Transcript One Stop Support Practice with Reference to Textile and

One Stop Support Practice
with Reference to Textile
and Leather Sectors
Presentation to GTZ Seminar
Mount Grace Country House Hotel
May 24, 2006
Contents
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Background
Business & Investment Climate
Civil Service Reform Programme
Industrial Development Strategy
Institutional Arrangement
Textile and Leather Industry
The Way Forward
Background
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A country of 77 million Population
1.14 million sq.km
After 17 years of Socialist system, 1992 the current Gov‘t
- Launched Economic Reform Prog.
- Moving towards market economy
- Encourage private sector
Structure of the Economy:
- 45% of GDP originate from Agriculture
- 43% Service
- 12% Industry
It is an agrarian Economy
Adopted an Economic Development Strategy, ADLI
- 85% of the population base their lively hood on it
- 80% as raw material source for major industrial activities
- 70% of the export earninig is generated from it
- 45% contribution to GDP
Business & Investment Climate
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The Gov‘t has succeded in mentaininig a stable and preidictable macroeconomic environment
- the economy grows at an average rate of 6% per annum for the
last 13 years,
- inflation has declined from around 20% in 1992 to an annual
average rate below 5 % since then,
- In order to integrate the Ethiopian economy to the Global
economy, it has been implemented a customs tariff reform
- It reduced from 230% to the current 30%
- the weighted average custom tariff has been reduced from
40 % to the current 17.5%
- Interest rate and foreign exchange have been relatively stable
The Investment code and Regulation has been revised 4 times to widen
the scope and areas of investment and also
- to reflect the demand of the private sector
- to be compatable with the global environment
Various incentives schemes, both fiscal and financial, have been put in
place to attract and encourage more investment
Licensing & business registration have been rationalized as well as access
to land and finance has been eased There are numbers of market access
privileges provided by bilateral countries and multi-lateral organizations.
Civil Service Reform Programme
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There are certain services that private investors need from any gov’t,
whether that government favors or opposes government interventions.
The main thing expected from any gov’t, whatsoever the services it
renders, is to provide them transparently, accountably, efficiently and
effectively.
In the Ethiopian case, it has been well acknowledged by the Gov’t that the
civil service has a series deficiency in discharging its responsibility
efficiently and effectively.
-with time consuming procedures that focused on inputs rather than
outputs.
In a major paradigm shift, the Gov’t introduced the civil service
program up on which public service delivery improvement policy is
one of the major focuses.
BPR (Business Process Reengineering)
- Are we doing the right thing?
- Are we doing the right things in the right way?
Service Delivery Improvement for the Three
Institutions
Descriptions
Work Steps
Time (Days) to get Service
Before
BPR
After
BPR
Before BPR
Now
Inv. Licence
18-39
4
25-108
4 hours
Reg. certificate
18-39
4
28-96
4 hours
Job licence
13
4
58
1 hour
Bus. registration
26
4
225
4 hours
Inv. Licence renewal
11
4
13
1 hour
EIA
Service Delivery Improvement for the Three
Institutions
Descriptions
Work Steps
Time (Days) to get Service
Before
BPR
After BPR
Before BPR
Now
Trade Licence
14-26
6
2-35
34 minutes
Business Registration
23
12
21
76 minutes
New trade licence
14
6
8
39 minutes
Trade licence renewal
10
4
17
36 minutes
Ministry of Trade & Industry
Service Delivery Improvement for the Three
Institutions
Descriptions
Work Steps
Time (Days) to get Service
Before
BPR
After BPR
Before BPR
Now
Transit Import process
43
6
2-4
15-45 minutes
Transit Export process
8
3
2
20-40 minutes
Clearance Import
29
6
43
6 h 15 minutes
Clearance export
8
3
2-15
26 minutes
Ethiopian Customs Authority
Industrial Development Strategy
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In line with the over all economic development strategy,
apart from maintaining stable and predictable macroeconomic environment, the Government has put in place
various sectoral policies and strategies to create more
favorable situations for the private sector.
