Spin-offs, Joint Venture will spur growth – Ethiopian scholar

October 7, 2019
A Minister and Special Advisor to the Ethiopian Prime Minister, Dr. Arkebe Oqubay, believes encouraging more foreign direct investments into the country will impact on the local economy, as capacity of skilled locals will be enhanced.

For him, it is critical to create an ecosystem; and providing additional support mechanisms and targetting professionals working in the factories to gradually graduate and set up their own firms remain the two key strategies to spur growth.

Furthermore, he stated that even though multinationals repatriate remittances, they are also bound to build local capacity by training locals who in turn will break away and set up indigenous business or companies to boost the industrialisation drive.

This, he reckons, remains on Ethiopia’s agenda as far as FDIs are concerned in his country.

“In the workforce, for instance, we have about 1,000 Ethiopian professionals working –there are university graduates serving as production managers. One of the ideas is we will encourage the ones that have been trained with experience for about two years; we invite them – the best-performing companies together with their managers – and encourage them to start their own companies.

“If from 1,000 you have 50 of the best, they will employ say 100. Gradually, it will expand and they will employ more locals – this is what we call spin-offs. The other concept is called Joint Venture is is based on trust; it takes time, it does not happen immediately,” Dr. Oqubay explained at a round-table discussion hosted by the African Centre for Economic Transformation (ACET) in Accra.

He presented lessons learnt from Ethiopia’s industrialisation policies which may be applicable to Ghana’s programme for ‘Accelerating Industrialisation for a Ghana Beyond Aid’.

The Ethiopian experience is centred on ‘Achieving Vision 2025’ – a plan to make Ethiopia the leading manufacturing hub in Africa.  Evidence also suggests that Ethiopia’s commitment to structural transformation in recent years is starting to bear fruit.

The Ethiopian government has streamlined its priorities. First, it has encouraged investment into new production capacity – especially in priority manufacturing activities.

Light manufacturing industries are acknowledged to be export-oriented/labour-intensive, linked to agriculture and involving tradable goods.

Second, it has deemed essential a new approach to hub development – agglomeration and clustering – with the focus on building sustainable, specialised parks that apply a plug-and-play model.

Dr. Oqubay, also encouraged government to be more pragmatic and dare to take risks.

According to him, African leaders should be bold enough to accommodate failure, maintaining that: “You need a national consensus on failed development issues; because of lack of national consensus on key development issues, when parties change they are not pursued – it is an African crisis”.

Another area he touched on has to do with decisions on policy, whereby he explained that policy has to be made based on research – stressing that data quality is weak in many African countries.

Dr. K. Y. Amoako, President of ACET, highlighted the discussion’s importance, which he said will enable Ghana to learn from Ethiopia’s rapid industrialisation agenda and equally help attain government’s vision of ‘Ghana Beyond Aid’.

Paul Boateng, a British Labour politician and board member of ACET, added that Ghana’s problems are not going to be solved by foreign aid, but rather “home grown solutions”; acknowledging that it is important to share good practices, knowledge.

Self-reliance, interdependence and action should guide the country, he noted.


This article was first published by The Business and Financial Times (B&FT). Read the original post here.

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