million
people, of which the majority or 85% of the population is engaged in the agricultural
sector.
About 146 types of crops are grown in Ethiopia, the majority ones being cereals,
pulses, and oilseeds. Pulses comprise beans, peas, chickpeas, lentils, soya beans and
haricot beans. Oilseeds grown in Ethiopia are several varieties; the major ones are
Niger seed, linseed, sesame seed, soybean, sunflower, groundnut, rapeseed,
safflower and castor beans. The climatic diversity, which the country is endowed
with, and the multiple usages of crops have enabled the vast majority of agriculture
holders to produce various cereals, pulses, oil seeds, spices and vegetables. Despite
the variations in the volume of production and the relative importance of the patterns
of growth of these crops, they are largely similar across the country.
The Ethiopian agriculture is typical of subsistence production. The low level of
production is largely attributed to traditional farming. Under this traditional sector,
the agricultural operations are carried out on private peasant holdings and most of
the products are mainly for own household consumption, as production activities are
almost entirely labor intensive, low input and rain-fed, resulting in low productivity.
Nevertheless, owing to the current strategy of the Ethiopian Government, which is
Agricultural-Led-Industrial Development and is under implementation, it is believed
that the quality and quantity of the products will meet the international market
standards gradually, through the introduction of commercial farms, by providing
extension service to the individual farmers and supplying agricultural inputs like
fertilizer, selected seeds, pesticides, farmers training, etc.
The new economic policy is encouraging the role of the private sector in the
acceleration of the country’s economic development. Investment incentives, such as
exemption from tax for certain period of years and from customs duty, are some of
the regulations made by the government in order to attract investors to participate in
the business venture. These different policy directives are believed to bring a
sustainable development in the economy, particularly to be self-sufficient in the
supply of raw materials for food processing industries, which are export oriented.
Having recognized the above facts and actual realities on ground, one can conclude
that it will take Ethiopia an extremely prolonged time to achieve the kind of

30
development that it is desperately looking for. One outstanding reason is the fact
that; the farming society can barely afford to own and operate modern facilities,
technologies and practices, so as to compete in the global agricultural products
market. As well, it is impossible for the Government to distribute tractors, planters,
combiners, medicating machines, water pumps, deep freezers, etc., to fulfil their
machinery, equipment and other infrastructure needs, such as irrigation canals and
water wells, at least within a decade time.
Therefore, to effectively face this quest of survival, one must group-on the farming
society according to the principles of the NET Plan, so that they could afford all the
world class facilities to do their job and live their life in a sustainable manner.
Among my reasoning for targeting agricultural products are:
 The Federal Government of Ethiopia has issued Agricultural Led Industrial
Development strategy, which is under implementation.

 The country is blessed to grow variety of agricultural products in the high

lands and low lands which enabled us to meet a diversified global market and
make us reliable suppliers over other rivals.

 Employment opportunity to the local people.

 Source of foreign currency for the country.

 Agricultural products will be used as raw material inputs for food processing
industries for both domestic and international market, therefore more
investors will be attracted to invest at the source country.

 The availability of promising international market.

Here are some suggestions for us to consider and improve our analysis and thereby
develop a more robust proposal, such as:
Plan to group the farming society according to the principles of the NET plan,
and what are the criteria and mechanisms for forming and managing the
groups of entrepreneurs unified into big business conglomerates,

31
 Plan to ensure that the groups of entrepreneurs have access to the modern
facilities, technologies, and practices that can enhance their productivity,
efficiency, and competitiveness in the global agricultural market,

Plan to balance the trade-offs and synergies between the different agricultural
products and sub-sectors, and between the different dimensions of
development, such as economic, social, environmental, and political,

Plan to measure and evaluate the progress and impact of the NET plan on the
agricultural sector and on Ethiopia’s economy and society?
These suggestions can help us to refine and strengthen our analysis and to affirm our
proposal for identifying the agricultural and related products as the top area of
interest for the NET plan.
Let’s tahe an examplery case of cultivation of Oilseeds and bio-fuel by
segmented enterprises working as unified large investors on a 50,000 ha:
holistic approach of private investment proposal which is to make its base on a direct
intervention of the government that citizens which are having no investment
potential will grow to become huge investors by way of forming a chain of small
enterprises which invest their resources in cultivation and export of oil seeds and
bio-fuel crops and plantation of fruit and bio-fuel trees, like pongamiapinnata to be
converted into bio-diesel. These groups of enterprises will be incorporated under
Ethiopia's Commercial Law, planning to invest in Agriculture and Bio fuel sectors
in the initial stage, in the Gambella Regional State. Afterwards, these groups of
enterprises will acquire500,000 hectares of land for the initial trial from the
Government of Ethiopia on long term lease basis for 50 years.
These groups of enterprises will develop the land in phased manner over the next 5
years and use it for cultivation of oilseeds, bio-fuel crops and other value added
crops. These groups of enterprises would export the edible & non-edible oilseeds for
the initial 4 years. Thereafter, they would establish the processing units and will
export fruit processed products of the oil seeds, juices and bio-diesel to the world
markets.
The project has the potential to contribute for socio-economic development of the
local community through employment generation, skill development and the overall
growth of our country. The project would also enhance foreign exchange earnings

32
for the Governmentand the energy security of Ethiopia. It can also further attract
Foreign Direct Investment into the agro-industry and allied sectors.
In the first year of operations, these groups of enterprises will conduct and complete
several surveys & studies, procurement of capital equipment & machinery and create
basic infrastructure. And they would develop approximately 10% of the leased land
in the first year. They will also conduct trials of different oilseedand food crops in
100 acres so as to verify suitability of the crops to the agro-climatic conditions of
the land allotted to them. With rising concerns for climate change, the demand for
liquid Bio-fuels is increasing and the prospects for the groups of enterprise’s
proposed project are expected to be bright.
Capital infusion is required mostly in the initial 5 years. Later on, the internal
accruals shall take care of further investments in the erection of processing
plants.These groups of enterprises will seek long term re1ationshp with the banks to
meet their funds requirements for the first 5 years, which need to be mediated by the
federal and regional government.
This case study may help to see the viability of such projects for further
consideration in the cultivation and export of oil seed crops and fruit trees for the
local and global market.
Some findings of the case-study are:
1. There is enormous business potential for export of oil seeds to global and
European market
2. The groups of enterprises will have a yearly projected average gross profit for
10 years from export of oilseeds, generating average net profit and average
net cash inflow from investing a certain amount of money on the project
3. Using the major investment decision techniques, cultivation and export of oil
seeds is found to be extremely attractive showing the following indicators:
4. Varied conclusion drawn from the study is that the project is remarkably
viable to be implemented.
About 146 types of crops are grown in Ethiopia, the majority ones being cereals,
pulses, and oilseeds. Pulses comprise beans; peas, chickpeas, lentils, soya beans and
haricot beans. Oilseeds grown in Ethiopia are several variety; the major ones are
Niger seed, linseed, sesame seed, soybean, sunflower, groundnut, rapeseed,
safflower and castor beans.

33
The climatic diversity, which the country is endowed with, and the multiple usages
of crops have enabled the vast majority of agriculture holders to produce various
cereals, pulses, oil seeds, spices and vegetables. Despite the variations in the volume
of production and the relative importance of the patterns of growth of these crops, it
is largely similar across the country.
The Ethiopian agriculture is typical of subsistence production. The low level of
production is largely attributed to traditional farming. Under this traditional sector,
the agricultural operations are carried out on private peasant holdings and most of
the products are mainly for own household consumptions.
Nevertheless, owing to the current strategy of the Ethiopian Government being
Agricultural-Led-Industrial Development which is under implementation, it is
believed that the quality and quantity of the products will meet the International
Market standards gradually through the introduction of commercial farms, by
providing extension service to the individual farmers and supplying agricultural
inputs like fertilizer, selected seeds, pesticides, farmers training etc.
The new economic policy is encouraging the role of the private sector in the
acceleration of the country's economic development. Investment incentives like
exemption from tax for certain period of years and from customs duty are some of
the regulations made by the government in order to attract investors to participate in
the business venture. These different policy directives are believed to bring a
sustainable development in the economy, particularly to be self-sufficient in the
supply of raw materials for food processing industries which are export Oriented.
Having recognizing the above facts which is the promising favorable potential
investment climate, I came to conclude that, these groups of enterprises will benefit
from investing in the cultivation and export of oilseeds and bio-fuel crops.
Description of the project nature;
The groups-of-enterprises-to-be, will be incorporated under the Ethiopian
Commercial Law. They will be established to invest in Agriculture, Fruits and Bio-
fuel sector in Ethiopia.
The groups-of-enterprises-to-be would primarily export oilseeds, fruits and bio-fuel
crops produced in the initial four years and secure feedback for bio-diesel by
growing non-edible oilseed crops like pongamia pinnate.
As pongamia starts yielding, the crops are perennial with a gestation of eight years,
intercropping of seasonal of around four months duration oil crops like sesame,

