- The Enhanced Integrated Framework (EIF) helped develop institutional capacity-building in Ethiopia through the establishment of an EIF National Implementation Unit (NIU) capable of implementing and co-ordinating the delivery of trade-related technical assistance. This was supported by establishing a high-level steering committee that brought on board key line ministries, development partners and the private sector. The Government of Ethiopia saw the value of these EIF mechanisms, even when EIF project funding had ended. These mechanisms now oversee four trade-related government projects that are funded by other development partners.
- The EIF and the Government of Ethiopia collaborated on private sector engagement through a successful honey sector productivity and competitiveness project. The implementers, the International Centre of Insect Physiology and Ecology (ICIPE), later used this project as a blueprint for a follow-up silk and honey project, which garnered an additional USD 55.6 million from the Mastercard Foundation.
- Despite being affected by political instability in recent years, Ethiopia has witnessed a continuous economic growth trajectory, with an increase in its gross domestic product to USD 80 billion and poverty incidence declining from 39% in 2005 to 24% in 2015/2016. Ethiopia is undergoing the process of acceding to the World Trade Organization (WTO) as a way to become better integrated into global value chains. In this regard, the EIF has supported WTO accession negotiations for Ethiopia, and this process will continue in 2023 with a fifth round, again with EIF support.
Since the start of the partnership between the Government of Ethiopia and the EIF and the establishment of the NIU, the EIF has supported Ethiopia in strengthening its institutional and productive capacity within trade-related sectors. These initiatives were targeted at addressing issues highlighted in the 2016 UN Conference on Trade and Development-led Diagnostic Trade Integration Study (DTIS) Update. In 2017, the EIF also supported the recruitment of staff – an NIU Coordinator, a Monitoring and Evaluation Officer and Project Officers – to manage the NIU within the Ministry of Trade and Regional Integration. Ethiopia has also established an Export Trade Facilitation Committee, chaired by the Prime Minister.
The first DTIS (2004) facilitated the inclusion of trade in the country’s first Growth and Transformation Plan (GTP I). Subsequently, the DTIS Update analysis, which began in early 2015, helped re-examine the priority sectors needed to achieve the objectives of the second Growth and Transformation Plan (GTP II), which aimed at "poverty reduction, sustainable development and integration of Ethiopia into the global trading systems". The export of manufactured goods is also considered a fundamental driver of economic growth in Ethiopia’s GTP II, as well as for the transformation of the rural-based economy into a manufacturing-based one. A major recommendation of the DTIS Update was the need to develop a national trade strategy and related trade policies to remove stumbling blocks that were hindering trade growth in Ethiopia, and to envisage the agro-processing industries to link agriculture with secondary value-added products.
Preparing for WTO accession and AfCFTA implementation
For a long time, Ethiopia chose to remain on the fringe of both regional and international trade systems. This meant that the Government lacked the technical expertise to drive an international trade agenda. As a way to address this, between 2019 and 2021, the Government of Ethiopia, with support from the EIF, undertook an extensive training exercise that reached a total of 979 trainees, notably 342 women and 333 youth, to drive the domestic reform necessary for the country’s WTO accession and to effectively implement the African Continental Free Trade Area (AfCFTA). This training exercise was crucial in ironing out some of the challenges faced by Ethiopia to productively engage in such regional and global trade systems.
The Government worked through national structures such as the Trade and Industry Standing Committee, federal and regional government officials, the private sector, international organizations and academia. Furthermore, the media were also targeted to raise awareness and deepen understanding among stakeholders of the pertinent negotiation processes required to achieve WTO accession and AfCFTA implementation and, importantly, for the different stakeholders to understand their role in these domestic reform processes. By targeting the media, the country’s coverage of trade and investment issues increased.
All these processes culminated in the signing and ratification of the consolidated AfCFTA Agreement. Separately, Ethiopia has conducted four rounds of WTO working party meetings, and the EIF continues to play a role in supporting Ethiopia in the negotiations towards WTO accession.
Homegrown trade and policy reforms
The country’s trade policies and trade policy formulation processes were reformed to embed trade in the national development plans and to foster trade growth and sustainable development. According to Nuredin Mohammed, EIF Coordinator at the Ministry of Trade and Regional Integration, the EIF supported evidence-based studies and discussions that catalyzed the formulation and updating of three key trade and investment policies: firstly, the National Fuel Price Setting and Fuel Subsidy Directives, which objective is to maintain the world market fuel status and make sure that the vulnerable sector gains the appropriate support, and which were ratified by the Council of Ministers.