In view of the industrial development of the country,
recognizing the paramount significance of the
manufacturing sector in particular, the Government of
Ethiopia has adopted and put in place the Industrial
Development Strategy in 2002.
Industrial Development Strategy
The basic objectives and principles, which the strategy has
taken into considerations are:
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It first and foremost recognizes the private sector as an
engine of growth of the economy,
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It takes into consideration the country’s all over all
development strategy, i.e. ADLI,
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It emphasis the export activities as the main target and
hence known as Export-Led-Industrialization,
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It is based on the principle of labor intensive technology
and greater use of local resources,
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It acknowledges the developmental role of the Government,
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It emphasis the active role of FDI and the importance of
creating alliance and collaborations between foreign and
domestic investors,
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It recognizes the active participation of the public, private,
civic societies and employee - employer relation.
Industrial Development Strategy
The strategy has also emphasis that a better and conducive environment has
to be created for the industrial development by way of:
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creating and deepening macro-economic stability,
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modernizing the financial system,
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creating dependable physical infrastructure services,
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developing the human resource asset,
creating efficient, effective and accountable and dependable civil servant,
creating efficient judiciary system.
Industrial Development Strategy
On the basis of the above mentioned principles, and also on the basis of
the comparative and competitive advantage of the country, the strategy
has already identified priority areas that deserve special and unique
attention and support by the Government. In this respect, the sectoral
focus of the strategy in agro-based industries and the interrelationship
between agriculture and industry. The priority sector, hence, are
identified:
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Textile and Garment Industries,
Meat, Leather and Leather Product Industries,
Agro-processing Industries,
Construction Industries,
Micro and Small Scale Enterprises,
Tourism and IT.
Institutional Arrangeemnt
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Ministry of Trade Industry
Private sector operators
Sectoral Associations
Other Gov‘t Organization
Non-Government organization
Ministry of Trade and Industry
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Vision: Secure globally competitive trade and
industrial sector that would be well
founded on the basis of consistent
development and growth.
Mission: promote, and expand the development
of trade, industry and investment in the
country by creating conducive enabling
environment to the developmental
forces and render transparent and
efficient services and supports.
Investment Growth
Year
Number of projects obtaining Capital
Investment license
In bill.
Total
Growth
% FDI
US $
%
Employment
2003
1,455
59
12
1.60
74,085
2004
2,774
91
17
3.56
149,349
2005
3,705
34
18
10.00
147,185
Textile and Leather Industry Sector
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The sector is completely in line with the industrial developemnt strategy of
the country
- save capital
- employ large labour force
- resource base
- in terms of livestock population- 1st in Africa 10th in the world
- cattle-41million
- sheep- 25 million
- goat- 23 million
- in terms of cotton 70-80 thousands ha., 32-35 thousands tons lint
cotton, only 50% consumed
- demand of the product
Top-Down (Pull) Approach
Value Chain
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“Value chain”:
the sequence of the productive process (functions) from the
provision of specific inputs to raw material production,
transformation, and marketing and up to final consumption of a
particular product. It is also an institutional arrangement linking
and coordinating the producers, processors, traders and
distributors of that product.”
By Andreas Springer – Heinze
Textile and Leather Industry Development
One stop shop support Center
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“One-stop shop service” means
rendering of supports and services
directly to users or causing to be
rendered by strengthening and
enhancing the integration of supply
(value) chain activities in order to
enable the textile and leather
industry to be competitive and
successful.
One stop shop support
Direct support
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- Information and advice,
- Strengthening PPD , - Technical
consultancy including firm reengineering, - Marketing,
- Planning and
coordination
- Follow-up
- Policy issues & Research works
- Investment promotion
- Undertake those relevant activities that may be delegated to it from other
Government and Non-Government organizations to speed-up the sector’s
development.