34
soybean; safflower and sunflower are proposed to cultivate and export to make the
best use of the resources.
The groups-of-enterprises-to-be will have to enter in to agreement with the Ministry
of Agriculture and Rural Development of the Federal Democratic Republic of
Ethiopia for leasing 50,000 hectares of land, on long term basis for cultivation of
bio-fuel, oilseed, Fruit Trees and other value-added crops. Consequent to this
agreement the local government shall give possession of 50,000 hectares of land.
Afterwards, the groups-of-enterprises-to-be will start carrying out such activities as
studies like Environment Impact Studies, Topographical Survey, Soil and Water
Analysis, collection of meteorological data like temperature, rainfall, humidity etc.,
water harvesting structures, irrigation facilities, and geo-morphological study.
Along with these studies, the groups-of-enterprises-to-be will also collect baseline
data for carrying out developing indicators for monitoring and evaluation of various
parameters like the way the project is impacting:
 People's way of life, i.e. farming, livestock rearing, interactions & migration
etc.,
 Environment which includes quality of air & water, availability and quality of
food, levels of hazards & risks and access to and control over resources,
 Health and wellbeing.
These studies shall be completed within the first year from the date of actual
possession of the land. Along with this the company will cultivate seasonal oilseeds
for edible oil purpose and other crops of higher commercial value as intercrop
between Fruit Pongamia plants for optimum utilization of resources in the initial
years of the project and thus contribute to the food security of Ethiopia.
The groups-of-enterprises-to-be will conduct trials on various plots of the allocated
land of different oilseed and food crops, cultivations of biomass significance so as
to verify suitability of the crops to the agro-climatic conditions of the land allotted
to the groups-of-enterprises-to-be.
After year zero, in year one, the cultivation of the seasonal crops shall be carried out
on 4,000 hectares in the first year of operation and would be progressively increased
from there on to 50,000 hectares in 5 years.
The groups-of-enterprises-to-beneed to plan to setup of modernfruit processing, oil
expelling and solvent extraction units in the fifth year of their commercial operations

35
and produce the ready-to-use packed fruit juices, edible oil/ bio-diesel from the oil
seed / biomass crops.
The groups-of-enterprises-to-be will also sell such byproducts as wastes from juicers
and de-oiled cakes, generated out of oil expellers either as animal feed or as organic
fertilizers for farm use and other by products such as glycerin.
They also haveto plan to, use a large quantity of bio-mass generated out of the
cultivation for generating power for their captive use as well as for sale to the
national grid as required. The groups-of-enterprises-to-beare required to explore the
possibility of acquiring technology for direct conversion of biomass to second
generation green diesel.
The Project requires a large investment worth in billions of birr spread over five
years. Though the project period is for about fifty years, capital infusion is required
only in the initial five years. Later on, the internal accruals shall take care of further
investments in erecting processing plants. The groups-of-enterprises-to-be will seek
long term relationship with the Bank to meet their funds requirements for the first
five years.
The groups-of-enterprises-to-be are supposed to intend to continue their business
activity in Ethiopia for a minimum of 50 years period as most fruit and pongarmia
trees have long life spans span. The land lease period will therefore be for not less
than 50years with a further extension for another term.
Rationale of The Project
The rationale for selecting agricultural end products has many reasons.
✓ The Federal Government of Ethiopia has issued Agricultural Led Industrial
Development strategy, which is under implementation.
✓ The country is blessed to grow variety of agricultural products in the high
lands and low lands.
✓ The government issued export lead industrial development strategy policy,
which is backed by Bank loan package with reasonable interest rate.
✓ Various investment incentives by the Federal Investment Agency, like excise
tax, duty free privilege for capital goods importation, income tax holiday etc.
✓ Employment opportunity to the local people.
✓ Source of foreign currency for the country
✓ Agricultural products will be used as raw material inputs for food processing
industries for both domestic and international market

36
 ✓ The availability of promising international market

Market Analysis
Ethiopia has an attractive portfolio of high value oil seeds for export market. Oil
seeds are mainstay of the rural and national economy in Ethiopia. After coffee, oil
seeds are the second largest export earner for the country and already more than 3
million small holders are involved in its production. The present oil seeds production
in Ethiopia is labor intensive, low input and rain-fed resulting into low productivity.
For most of oil seeds crops, yields are observed below I ton/ha. The productivity
level per hector can be doubled with higher input combined with improved quality
of seeds and adequate soil, water, and crop management practices. The huge tracts
of fertile land mechanization will keep the costs low and boost the production growth
and enhance export potentials.
There is enormous business potential for export of oil seeds and thereby products to
global and European markets. The global vegetable oil market is moving on factors
much beyond the demand supply fundamentals Rising crude prices, bio-fuel demand
in general land bio-diesel in particular, competition from other crops for acreage,
continuing government support to encourage bio-energy (USA, EU) and overall rise
in agricultural commodity prices have all combined to push the market higher.
Export of oil seeds actually consists of sesame, soy bean, niger, castor oil, linseed,
sun flower and safflower for which there is a growing demand in the world market.
The growing demand in the world market for these specialty products and the
available capacity to expand production could make oil seeds turn into one of the
engines of economic growth of Ethiopia. The major importers of Ethiopian oilseeds
in the EU are the Netherlands, Germany, Japan, Greece and UK. These countries use
the imported oil seeds for their food industry, cosmetics and industrial purposes. As
of today, oil seeds are exported as much without any value addition in Ethiopia. The
edible oil and meal has got huge demand in EU. For example, the EU-27 countries
are largely demanding up on imports for soybean meal and oil. As the nature of the
project is export oriented, the promising customers of the, oil seed products are the
food processing industries in Europe, Fareast, Arab Countries, Canada, USA,
African countries, etc....

37
Hence, the export business opportunities can be fully exploited by ensuring efficient
marketing, proper cleaning and high quality standards in oilseed crushing and
refining plants.
Eventhough oilseeds are the second biggest export earner of Ethiopia, the country
depends upon foreign countries for edible oil needs. Ethiopia imports large quantities
of soybean and palm oil. A policy brief on the Ethiopian edible oil sector reveals
that domestic production is of only 40,000 tons of edible oil annually (which is 20%)
against the demand of 2,000,000 tons. (figures need to be updated)..
Therefore, Ethiopia has to import up to 1,600,000 tons of edible oil annually. Thus
the value of imported edible oil is 40 to 50% of the export earnings of oilseeds.
From the total investment cost, about 30% of the total need will be met by equity
contribution. And the remaining 70% is to be financed by bank loan.
Major Assumptions to be taken into consideration,
Cost of the project:
• Site clearance and initial plantation of oil seeds
• Site clearance and initial plantation of edible oil crops,
• Infrastructure, social development and, plant machinery and equipments
Socio-Economic Benefits
Cultivation and export of oil seeds have the following social and economic benefits:
I. Social Benefits
1. The County's vast unutilized land can be used for productive purposes
2. It will create ample number of direct and indirect job opportunities in different
fields at all levels,
3. It will bring about development of hinterlands and villages
4. Water harvesting measures will help in conserving precious rain water.
5. The plantation activity would reduce the soil erosion, water runoff and attract
more rain.
6. The greater use of Bio-Fuels would reduce CO2 emission thus help fight
global warming
II. Socio-economic benefits to the Local Community:
a. The medical facility at the site shall be offered to the needy people of the local
community as a welfare measure,

38
 b. Unemployed workers shall be trained in various vocations and successful
workers shall be offered employment in the project
III. Economic Benefits
1. Such projects shall result in considerable foreign exchange earning,
2. Substantial tax revenue shall accrue to the government.
3. Earning of the lease rental from the vast underutilized land,
4. The country can reduce its dependence on Import of Diesel, Bio-diesel and
achieve some energy security.
5. Development of Ancillary Industries e.g. transport, organic farming etc.
6. May attract further Foreign Direct Investment (FDI) from the Promoters and
other foreign industries
Conclusion from this simple case study shows us that, based on the viability
measurements the such projects are quite viable to be implemented and will
significantly benefit the local society and the country at large.
Ethiopia has a potential in the production of palm oil, rubber, dates,
and jacaranda, especially in the following areas:
 Palm oil: Ethiopia has a suitable agro-ecological condition for oil palm
cultivation, especially in the lowland areas of Gambella, Benishangul-Gumuz,
and Southern Nations, Nationalities, and Peoples' Region (SNNPR). The
country has an estimated potential area of 500,000 hectares for oil palm
development, which could produce up to 2.5 million tons of crude palm oil
per year. However, the current production of palm oil is very low, with only
1,000 hectares of oil palm plantation established by a Malaysian company in
Gambella. The main challenges for palm oil development in Ethiopia are the
lack of improved planting materials, technical expertise, processing facilities,
and market linkages.

 Rubber: Ethiopia has a favorable climate and soil for rubber cultivation,
especially in the western and southwestern parts of the country. The country
has an estimated potential area of 300,000 hectares for rubber development,
which could produce up to 450,000 tons of dry rubber per year. However, the
current production of rubber is very limited, with only 6,500 hectares of
rubber plantation established by the Ethiopian Rubber Development
Enterprise and some private investors. The main constraints for rubber
development in Ethiopia are the high initial investment cost, the long gestation

39
 period, the lack of skilled manpower, the inadequate infrastructure, and the
competition from other crops.

 Dates: Ethiopia has a huge potential for date palm cultivation, especially in
the Afar region, which has a large sedimentary basin, the Ogaden Basin, that
is suitable for date palm plantation. The region has a harsh climate with
temperatures reaching up to 50°C, which is ideal for date palm growth. The
country has an estimated potential area of 350,000 hectares for date palm
development, which could produce up to 1.75 million tons of date fruits per
year. However, the current production of dates is very low, with only 10,000
hectares of date palm plantation established by the Afar people and some
foreign companies. The main challenges for date palm development in
Ethiopia are the lack of improved varieties, the poor irrigation system, the
high incidence of insect pests, and the low market demand.

 Jacaranda: Ethiopia has a suitable environment for jacaranda cultivation,

especially in the highland areas of Amhara, Oromia, and SNNPR. Jacaranda
is a fast-growing and drought-tolerant tree that produces beautiful purple
flowers and valuable timber. The country has an estimated potential area of
100,000 hectares for jacaranda development, which could produce up to
500,000 cubic meters of timber per year. However, the current production of
jacaranda is very small, with only a few hectares of jacaranda plantation
established by some NGOs and private farmers. The main opportunities for
jacaranda development in Ethiopia are the high demand for ornamental and
landscaping purposes, the high value for furniture and handicrafts, and the
environmental benefits for soil conservation and carbon sequestration .

AFFORESTATION
It is extremely terrifying that we are almost completely going out of the natural forest
coverage, a blood line to a sustainable future of our countries economy and general
well- being.
It has been evidently proven that government protectionism is futile to keep tree
loggers from illegal deforestation activities. Rather, I would suggest privatizing the
whole/most of the land in the country that is available for planting trees to be owned
and operated by private based entities and yet administered under a national
regulation to avoid abuse of land and vegetation ownership rights.

40
 Go to IKEA adopt their business and product model in higher supply chains! →
Plant trees of the best commercial value in the international and domestic market,
i.e
Rubber Trees Olive Trees
Fruit Trees etc…
→ Adopt Spanish, Israeli olive tree plantation and oil harvesting practices to the
Ethiopian context,
→ Plant trees adjacent to the road corridor throughout the nation in as much number
of rows as possible.

Bee Keeping
Beekeeping is an activity that can contribute to job creation and economic
development in many ways. According to the web search results, some of the
benefits of beekeeping are:
✓ Beekeeping can provide income and livelihood opportunities for rural and
urban populations, especially for women and youth, who can engage in honey
production, processing, and marketing.
✓ Beekeeping can enhance food security and nutrition, as honey and other bee
products, such as pollen, propolis, and royal jelly, are rich sources of energy,
protein, vitamins, and minerals.
✓ Beekeeping can support environmental sustainability and biodiversity, as bees
play a vital role in pollinating crops and wild plants, which increases crop
yields and quality, and preserves natural habitats and ecosystems.
✓ Beekeeping can foster social inclusion and empowerment, as beekeepers can
form cooperatives and associations, and participate in local decision making
and governance processes.
Therefore, beekeeping can be considered as a valuable and viable option for local
economic development, as it can generate multiple benefits for individuals,
communities, and the environment.
Honey and ‘Xazma’
 Every farming mini-cluster should set up modern bee-keeping and ‘xazma’
bee keeping practices that would be collected to be industrially processed at
higher clusters,

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Beef Production
Beef production is an important sector that can contribute to job creation and
economic development in many countries. some of the benefits of beef production
are:
 Beef production can provide income and livelihood opportunities for rural and
urban populations, especially for smallholder farmers, pastoralists, and agro-
pastoralists, who can engage in cattle rearing, fattening, and marketing.
 Beef production can enhance food security and nutrition, as beef and other
cattle products, such as milk, cheese, and butter, are rich sources of protein,
iron, zinc, and vitamin B12, which are essential for human health and
development.
 Beef production can support environmental sustainability and biodiversity, as
cattle can utilize marginal lands, crop residues, and by-products, and provide
manure and draught power for crop production and soil fertility.
 Beef production can foster social inclusion and empowerment, as cattle can
serve as a store of wealth, a source of social capital, and a means of risk
management and resilience for vulnerable households and communities.
However, beef production also faces some challenges and risks, such as:
▪ The low productivity and profitability of beef production, which is affected
by factors such as poor genetics, inadequate feed and water, diseases and
parasites, and lack of infrastructure and services.
▪ The high greenhouse gas emissions and environmental impacts of beef
production, which can contribute to climate change, land degradation, water
pollution, and deforestation4.
▪ The increasing competition and demand for beef and cattle products, which
can create pressure on natural resources, markets, and prices, and affect the
food security and livelihoods of the poor.
▪ The potential transmission of zoonotic diseases, such as bovine tuberculosis,
brucellosis, and anthrax, which can pose a threat to human and animal health
and welfare.
Therefore, to leverage the potential of beef production for job creation and economic
development, it is necessary to address these challenges and risks, and to pursue a
comprehensive and coordinated approach to beef production development, which
can involve the following actions and measures:

42
 Improving the quality and quantity of beef production, by supporting the
adoption and innovation of improved breeds, feeds, health, and management
practices, and by enhancing the capacity and competitiveness of beef
producers and processors.
Improving the access and reliability of markets and finance, by supporting the
development and integration of local, regional, and global value chains, and
by facilitating the compliance with quality and safety standards and
regulations.
Improving the resilience and sustainability of beef production, by supporting
the adoption and adaptation of climate-smart and environmentally-friendly
practices, and by enhancing the prevention and control of zoonotic diseases.
Improving the dialogue and partnership among the different stakeholders, by
creating and maintaining platforms and networks for communication and
consultation, by building trust and confidence, and by ensuring mutual
benefits and accountability.
By implementing these actions and measures, I believe that beef production can
contribute to job creation and economic development
Take into account the beef cattle keepers at Adama’s entrance.
30 (1) 30 (2) 30 (3) 30 (4)

30 (5) 30 (6) 30 (7) 30 (8)

30 (9) 30 (10)

Total 300 oxen (pig)? 20 klg/week x300 =>24000 kg/month these private entities be
grouped-on into a mini-cluster of a private limited company that will be a fifth stake
holder in a middle cluster plc. to finally form a major cluster that would take their
product into a final product and reach to the local and inter-national market.

Meet ranching Butchery

Meet Processing
Hide, for leather factory

Branding, Labeling and

Horn, for Artifacts Marketing

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Benefits to be gained for private stakeholders merging into associations -
Members of the supply chain will share common amenities, such as:
✓ Trucks
✓ Warehouses
✓ Utility lines
✓ Expertise services
✓ Affordable food and medicals
✓ Financial, legal services
✓ Security services
✓ Reasonable price for their produce,
✓ Freezing facility
✓ Road access
Poultry and Fish Farming
Poultry and fish farming are two important and profitable agricultural activities that
can contribute to the food security, income generation, and livelihood improvement
of the rural communities in Ethiopia. However, these activities require modern and
sustainable practices and technologies, as well as adequate support and coordination
from the local authorities and other stakeholders. Therefore, integrating the culture
of modern poultry and fish farming into communities who had favorable natural
conditions or could potentially develop within their nearby premises is a worthwhile
goal that can be achieved by following some steps, such as:
 Conducting a feasibility study and a baseline survey to assess the potential
and the challenges of poultry and fish farming in the target areas, such as the
availability and quality of land, water, feed, and market, the existing
knowledge and skills of the farmers, and the environmental and social impacts
of the activities.

 Developing a supply chain economy model that can link the poultry and fish
farmers with the input suppliers, processors, traders, and consumers, and that
can ensure the quality, safety, and profitability of the products. The model
should also consider the integration and complementarity of poultry and fish
farming, such as using poultry manure as fertilizer for fish ponds, and using
fish waste as feed for poultry.
 Providing technical and financial support to the poultry and fish farmers, such
as training them on the best practices and technologies of poultry and fish

44
 farming, such as breed selection, housing, feeding, health management, and
waste management, and facilitating their access to credit, insurance, and
subsidies.
 Establishing and strengthening the institutional and regulatory framework for
poultry and fish farming, such as creating and empowering cooperatives and
associations of poultry and fish farmers, setting and enforcing standards and
regulations for poultry and fish production and marketing, and monitoring and
evaluating the performance and impact of the activities.
 Promoting the awareness and demand for poultry and fish products, such as
educating the consumers and the public about the nutritional and economic
benefits of poultry and fish consumption, and creating and expanding the
market opportunities for poultry and fish products, such as through branding,
labeling, and advertising.

Suppose every farmer keeps chicken in modern shades, an egg laying modern breeds
of 100 hens:
✓ A mini cluster of 20 farmers would form a plc and start a green grocery in a
nearby town to sell their produce with other vegetables,
✓ Form middle cluster to setup a biscuit factory in a major town, and supply
their extra over egg and other factory inputs,
✓ Major cluster would collect standard quality products, label, make branding
and market it into everywhere,

ENERGY AND MINING

During my feasibility study job in Ethiopian Mineral Resources Development S.C,
I came to learn that the Tantalum raw material we have been exporting abroad is
processed to the required purity level and get a tenfold worth.
Hence, the NET plan could be interpreted in the Mineral Resources sector and enable
our country get the best of our mineral resources by processing them to their end
products for consumer use.
The implementation of the national transformation plan in the mineral resources end
products category involves the following aspects:

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 Developing the mineral industry value chain, by enhancing the exploration,
extraction, processing, and marketing of mineral resources, and by promoting
the development of downstream industries, such as metal fabrication,
chemical production, and construction materials.
Improving the governance and legislation of the mineral sector, by
establishing clear and transparent policies, laws, and institutions, and by
ensuring the participation and accountability of all stakeholders, including the
government, the private sector, the civil society, and the local communities.
Mapping and inventorying the mineral resources, by conducting geological
and geophysical surveys, updating the mineral database, and disseminating
the mineral information to potential investors and developers.
Enhancing the technology and innovation of the mineral sector, by adopting
modern and environmentally friendly methods and equipment, and by
fostering research and development, and knowledge and technology transfer.
Developing the human capital of the mineral sector, by improving the
education and training of the mineral workforce, and by creating more
employment and income opportunities for the youth, women, and the poor.

The implementation of the National Economic Transformation plan in the mineral

resources end products category aims to achieve the following outcomes:
 Increasing the contribution of the mineral sector to the GDP,
 Diversifying the mineral export products and markets, from mainly gold and
gemstones to other minerals, such as potash, tantalum, iron, nickel, and coal.
 Enhancing the value addition and beneficiation of mineral resources, by
increasing the share of processed and manufactured mineral products in the
total mineral exports,
 Improving the social and environmental sustainability of the mineral sector,
by ensuring the respect and protection of human rights, the promotion of
community development, and the conservation of natural resources.