Indirect support
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Human resource
Finance
Working premises
Quality and Standardization
The PPD
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National Export Coordination Committee
-Chaired by PM
- Regularized every month
- Only those relevant government
organs who directly and indirectly
concerened in export activities are memebrs
- It is based on Action Plans prepared by each respective organns
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National PPD
- Chaired by the Minister of MIT and Cochaired
by the president of Chamber of commerce
- Regularized every 3 months
The PPD
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Textile and Leather PPD (sectoral)
- At the begining of every fiscal year a
jont action plan against production,
marketing (sell), investment and
intervention (support) areas ccordingly
is designed firm by firm level.
- Regularized every 2 months
- Sectoral associations are actively
envolved
- M&E will be done in the presence of all
- Issues identified
- Subsequent action plan prepared
AGOA
Description
2003
2004
2005
TOTAL
Total number
of garment
enterprises
3
7
10
10
Export Value
(in mill. US$)
0.504
1.674
(240%)
1.710
(6%)
4.922
(123%)
5+2 Selected Sister Shoe Companies
Factories/
Projects
Installed
Attained
Capacity/day Capacity
Plan
Mechanisms
1. Peacock
Shoe factory
2500
1000
5000
Double
Shift
2. Kangaroo
Shoe factory
1000
800
2000
Double
Shift
3. Wallia Shoe
factory
800
200
800
4. Ras Dashen
Shoe factory
800
150
800
5. Ramsea
Shoe factory
750
750
1500
Total
5850
2800
10100
Double
Shift
5+2 Selected Sister Shoe Companies
Factories/
Projects
Installed
Capacity/da
y
Attained
Capacity
Plan
Mechanisms
6.
Ethio-leather
Industry/cluster
12000
1000 MSEs
& 7000 jobs
inder invest.
7.
Anbessa Shoe
Factory
1000
Under
construction
8.
Ras Dashen
shoe factory
700
Planned
expansion
9.
Walia Shoe
Factory
700
Planned
expansion
3000
Planned
expansion
10 Ramsea
.
Shoe factory
5+2 Selected Sister Shoe Companies
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Support areas has already identified
and action plan has designed
- Marketing
- Trained manpower
- Logistics
- Fianancial requirements
- Quality finished leather
- Environment issue
Supporting Upgradation of
Selected Tanneries
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21 tanneries
80% of their production activity is in the form of semi-processed products
- 45% in pickled
- 25% in wet-blue
- 10 % in crust
- 20 % in finished leatrher
In order to produce sufficent finished leather to the shoe and garment
factories there need to upgrade or encourage to upgrade their production
level.
11 factories have been identified as a first batch- on the basis of
committment, experience, potentail, facility and readiness
Action Plan has been identified together with the operators-investment,
marketing, human resource,policy issues etc.
5 Strategic Textile Projects (All
private)
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It is found that there is insufficent availability of
fabrics both in terms of quality and quantity
Quite large number of garment factories import
fabrics
We have succeded to recruit investors who were
in other business to engage in the upstream
activities of producing yarn and fabrics
We have commenlf identified action plan
One of them will commence productio after one
month (1.7 million liner meter fabrics)
The rest they are under diffrent investment stage
The way foreward
Export Plan (in million US$)
2006
2007 2008 2009 20010
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Textile and garment
100
200
270
400
500
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Leather and leather products
105
180
250
350
500
Major constarints of the sector:
-Low productivity
- under capacity utilization
- skills and qualificatins of workers
- marketing problem
- quality of product
- difficulty to access finance
- information and consultancy advice
Recommended Action
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Make the PPD very active
Strengthen sectoral associations
Strengthening existing capacities
Expand capacities
Investment promotion
Provission of information and consultancy advice
Quality and standardization
Human resource development
Finance
Coordinating the value chain
Policy issues
Strengthen the Textile and Leather Industry Development
center to provide one stop support and service
Mobilization of External Support-GTZ, UNIDO, World Bank
Thank You Very Much!!