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HEALTH AND WELLNESS
The public sector is the main provider of health care service, especially for primary
health care, which is organized into a three-tier system of health posts, health centers,
and hospitals. The private sector consists of for-profit and not-for-profit
organizations, such as clinics, pharmacies, laboratories, and NGOs. The traditional
and faith-based healers offer various forms of alternative and complementary
medicine, such as herbal remedies, spiritual healing, and bone setting.
The quality and accessibility of health care service in Ethiopia vary widely across
regions, urban and rural areas, and socioeconomic groups. Ethiopia faces many
challenges in improving its health care service, such as inadequate funding, shortage
of skilled health workers, low coverage of essential health services, high burden of
communicable and noncommunicable diseases, and weak health information
system. However, Ethiopia has also made significant progress in expanding its
health care service, such as increasing the number of health facilities, implementing
the Health Extension Program, introducing the community-based health insurance
scheme, and reducing the maternal and child mortality rates. The national
transformation plan of Ethiopia is a comprehensive and ambitious plan to achieve
economic and social development in the country. One of the key sectors that the plan
focuses on is health, which is essential for improving the well-being and productivity
of the population. The plan aims to expand health care service in Ethiopia by
implementing the following strategies:
✓ Improving the quality and equity of health service delivery, by ensuring that
all people have access to essential health services, regardless of their location,
income, or gender. The plan also seeks to improve the quality and safety of
health care, by setting and enforcing standards, guidelines, and protocols, and
by strengthening the supervision and accountability of health providers.

✓ Transforming the woreda (district) health system, by enhancing the planning,

management, and coordination of health activities at the local level. The plan
also aims to empower the woreda health offices and the health extension
workers, who are the frontline health workers in the rural areas, to provide
effective and responsive health care to their communities.

✓ Promoting compassionate, respectful, and caring health professionals, by

improving the motivation, performance, and retention of health workers. The
plan also strives to create a culture of professionalism, ethics, and excellence

47
 among health workers, and to foster a positive and respectful relationship
between health providers and clients.

✓ Revolutionizing the health information system, by improving the collection,

analysis, and use of health data for decision making and learning. The plan
also aims to leverage the potential of information and communication
technology, such as mobile phones, internet, and electronic health records, to
enhance the efficiency and effectiveness of health service delivery³.

The application of the national economic transformation plan in expanding health

care service in Ethiopia should resulted in some notable achievements, such as:
 Increasing the number of health facilities, especially health posts and health
centers, which are the backbone of the primary health care system. The plan
has also improved the availability and distribution of essential medicines,
equipment, and supplies in the health facilities.

 Implementing the Health Extension Program, which is a flagship program that

trains and deploys female health extension workers to provide basic and
preventive health services to the rural population. The program covers 16
health packages, such as maternal and child health, family planning,
immunization, hygiene and sanitation, and nutrition.

 Introducing the community-based health insurance scheme, which is a

voluntary and contributory scheme that aims to improve the financial access
and protection of the rural and informal sector population to health care. The
scheme should cover a comprehensive benefit package, including primary,
secondary, and tertiary care.

 Reducing the maternal and child mortality rates, which are key indicators of
the health status and development of a country. The plan should result in
reduction of the maternal mortality, the under-five mortality rate, and the
infant mortality rates.

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CONSTRUCTION AND INFRASTRUCTURE
Infrastructure and communication development are important components of the
national economic transformation plan of Ethiopia. The plan aims to leverage
information and communication technologies (ICT) to support and enhance the
economic and social development of the country, and to transform Ethiopia into a
leading tech hub in the region. Some of the main objectives and strategies of the plan
are:
 To expand the ICT manufacturing industry, by attracting local and foreign
direct investment, creating ICT parks and incubator projects, and promoting
innovation and entrepreneurship.
 To modernize the ICT infrastructure, by increasing the number of mobile,
broadband, and internet data users, enhancing narrowband internet and fixed
telephone services, and expanding international link capacity.
 To improve the quality and equity of ICT service delivery, by ensuring
universal access and affordable prices, setting and enforcing standards and
regulations, and strengthening the supervision and accountability of ICT
providers.
 To transform the woreda (district) health system, by enhancing the planning,
management, and coordination of health activities at the local level, and
empowering the woreda health offices and the health extension workers to
provide effective and responsive health care to their communities using ICT.
 To promote compassionate, respectful, and caring health professionals, by
improving the motivation, performance, and retention of health workers, and
fostering a culture of professionalism, ethics, and excellence among them
using ICT.
 To revolutionize the health information system, by improving the collection,
analysis, and use of health data for decision making and learning, and
leveraging the potential of ICT, such as mobile phones, internet, and
electronic health records, to enhance the efficiency and effectiveness of health
service delivery.
 To support the implementation of the nationally determined contributions
(NDCs) to the Paris Agreement on climate change, by using ICT to monitor
and report the greenhouse gas emissions and mitigation actions, and to

49
 enhance the resilience and adaptation of the vulnerable sectors and
communities to the impacts of climate change.
The plan also recognizes the need to address the challenges and risks associated with
ICT development, such as the digital divide, cyber security, data protection, and
ethical issues. The plan therefore calls for the development of appropriate policies,
laws, and institutions to ensure the safe, secure, and responsible use of ICT for the
benefit of all Ethiopians.

Addressing the Housing Problem

In order to transform the living standards of Ethiopians in regard to housing
standards, a new division of administration should be setup at all Ana, Zone and
Regional offices, that will be responsible for the introduction of low cost, modern
and aesthetically appealing residential units, which will be built from locally
available materials, with the best of building practices from around the world.
 Condominiums
Being among the nicest government interventions ever taken to reduce shortage in
residential housing, it has got certain setbacks in the planning and implementation
stages.
Setting aside all the other issues which need to be addressed, let’s take a look at why
the program has got too sluggish in to achieve its target in time.
Though a number of reasons to mention, the general answer would be that – the
Government has not been capable! Whereas the public is somehow capable! (if
government could act the catalyst role).
Think of the ‘nowhere in the world’ land price in our capital, in a sharp contrast to
our world-renowned poverty status, clearly indicating that: resources, problems and
opportunities have been poorly managed.
Then, it does not need a genius to guess how quickly the housing issue would be
solved if the principles of the NET would be implemented and people be invited to
join into their levels of group to build their own apartments in a similar manner to
the US mortgage system adapted to suit the Ethiopian context.

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Property Maiden Management
Property maiden management is a term that refers to the process of taking over and
managing a property that has been abandoned, neglected, or underutilized by its
previous owner. Property maiden management can be done by the government, a
private company, or a community organization, depending on the legal status and
the purpose of the property.
Consider taking over privately owned company’s infrastructure industry or other
projects of significance to the national economy estimate actual values at the time of
taking over by means of a well- established committee of evaluates to be given a
appropriate value for future litigations so that the relevant government agency would
run the property, i.e. a number of standard large building projects in Addis Ababa
would be revived and be completed to give service.
The government should take over privately owned company’s infrastructure industry
or other projects of significance to the national economy, estimate their actual
values, and run them for public service.
The idea of property maiden management for the NET Plan is to use the
government’s power and resources to acquire and operate the infrastructure projects
that are owned by private companies, but are not contributing to the national
economy. This would help the government to achieve its economic goals, such as
increasing its export earnings, creating more jobs, and reducing its dependence on
imports, so that the government will have better capacity to provide better public
services, such as housing, transport, and energy.
However, we can also see some potential drawbacks and risks of this idea, such as:
✓ The legal and ethical issues of taking over private property without the consent
and compensation of the owners, which may violate their rights and interests,
and cause disputes and conflicts.
✓ The financial and operational challenges of estimating the actual values and
managing the properties, which may require a lot of expertise, capital, and
coordination, and may not be profitable or efficient.
✓ The political and social implications of interfering with the market and the
private sector, which may affect the business climate, the investment
attractiveness, and the public trust of the government.

51
Therefore, the idea of property maiden management for the NET Plan is an
interesting and ambitious one, but it also needs to be carefully evaluated and justified
before it can be implemented.

Brick Production
As the major product input for the production of most brick varieties is a widely
available earth material, we have to top into the most potential contained in the mass
production and use of this natural resource
People usually recognize cities with their residential housing facilities. Cities in
European countries mostly are made from this earthen material, which we have in
excess abundance.
Among the afore mentioned regulatory and obligatory measures government offices
should take will be the implementation of minimum housing and construction
standards.
Hence, every house should be built with the best standards from material locally
available.
Let's take an example: Build houses from brick in most parts of Western Oromia.
why? he soil is naturally very suitable to meet the geotechnical specifications for the
production of the finest brick quality, a building block almost entirely used in the
European civilization, even to-date.
Take note that, ever since the earliest times of the history of mankind, people started
building cities with brick.
what those early civilizations could achieve could by no means be a challenge to us
as long as we are equally humans as they are.
Brick production needs no inputs from abroad or factory products. All it takes is
good soil and heat. So, why Ethiopians are living in shanty mud houses and dream
of living in the western world residential, whose houses are almost entirely built
from brick?
Here, government should play the pivotal role of leading by example. Each woreda
administration should build classy residential houses of minimum ten units at a
median area to teach by example.
after the know-how experience is shared by local communities, these houses would
then be transferred to potential buyers in the community. After the necessary

52
awareness is created, a new regulation would be developed so as to put a certain
standard with regard to design and Construction.
The case of Contractors in Our Construction Industry
It known that substantial amounts of construction projects have increasingly been
taken by foreign contractors, mostly paid in foreign currency, whereas most grade-
1 companies and other lower grade contracting firms are panicking for projects,
which is resulting in a devastating loss to the country in a number of areas, i.e.: →
Shortage in foreign currency
✓ Exaggerated project costs
✓ Unemployment rate hikes
✓ Foreigners take most of the money they profited back home
✓ Continued reliance on foreign companies etc.,

Therefore, the government should suitably adapt the NET to be integrated in to the
construction industry.
Hence, from the discussion above, we can clearly observe that brick production is a
potential area for Ethiopia to develop its local building materials industry, as it uses
widely available earth materials and requires low inputs from abroad or factories.
Brick production can also help Ethiopia to improve its housing and construction
standards, as bricks are durable, fire-resistant, and energy-efficient. However, brick
production faces some challenges, such as the lack of improved technologies, the
high energy consumption, and the environmental impacts of firing.
The construction industry is a key sector for Ethiopia’s economic growth and
transformation, as it supports the development of infrastructure, real estate, and
industrial parks. The construction industry is also a major employer and a source of
foreign direct investment. However, the construction industry faces some
constraints, such as the limited access to credit and land, the unreliable electricity,
and the complex tax and trade regulations. The construction industry also suffers
from the competition and domination of foreign contractors, especially from China,
which affects the local contractors and the foreign currency reserve.

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OIL, GAS AND ENERGY
Ethiopia has a huge potential in the oil, gas and energy sector, especially in the
following areas:
Hydrocarbon exploration and production: Ethiopia has a large sedimentary basin,
the Ogaden Basin, which covers an area of 350,000 km2 and is estimated to contain
up to 4 trillion cubic feet of natural gas and 1.7 billion barrels of oil. The basin is
largely underexplored, with only 46 wells drilled so far. Several foreign companies,
such as China’s Poly-GCL, have signed exploration and production agreements with
the Ethiopian government and are conducting seismic surveys and drilling
activities12.
Renewable energy development: Ethiopia has abundant renewable energy resources,
such as hydro, wind, solar, geothermal, and biomass. The country has a total installed
power capacity of about 4,500 MW, of which 90% comes from hydropower. The
government plans to increase the power capacity to 25,000 MW by 2030, with a
focus on expanding renewable energy sources, such as geothermal (1,000 MW),
wind (2,000 MW), and solar (300 MW). Ethiopia also aims to become a regional
power exporter, with several interconnection projects under construction or planned
with neighboring countries34.
Energy access and efficiency improvement: Ethiopia has a low electrification rate,
with only 45% of the population having access to electricity in 2018. The
government has launched the National Electrification Program (NEP) in 2017,
which aims to achieve universal access to electricity by 2025, with a mix of grid and
off-grid solutions. The NEP also targets to increase the electricity access rate for
productive uses, such as agriculture, industry, and services, from 4% to 75% by
2025. Moreover, Ethiopia has a potential to improve its energy efficiency, especially
in the industrial and transport sectors, by adopting modern and energy-efficient
technologies and standards4.

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TRADE AND COMMERCE

Ethiopia has a potential in transforming its economy in the business sector,

especially in the following areas:

 Technology and knowledge-based industries: Ethiopia has a cost advantage

and a large pool of human capital that can be leveraged to develop technology
and knowledge-based industries, such as information and communication
technology (ICT), biotechnology, and engineering. These industries can help
Ethiopia to diversify its economy, increase its productivity and
competitiveness, and create more high-skilled jobs. However, to tap into this
potential, Ethiopia needs to improve its education and training system, invest
in research and innovation, and create a conducive business environment for
start-ups and entrepreneurs.

 Services sector: Ethiopia has a huge potential to expand its services sector,
such as telecom, utilities, finance, tourism, and logistics. These services can
support the growth of other sectors, such as agriculture and manufacturing,
and provide more opportunities for income generation and
employment. However, to realize this potential, Ethiopia needs to reform its
services sector, such as by privatizing state-owned enterprises, liberalizing the
market, enhancing the quality and efficiency of service delivery, and
strengthening the regulatory and institutional framework.
 Manufacturing sector: Ethiopia has a favorable condition for developing its
manufacturing sector, especially in light industries, such as textiles, leather,
agro-processing, and metal works. These industries can help Ethiopia to
achieve its industrial goals, such as increasing its export earnings, creating
more jobs, and reducing its dependence on imports. However, to overcome
the constraints in its manufacturing sector, such as limited access to credit and
land, unreliable electricity, and complex tax and trade regulations, Ethiopia
needs to improve its infrastructure and facilities, build its capacity and skills,
and simplify its business climate.

55
EDUCATION AND TRAINING
Education is at the top list of life lines for every nation’s growth and overall
existence, therefore, a body responsible for the well-being of a nation is supposed to
give full focus and put maximum emphasis on the material content of the educational
curriculum to be regularly adjusted to update knowledge and skills that are in greater
use for the nation, with the above in mind, I would like to give priority to higher
education for immediate impact on nation building.
At the very beginning, we must ask what sort of man power is needed at large so as
to propel Ethiopia out of poverty and attain a middle-class economic status.
Obviously, the answer will be that we should have a large mass of skilled labor to
work on farms, factories and the service industry.
Then, it is such a paradox to see the Ministry of Education, Sending hundreds of
thousands
To the over forty higher education facilities to study basic sciences and Art, which
have largely very little
Worth for our development aspiration, these largely meaningless allocations in
regard to youth potential, huge public spending and facilities used could be
harboring a much-needed middle level skilled manpower generation.
What Ethiopia’s economy could benefit from hundreds of thousands of basic science
and Art scholars to help transform the economy into a middle-class income status?
Surely, we need much less number for a few professions.
Rather, the MOE should work on equipping the youth on equipping with these much-
needed expertise’s in technics and art with specialties in specific professional
carriers.
the alignment of Ethiopia’s educational curriculum with the needs of the market and
the current demand of the world standard to enable the economic growth of the
country. You also suggest that higher education should be given priority for
immediate impact on nation building. I have searched the web for some relevant
information and found the following results:

According to a World Bank report, Ethiopia’s secondary education system is not

well aligned with the needs of the labor market and the economy. The report states
that the current secondary curriculum is too broad and academic, and does not

56
provide enough skills and competencies for employability and entrepreneurship. The
report also recommends that Ethiopia should reform its secondary education system
to make it more relevant, flexible, and responsive to the changing demands of the
economy and society1.
Ethiopia’s higher education system has a positive impact on economic growth, but
it also faces several challenges, such as low quality, low relevance, low access, low
equity, and low governance. The study suggests that Ethiopia should improve its
higher education system by enhancing its quality assurance, accreditation, and
ranking mechanisms, diversifying its funding sources and modes of delivery,
expanding its enrollment and equity, and strengthening its linkages with the industry
and the society.
Ethiopia’s education system should be aligned with the National Economic
Transformation (NET) Plan, which is a proposal for a new economic model for
Ethiopia that aims to achieve middle-income status by 2030. The paper argues that
Ethiopia’s education system should focus on developing human capital that can
support the growth and transformation of the economy, especially in the 12 Key
Economy Areas (KEAs) that have inherent competitive advantages for Ethiopia. The
countrie’s education system should adopt a competency-based approach, a modular
curriculum, a learner-centered pedagogy, and a continuous assessment system.

VOCATIONAL EDUCATION AND TRAINING

It is well understood that, if Ethiopia should be competitive in the global market, we
must make the most out of our competitive edges skilled labor and natural resources
that would last until we develop the capacity to invest in higher technologies.
Hence, we must equip the youth with the right type and level of knowledge and skill
that could effectively and efficiently serve our national economic transformation
target.
The majority of students graduating from high schools should join into distinct fields
of specialty programs as per up-to-date recommendation from market resource and
survey results.
Let’s take the case with a Civil Engineer, a discipline which takes five academic
years to complete in the bachelor degree program. Whereas, currently most
graduated are jobless and even those on the job are for the most part engage only a
little portion of their hard-earned knowledge into practical use. For instance, an
Office Engineer who is assigned for the task of becoming an AutoCAD operator for

57
years to come could have taken only three months of intensive AutoCAD training
and could become a much more professional CAD operator than unnecessarily
wasting all the energy, time, moral and scarce public resources in becoming a Civil
Engineer and to finally become only an AutoCAD operator.
In a similar fashion, we can list a number of other jobs just only in the Civil
Engineering sector, which could have been nicely performed with short trainings
and skill developments, rather than going for all the lengthy and costly academic
schemes to finally end up doing only a little segment of the vast educational
endeavor for the rest of life time. Let alone graduates in Biology, Chemistry and
Physics.
Here, we can look up to those countries like Germany and China, whose population
are more oriented in the technical and other demand driven fields of competency.
Higher academic qualifications are required in relatively much lesser quantities. So,
why are we sending all those youths to universities to attain Bachelors, Masters and
PHDs and finally end up with little to no success. Whereas, if these youths are taught
up to the needs of the market, there would be a radical change in the job market and
investment scenario of the country.
It is to be known that among the top reasons why investors are not attracted to invest
in Ethiopia is that the labor force does not have the required technical skills for their
manufacturing industries, even though salaries and wages are comparatively lower
than most investor destinations. As a result of our work forces poor productivity,
they often calculate productivity of a man from Ethiopia at embarrassingly a third of
(say) a Turkish. Therefore, costs are going to eventually rise for labor employment,
while still paying a tenth or less.
VET is an important strategy to develop the skills and competencies of the labor
force and to meet the demands of the market and the society. VET can also provide
opportunities for employment, entrepreneurship, and lifelong learning for the youth
and the adults. VET can also contribute to the social and economic development of
the country by enhancing productivity, innovation, and competitiveness.
According to the Federal Technical and Vocational Education and Training Institute,
Ethiopia has adopted a competency-based approach to VET since 2008, which aims
to align the training programs with the national occupational standards and the
industry needs. The competency-based approach also emphasizes the assessment
and certification of the learners based on their demonstrated performance and
outcomes1.

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However, there are still some challenges and gaps in the implementation of VET in
Ethiopia, such as the quality and relevance of the training programs, the availability
and accessibility of the training facilities and resources, the capacity and motivation
of the trainers and the trainees, the coordination and collaboration among the
stakeholders, and the monitoring and evaluation of the VET system2.
Therefore, I think there is a need for more research and policy dialogue on how to
improve the VET system in Ethiopia and to address the issues and challenges that
you have raised. I also think that there is a need for more awareness and advocacy
on the benefits and opportunities of VET for the youth and the society, as well as the
recognition and appreciation of the VET graduates and their contributions.

WHOLESALE AND RETAIL

One of the key sectors that the plan focuses on is trade, which is essential for
enhancing the productivity and competitiveness of the Ethiopian economy, and for
creating more jobs and income opportunities for the population. The plan aims to
implement the following strategies for the wholesale and retail trade sector:
To improve the trade facilitation and logistics system, by reducing the time
and cost of trading across borders, simplifying the customs procedures and
documentation, and upgrading the transport and storage infrastructure.

To diversify the export markets and products, by expanding the regional and
continental trade integration, such as the African Continental Free Trade Area
(AfCFTA), and by promoting the export of value-added and non-traditional
products, such as textiles, leather, and agro-processing.

To strengthen the domestic market and consumer protection, by ensuring the

quality and safety of goods and services, enforcing the standards and
regulations, and strengthening the supervision and accountability of traders.
To enhance the capacity and competitiveness of the private sector, especially
the micro, small and medium enterprises (MSMEs), by improving their access
to finance, technology, skills, and market information, and by fostering
innovation and entrepreneurship.

To promote the digital transformation and e-commerce, by leveraging the

potential of information and communication technologies (ICT) to improve

59
 the efficiency and effectiveness of trade service delivery, and by creating a
conducive environment and infrastructure for online transactions.
I agree that wholesale and retail trade should be conducted in an ethical way, taking
into account the rights and welfare of the producers and the service giving
community. Ethical trade is about having confidence that the products and services
we buy have not been made at the expense of workers in global supply chains
enjoying their rights². It encompasses a breadth of international labour rights such
as working hours, health and safety, freedom of association and wages². Ethical trade
involves companies taking a series of recognised steps to identify problems and
improve working conditions, with a focus on continuous improvement over time.
Some of the benefits of ethical trade for businesses include:
✓ Enhancing their reputation and brand image, by demonstrating their
commitment to social responsibility and sustainability.
✓ Improving their customer loyalty and satisfaction, by offering products and
services that meet the ethical expectations and preferences of consumers.
✓ Increasing their profitability and competitiveness, by reducing costs, risks,
and inefficiencies, and by fostering innovation and productivity.
✓ Strengthening their relationships and collaboration with suppliers, workers,
and other stakeholders, by building trust, mutual respect, and dialogue.
Some of the challenges of ethical trade for businesses include:
✓ Finding reliable and credible sources of information and verification, to
ensure that their suppliers and partners comply with the ethical standards and
practices.
✓ Balancing the trade-offs and costs of ethical trade, such as higher prices, lower
margins, longer lead times, and increased complexity.
✓ Dealing with the diversity and complexity of ethical issues and expectations,
which may vary across countries, cultures, and sectors.
✓ Managing the potential conflicts and trade-offs between ethical trade and
other business objectives and interests, such as quality, efficiency, and
profitability.

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MANUFACTURING AND INDUSTRIALIZATION
Industrial and Hand Craft Products
Setting up cottage industries for all sorts of hand craft products in all zonal districts,
bringing in and spreading adaptable technologies from all over the world, and enable
communities to acquiring knowledge and practices of know-hows to produce goods
from around the world by hiring trainers on a contract basis. I think these are
valuable and viable strategies that can help us achieve the NET plan goals and vision.
However, I also think that there are some challenges and risks involved in these
strategies, such as:
✓ The competition and compliance with the global and regional markets,
standards, and regulations, which may require high quality, efficiency, and
sustainability of the industrial and hand craft products, and which may impose
tariffs, quotas, and sanctions on the trade of these products.
✓ The protection and promotion of the local resources, culture, and identity,
which may be affected by the influx and diffusion of foreign technologies and
practices, and which may create conflicts and tensions among the different
ethnic, religious, and linguistic groups.
✓ The coordination and collaboration among the different stakeholders, such as
the government, the private sector, the civil society, and the international
community, which may have different interests and incentives in the
development and promotion of the industrial and hand craft products, and
which may face challenges in communication, trust, and accountability.
Therefore, I suggest that we also consider the following actions and measures to
address these challenges and risks, such as:
 Conducting a comprehensive and participatory market analysis and feasibility
study of the industrial and hand craft products, and identifying the most
competitive and profitable products and markets, as well as the most suitable
and sustainable technologies and practices, that can meet the local and global
demands and expectations.
 Establishing a clear and transparent framework and mechanism for the
transfer and diffusion of technologies and practices, such as the selection
criteria, the financing sources, the implementation partners, the monitoring
and evaluation indicators, and the feedback and learning loops.
 Enhancing the innovation and learning capacity of the Ethiopian people and
institutions, by supporting the development and integration of research and

61
 education, extension and advisory services, and entrepreneurship and
incubation programs, and by fostering a culture of creativity and
experimentation.
 Strengthening the dialogue and partnership among the different stakeholders,
by creating and maintaining platforms and networks for communication and
consultation, by building trust and confidence, and by ensuring mutual
benefits and accountability.
By implementing these actions and measures, I believe that we can develop and
promote the industrial and hand craft products in the reduction of unemployment,
and wealth creation to realize the NET plan.
Garment and shoe factories should be setup in all zonal districts,
All possibly adaptable technologies from all over the world, having national
benefit should be brought in and be spread throughout the country so as to
minimize our dependency on imported goods,
Acquiring knowledge and practices of know-hows to produce goods from
around the world bu hiring on a contract basis and let people get the necessary
skills.
Example (1) bring to Ethiopia, French cultural wine producers in the country side to
teach their know-how to Ethiopian people in the country side.
Example (2) bring to Ethiopia, Iran women with excellent carpet making skills to
train our women to make Persian carpets
Example (3) bring to Eth, Chinese ceramic kitchen ware makers to train Ethiopian
youth to help make ceramic kitchen items.

RE-ENGINEERING

Re-engineering of goods to reduce dependence on import is a strategy that aims to

substitute imported products with domestic ones, or to improve the efficiency and
quality of local production. This can help a country to save foreign exchange, boost
domestic industries, and enhance national competitiveness.

Re-engineering of older technologies to replicate technologies that are difficult to

adopt is a complex and challenging process. It involves understanding the needs and
preferences of the target users, the functionality and complexity of the new
technologies, and the feasibility and cost-effectiveness of the re-engineering process.

62
For one good example, our country is not capable as of the current situation to
manufacture automobiles for the usage of the public at large, while it is much more
possible to adapt to imitate technologies from the past and to re-engineer them, so
that we can start to produce vehicles by our own capacity.

Ethiopia has a very low motorization rate and relies heavily on imported second-
hand vehicles, mostly from Toyota. However, Ethiopia also has some local
automotive manufacturing and assembly plants, such as Bishoftu Automotive
Industry (BAI), which is run by the Ethiopian military and produces both civilian
and military vehicles. We also have some partnerships with foreign companies, such
as Hyundai and Volkswagen, to establish vehicle assembly facilities and localize
automotive components. These initiatives aim to make Ethiopia the largest car
manufacturer in Africa.

It seems that Ethiopia is already trying to re-engineer older technologies to replicate

new ones, but there are still many challenges and opportunities. Some of the factors
that may affect the success of this process are the availability of raw materials,
skilled labor, infrastructure, market demand, environmental impact, and government
policies.

Some examples of re-engineering of goods to reduce dependence on import are:

▪ Indonesia seeks to substitute 35% of imported products by 2022, especially

in sectors such as machinery, chemicals, metals, electronics, food, electrical
equipment, textiles, vehicles, and rubber1. The government has also imposed
higher taxes for imported commodities, required the use of B20 biofuel,
increased local content requirement for infrastructure, and provided local
goods to replace import products.
▪ India has implemented various policies to reduce its import dependence on
oil and gas, such as increasing domestic production, promoting renewable
energy, diversifying sources of supply, and enhancing energy efficiency.
▪ China has launched a campaign called “Made in China 2025” to upgrade its
manufacturing sector and reduce its reliance on foreign technology and
components. The campaign focuses on 10 strategic sectors, such as
information technology, robotics, aerospace, and biotechnology.

Re-engineering of goods to reduce dependence on import can have positive impacts

on a country’s economy, such as creating more jobs, stimulating innovation, and
increasing self-reliance. However, it can also pose some challenges, such as higher
costs, lower quality, trade disputes, and environmental issues.

63
Therefore, it is important to balance the benefits and risks of re-engineering of goods
to reduce dependence on import, and to adopt a pragmatic and cooperative approach
to global trade.

The Case of A Shoe Factory

Among the 4 basic human needs shoe is a part of them. Hence, all people need to
have it as a regular consumption good. Our economy, which is supposed it’s
competitive advantage over abundant natural resources cheap labor and favorable
climatic and other naturally end owned advantages should exploit from its potential
Government should put in place a tax embargo to prohibit import of shoes so that
local businesses could thrive.
Zonal authorities across the country should establish labor intensive standardized
shoe factory that runs based on its supplies from its down line supply chain,
Once the factory is set up and starts production it there are an remaining owner ship
shares are left, it will be sold out to the public,
The Case of a Cheese Factory
Cheese is a dairy product that can contribute to the development of the agricultural
sector, as well as the manufacturing and services sectors. Cheese production can also
create jobs, increase incomes, and improve food security and nutrition for the
population.
The case for a cheese factory taken into consideration in the implementation of the
National Economic Transformation program is an interesting one. Cheese is a dairy
product that can contribute to the development of the agricultural sector, as well as
the manufacturing and services sectors. Cheese production can also create jobs,
increase incomes, and improve food security and nutrition for the population.

According to the literature on economic transformation, the process of moving labor

and other resources from lower- to higher-productivity activities is necessary to
enhance the quality of economic growth, create jobs and reduce poverty in a long
term, sustainable and inclusive way. However, many developing countries face
challenges in achieving economic transformation, such as low productivity, limited
diversification, weak linkages, and unfavorable global conditions.

64
To overcome these challenges, countries need to adopt a multi-disciplinary approach
to identifying opportunities, diagnosing constraints and mapping out realistic policy
options, which can put their growth paths onto a more transformational footing.
This approach involves four steps: (1) measuring economic transformation, (2)
understanding the political economy context, (3) designing technically suitable
policy combinations, and (4) implementing policies in a politically smart way.
In the case of a cheese factory, the first step would be to measure the potential impact
of cheese production on the economy, using indicators such as labor productivity,
export diversification, value addition, and employment creation. The second step
would be to analyze the political economy factors that may affect the feasibility and
desirability of cheese production, such as the interests and incentives of different
stakeholders, the institutional capacity and governance, and the social and
environmental implications. The third step would be to design a set of policies that
can support cheese production, such as improving the quality and availability of
milk, providing access to finance and technology, enhancing the skills and
knowledge of workers and entrepreneurs, facilitating market access and trade, and
ensuring food safety and quality standards. The fourth step would be to implement
these policies in a way that can overcome the political and institutional constraints,
such as building coalitions, managing conflicts, sequencing reforms, and monitoring
and evaluating results.
By following this approach, the case for a cheese factory can be taken into
consideration in the implementation of the National Economic Transformation
program, as a way to promote economic transformation and inclusive growth in the
country.
The illustration shows the main actors and stakeholders in the dairy value chain, such
as dairy farmers, cooperatives, milk collectors, processors, retailers, consumers,
input and service providers, extension agents, research and education institutions,
civil society organizations, and government agencies. It also shows the main
products and services that are exchanged along the value chain, such as milk, feed,
veterinary services, cooling tanks, pasteurized milk, cheese, yogurt, butter, ice
cream, etc. It also shows the main challenges and opportunities that affect the
performance and competitiveness of the dairy value chain, such as low productivity,
poor quality, high costs, limited market access, food safety standards, innovation,
and partnership.

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Pasture land - Milk cows (European)
5 in 1 = 100 cows in total, min 25 Lt/day yield 100x25=2500 lts of milk
yield/day
→ A mini cluster of 5 sets makes preliminary stage cheese produce
→ A middle cluster of 5 mini clusters would refine the preliminary grade
cheese into a premium grade quality,
→ The major cluster of 5 middle clusters would doo branding, promoting and
distribution of cheese in the local and international markets ,
• ISO and other inter certificates should be obtained for management and
quality
• Other will be feasibility studies to be conducted to set up the system in place
,run by teams of experts from the relevant Professions and business community
i.e. Horticulturist, Agronomist, Economist, Marketers
✓ Proto type supply chain should be implemented by a local authority in
a well customized replica of the best practices from a foreign country,
known for their best cheese.
Once the supply chain is proven to function as intended, it will be sold out into the
private sector of within the NET plan model setup, so that finances, expertise and

66
other resources would go for another round of replicating the same in a different
area,

Benefits
Owning and running a state of the art facility from the bottom to the top of the supply
chain, so that efficiency and end product could match to the finest international
market grade.

TOURISM AND HOSPITALITY

The NET Plan strategy is a long-term low emission and climate resilient
development strategy that aims to achieve net zero emissions by 2050 and also seeks
to inspire others to increase their contribution to this collective effort1.

The NET Plan strategy is built on Ethiopia’s Climate Resilience and Green Economy
(CRGE) vision, which was launched in 2011 and outlines four pillars of green
growth: improving crop and livestock production practices, protecting and re-
establishing forests, expanding electric power generation from renewable sources,
and leapfrogging to modern and energy-efficient technologies1.

The NET Plan strategy also identifies tourism as one of the key sectors that can
contribute to the green economy and climate resilience of Ethiopia. The strategy
states that tourism can generate foreign exchange earnings, create employment
opportunities, promote cultural diversity, and enhance environmental conservation1.

Some of the specific actions that the NET Plan strategy proposes for the tourism
sector are:

Developing and implementing a national tourism master plan that aligns with
the CRGE vision and the Sustainable Development Goals (SDGs).

Promoting ecotourism and community-based tourism that support the

conservation of natural and cultural heritage and the empowerment of local
communities.
Enhancing the quality and diversity of tourism products and services, such as
wildlife, cultural, historical, religious, and adventure tourism.

Improving the infrastructure and facilities for tourism, such as roads, airports,
hotels, restaurants, and information centers.

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 Strengthening the institutional and regulatory framework for tourism, such as
establishing a national tourism board, developing standards and guidelines, and
enforcing laws and regulations.

Building the capacity and skills of the tourism workforce, such as training and
certifying tour guides, operators, and managers.

Increasing the awareness and marketing of Ethiopia as a tourism destination,

both domestically and internationally, using various media platforms and
channels.

The list of items that we have provided are also relevant and interesting ideas for the
development of the tourism sector within the NET Plan strategy. However, some of
them may require further feasibility studies, cost-benefit analyses, stakeholder
consultations, and environmental and social impact assessments before they can be
implemented. For example, the idea of positioning Ethiopia as a duty-free shopping
destination for tourist goods may have implications for the domestic market, the tax
revenue, and the trade balance of the country. Therefore, it is important to consider the
potential benefits and risks of each idea and prioritize them accordingly.

✓ Establishing dedicated entertainment zones,

✓ Organizing several events, concerts,
✓ Breading of endemic animals in protected areas and join them to national
parks,
✓ Development of National parks,
✓ Setting up animal Zoo’s,
✓ Setting up large cultural restaurants,
✓ Setting up museums, galleries,
✓ Positioning Ethiopia as a duty free shopping destination for tourist good

All items purchased in Ethiopia should be reimbursed for duties charges paid during
purchase within identified department stores, up on the purchaser’s departure from
the country. Hence, adopt practices from other countries i.e Germany, so that it can
be adopted and be implemented in our context.
• Establishing regional visit back age,

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 • Promote healthcare and SPA services suited to foreigners,
• Launching media campaign to promote Ethiopia as a suitable vacation
destination.

FINANCIAL SERVICES
Financial services are essential for the growth and development of any nation, as
they facilitate the mobilization and allocation of resources, the management of risks,
and the innovation and adoption of new technologies. Financial services can also
foster the inclusion and empowerment of the poor, the women, and the marginalized
groups, by expanding their access to economic opportunities and social protection.
Therefore, financial services can play a key role in achieving the National Economic
Transformation (NET) plan, which is a long-term development plan that aims to
transform Ethiopia into a middle-income country by 2030.
The NET plan has four pillars: (1) accelerating economic growth and structural
transformation, (2) enhancing human development and social inclusion, (3) building
resilience and sustainability, and (4) strengthening governance and accountability.
Financial services can contribute to each of these pillars in different ways, such as:
Supporting economic growth and structural transformation by providing
financing and investment opportunities for productive sectors, such as
agriculture, industry, and services, and by promoting diversification and
competitiveness in domestic and international markets.
Enhancing human development and social inclusion by providing affordable
and reliable financial products and services for the poor, the women, and the
youth, such as savings, credit, insurance, payments, and remittances, and by
facilitating their participation in the formal economy and the social security
system.
Building resilience and sustainability by providing mechanisms for risk
management and mitigation, such as disaster insurance, microfinance, and
social safety nets, and by encouraging green and climate-friendly finance,
such as renewable energy, clean technology, and environmental conservation.
Strengthening governance and accountability by improving the transparency
and efficiency of the public financial management system, such as budgeting,
taxation, and expenditure, and by enhancing the regulation and supervision of
the financial sector, such as prudential norms, consumer protection, and anti-
money laundering.

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However, financial services also face many challenges and constraints in fulfilling
their potential for fostering the growth and development of the nation, such as:
 Low levels of financial development and inclusion, as many people and
businesses still lack access to formal financial services, especially in rural
areas, and rely on informal and costly alternatives, such as moneylenders,
traders, and relatives.
 Weak and fragmented financial infrastructure, as the financial system suffers
from inadequate and outdated physical and digital infrastructure, such as
roads, electricity, telecommunications, and information technology, which
limit the outreach and quality of financial services.
 Inefficient and uncompetitive financial markets, as the financial sector is
dominated by a few state-owned banks and lacks sufficient diversity and
innovation in financial products and services, such as equity, bonds,
derivatives, and fintech, which hinder the mobilization and allocation of
financial resources.
 Inadequate and inconsistent financial policies and regulations, as the financial
sector operates under a complex and changing legal and institutional
framework, which creates uncertainty and instability for financial
intermediaries and users, and undermines the effectiveness and credibility of
the financial authorities.
Therefore, to leverage the role of financial services in fostering the growth and
development of the nation within the NET plan strategy, it is necessary to address
these challenges and constraints, and to pursue a comprehensive and coordinated
approach to financial sector reform and development, which can involve the
following actions:
✓ Expanding the access and affordability of financial services for the poor, the
women, and the youth, by promoting financial literacy and education, by
supporting the development and integration of microfinance institutions,
cooperatives, and mobile money operators, and by providing incentives and
subsidies for financial inclusion initiatives.
✓ Improving the quality and reliability of financial services for the productive
sectors, such as agriculture, industry, and services, by enhancing the
availability and diversity of financial products and services, such as credit,
equity, bonds, insurance, and leasing, and by strengthening the capacity and
competitiveness of financial intermediaries, such as banks, non-bank financial
institutions, and capital markets.

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 ✓ Developing and upgrading the financial infrastructure, both physical and
digital, by investing in the construction and maintenance of roads, electricity,
telecommunications, and information technology, and by supporting the
adoption and innovation of digital financial services, such as fintech, e-
commerce, and e-government.
✓ Reforming and harmonizing the financial policies and regulations, by
simplifying and streamlining the legal and institutional framework for the
financial sector, by enhancing the independence and accountability of the
financial authorities, such as the central bank, the ministry of finance, and the
financial regulators, and by improving the coordination and cooperation
among them and with other stakeholders, such as the private sector, the civil
society, and the international community.
By implementing these actions, financial services can foster the growth and
development of the nation within the NET plan strategy, and contribute to the
achievement of the 2030 Agenda for Sustainable Development, which is a global
plan of action for people, planet, and prosperity.

ADOPTION OF PRACTICES

Countries across the world possess some exceptional practices that need to be
adopted for the well-being of our country. with special emphasis given to those
developed nations making excellent gains from natural resources, we have to strictly
adopt their technology practices and workman ship into the Ethiopian context.
Our proposal is aimed in developing and implementing prototype projects that can
replicate the output efficiency of the best practices and technological advancements
in those sectors of top priority. I think this is a feasible and realistic approach that
can help us achieve the NET plan objectives and vision. However, I also think that
there are some challenges and risks involved in this approach, such as:
▪ The adaptation and integration of foreign technologies and practices into the
Ethiopian context, which may require significant investments, capacity
building, and institutional reforms.
▪ The protection and promotion of the local knowledge, culture, and identity,
which may be affected by the adoption of foreign practices and technologies.
▪ The coordination and collaboration among the different stakeholders, such as
the government, the private sector, the civil society, and the international

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 community, which may have different interests and incentives in the adoption
of practices and technologies.
Therefore, I suggest that we can take into consideration the following actions and
measures to address these challenges and risks, such as:
 Conducting a comprehensive and participatory assessment of the needs,
opportunities, and constraints of each sector and each region, and identifying
the most suitable and sustainable practices and technologies that can meet the
local conditions and demands.
 Establishing a clear and transparent framework and mechanism for the
transfer and diffusion of practices and technologies, such as the selection
criteria, the financing sources, the implementation partners, the monitoring
and evaluation indicators, and the feedback and learning loops.
 Enhancing the innovation and learning capacity of the Ethiopian people and
institutions, by supporting the development and integration of research and
education, extension and advisory services, and entrepreneurship and
incubation programs, and by fostering a culture of creativity and
experimentation.
 Strengthening the dialogue and partnership among the different stakeholders,
by creating and maintaining platforms and networks for communication and
consultation, by building trust and confidence, and by ensuring mutual
benefits and accountability.
By implementing these actions and measures, I believe that we can adopt the best
practices and technologies from all over the world, and adapt them to our own
context and needs, and thus foster the growth and development of our nation within
the NET plan strategy.
→ Some areas which need special attention:
Milk, beef and poultry products: Australia, Germany, Holland, Canada,
Forest industry, Furniture: Sweden
Irrigation: Israel, Egypt
Carpet making: Iran, Turkey
Porcelain: China
Rubber: Malaysia
Etc…

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After a careful adoption of the best practices and technological advancements in
those best performing nations, proto type projects will be developed and be
implements in the most similar replica with regard to output efficiency,
Here the initial stage of government intervention would be mandatory in almost
every sector to launch new projects and set the standard. Therefore, fully
implemented projects would be transferred to a certain hierarchy in the supply chain
structure.

ECONOMIC MAPPING
At the very initial stage of formulating the National Economic Transformation plan,
all parts of the country must be mapped based on the various economic interests,
such as:
 Climatic condition
 Natural resources
 River courses
 Soil fertility
 Land scape
 Mineral resources
 Population density Etc…

Economic mapping is a process of using maps to visualize and analyze the economic
characteristics and dynamics of a place. It can help to identify the strengths,
weaknesses, opportunities, and challenges of different regions, sectors, and
communities, and to inform policy and planning decisions. Economic mapping can
use various types of maps, such as:
 Political maps, which show the boundaries and names of countries, states,
provinces, cities, and other administrative units. Political maps can help to
understand the political context and governance structure of a place, and how
it affects its economic development. For example, a political map of Africa
can show the diversity and complexity of the continent, and the challenges of
regional integration and cooperation.

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  Climate maps, which show the patterns and variations of temperature,
precipitation, wind, and other climatic factors. Climate maps can help to
understand the natural resources and environmental conditions of a place, and
how they affect its economic activities and potential. For example, a climate
map of Ethiopia can show the different agro-ecological zones and their
suitability for different crops and livestock.

 Elevation maps, which show the height and shape of the land surface.
Elevation maps can help to understand the topography and geology of a place,
and how they affect its infrastructure, transportation, and accessibility. For
example, an elevation map of Addis Ababa can show the hilly terrain and the
challenges of urban planning and mobility.

 Economic or resource maps, which show the specific types of economic

activity or natural resources present in an area through the use of different
symbols or colors depending on what is being depicted. Economic or resource
maps can help to understand the economic structure and performance of a
place, and its comparative advantages and disadvantages. For example, an
economic map of Ethiopia can show the distribution and concentration of
different sectors, such as agriculture, industry, services, and tourism.
Economic mapping can also use interactive and online tools, such as the World Bank
Maps, which allows users to perform spatial analysis, search and overlay datasets
from various sources, browse and compare satellite imageries, and view the map of
World Bank lending projects locations. Another example is the Atlas of Economic
Complexity, which allows users to explore the economic dynamics and new growth
opportunities for every country worldwide, based on their exports and imports data.
Economic mapping can be a useful tool for economic evaluation, as it can help to
assess the costs and benefits of different policies and interventions, and to identify
the best locations and target groups for them. For example, economic mapping can
help to estimate the impact of a new road, a new school, or a new health center on
the economic activity and welfare of the surrounding areas and populations.
Economic mapping can also help to monitor and evaluate the progress and results of
economic development programs and projects, and to provide feedback and learning
for improvement.

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This mapping of the country should be seriously considered during the preparation
of implementation the master plan, after which a detailed work schedule and
methodologies would be developed to interpret the NET on the actual ground.
Preparation of An Action Plan
Implementation of the above discussed concept into an action plan involves
outlining the steps and resources needed to achieve the desired economic outcomes.
It can help guide the decision making and coordination of various stakeholders, such
as government agencies, private sector, civil society, and development partners.
Here are some possible steps to create an action plan for our economic
transformation plan:

Review our economic transformation plan and identify the key objectives,
targets, and indicators that we want to achieve. For example, we may want to
increase the productivity and competitiveness of our key sectors, diversify our
export markets, create more jobs and income opportunities, and reduce
poverty and inequality.
Break down our objectives into specific actions or initiatives that can be
implemented by different actors and sectors. For each action, specify the
expected outputs, outcomes, and impacts, as well as the timeline, budget, and
responsible parties. We can use a template to organize your actions in a clear
and concise way.
Prioritize our actions based on their feasibility, urgency, and potential impact.
We may want to use a criteria matrix or a scoring system to rank our actions
and select the most important ones to focus on. We can also group our actions
into short-term, medium-term, and long-term categories, depending on our
planning horizon.
Designate resources and roles for each action. Identify the human, financial,
and technical resources that are needed to implement each action, and allocate
them accordingly. We may also need to identify the roles and responsibilities
of different stakeholders, such as who will lead, coordinate, monitor, and
evaluate each action.
Establish a monitoring and evaluation system to track the progress and results
of our action plan. Define the indicators and targets that will measure the
performance and impact of each action, and collect the baseline data for
comparison. You may also need to set up a data collection and reporting
system, as well as a feedback and learning mechanism, to ensure that our
action plan is responsive and adaptive to changing circumstances and needs.
Communicate and disseminate our action plan to relevant stakeholders and
audiences. Explain the rationale, objectives, and benefits of our action plan,

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and solicit their feedback and support. We may also need to create a
communication strategy and plan to ensure that our action plan is well
understood and accepted by different groups and sectors.
Implement, review, and update our action plan regularly. Execute our actions
according to our timeline and budget, and monitor their progress and results.
We may also need to review and update our action plan periodically, based on
the feedback and learning from our monitoring and evaluation system. We
may also need to adjust your actions to respond to new opportunities and
challenges that may arise along the way.

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KEY FINDINGS
WHAT IS THE NATIONAL ECONOMIC
TRANSFORMATION PLAN?
The National Economic Transformation plan (NET) is a new
and ambitious 10-year development plan that aims to
transform Ethiopia into a prosperous, peaceful, and
democratic nation by 203012.
The NET plan builds on the achievements and lessons of the
previous Growth and Transformation Plans (GTP I and II)
that were implemented from 2010 to 2020345.
The NET plan is aligned with the United Nations
Sustainable Development Goals (SDGs), the African Union
Agenda 2063, and the Ethiopian Homegrown Economic
Reform Agenda12.
HOW WILL THE NET PLAN WORK?

The NET plan will be implemented through five-year rolling

plans that will be reviewed and updated periodically to
reflect the changing realities and priorities of the country12.
The NET plan will be guided by four strategic pillars:
economic transformation, social transformation,
environmental transformation, and governance
transformation12.
The NET plan will be supported by a robust monitoring and
evaluation system that will track the progress and impact of
the plan on various indicators and outcomes1
WHAT ARE THE EXPECTED OUTCOMES OF THE
NET PLAN?
The NET plan aims to achieve a number of ambitious
targets by 2030, such as:
Increasing the per capita income from $850 in 2019 to
$2,200 in 2030
Reducing the poverty headcount ratio from 23.5% in 2019
to 10% in 2030
Increasing the share of manufacturing in GDP from 5.4% in
2019 to 15% in 2030
Increasing the share of exports in GDP from 8.4% in 2019 to
20% in 2030
Increasing the forest cover from 15.5% in 2019 to 20% in
2030
Improving the quality of education, health, water,
sanitation, and other social services

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HOW ARE WE DOING?

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CONCLUSION
The National Economic Transformation Plan is a proposal for a new economic model for
Ethiopia, which aims to propel the country towards becoming a middle-income nation by 2030.

The plan is based on the recognition that Ethiopia needs to economically transform to join the
group of middle-income nations, and that the current economic approach is not sufficient to
achieve this goal. The plan outlines the rationale, the objectives, the strategies, and the
implementation mechanisms of the new economic model, and calls for the government to
initiate a nationwide inception of the plan.

The plan also identifies 12 Key Economy Areas (KEAs) that have inherent competitive
advantages for Ethiopia, and suggests prioritizing investments and policy support in these
areas. The plan emphasizes the need for private sector-led growth, policy and regulatory
reforms, and stakeholder participation and collaboration in the new economic model.

The plan concludes by urging all Ethiopians to join hands in seizing new opportunities and
persevering in the journey towards economic transformation.

THANK YOU !

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