Secondly, the Council of Ministers also endorsed the national Ten-Year Perspective Development Plan 2020-2030, which was informed by the Trade and Industry Sectoral Ten-Year Perspective Plan.
The third key policy was a national export strategy, which clearly articulates opportunities for export growth in agriculture, extractive industries, manufacturing and service sectors. The strategy also highlights the constraints in the different sectors and outlines several key activities to achieve the desired export and economic development.
Nuredin Mohammed says that EIF support was also instrumental in the ratification of the Ethiopian Commercial Code, which was reviewed and amended for the first time in 60 years, as well as in providing technical support for the Capital Market Establishment Proclamation. The EIF project team participated in the preparation of these documents and the validation workshops.
The two Growth and Transformation Plans, covering 2010 to 2014 and 2015 to 2019, respectively, paved the way for the first Homegrown Economic Reform covering 2021-2023 and the Ten-Year Perspective Development Plan 2020-2030, considered to be key in the country’s trajectory towards economic growth. This reform agenda and development plan are set to achieve an array of goals that include improving productivity and competitiveness, undertaking institutional transformation, ensuring private sector's leadership in the economy, building climate resilience and a green economy, and ensuring the equitable participation of women and youth.
By improving Ethiopia's policy environment, the country's ease of doing business has increased, as erstwhile complicated regimes, procedures and regulations have either been removed or simplified.
Promoting Ethiopian business through trade fairs
Over the years, the EIF has also supported several projects to address the productivity challenges faced by producers and exporters in Ethiopia. Efforts to increase trade have focused on simplifying trade regimes and diversifying products, services and markets. To this end, the EIF has provided consistent support for Ethiopia's participation in the Dubai Gulfood Expo since 2015. "The Gulfood Expo is a very important event for us to get new markets and strengthen existing markets" says Assefa Mulugeta, then Director-General of Export Promotions at the Ministry of Trade and Industry. He believes that the Gulfood Expo is different from other trade exhibits because of its focus on networking. The number of Ethiopian companies exhibiting has risen from between 5 and 10 to approximately 70 companies now making the journey each year. As the Ministry cannot accommodate this demand, participation now takes place on a rotational basis. In total, Ethiopian companies earn around USD 80 million each year as a direct result of contracts signed at this trade fair.
Birukawit Begashaw, owner of Addis Ababa-based export company Qine Trading, testifies to the benefits of exporting for businesses in Ethiopia. She started her own company in August 2015, but struggled to get orders. "Then I got two containers of seeds to New Jersey, in December 2015" she says. This first break was followed by a second, when she was invited by the Ministry of Trade and Industry to participate in the Gulfood Expo.
Scaling up the honey sector
To strengthen the growing honey sector, the EIF has also supported the scaling up of organic honey and honey products via a project implemented by ICIPE. Through initiatives focused on addressing the production challenges faced by beekeepers, almost 20,000 beekeepers were trained (well over 6,000 women and nearly 18,000 youth) in honey harvesting, grading, packaging, storage and marketing, and were provided with modern equipment. Armed with better skills, a total of 153 tonnes of honey and 17 tonnes of beeswax were produced during the project period (2019-2021). Standardization of honey production and better packaging have increased earnings to a total of USD 1.3 million, while complementary honey products such as beeswax and royal jelly, pollen and propolis generated an additional USD 400,000+ during the same period.
To improve the quality and quantity of honey, 440,000 bee forage seedlings were planted around apiaries by 58 beekeepers’ enterprises, with almost USD 80,000 generated from the sale of seedlings. ICIPE, supported by the NIU, managed to leverage the support of the Mastercard Foundation, which injected more than USD 55.6 million to expand honey producing activities to other regions in Ethiopia, thereby creating more job opportunities for young people through the More Young Entrepreneurs in Silk and Honey project.
Closing the gender gap in technology and sustainable agribusiness
Despite the opportunities offered by technology, particularly in business and especially in Africa, women and girls in the region have not been able to take full advantage of these opportunities. Yet, e-commerce comes with fewer trading barriers, offers women bigger and more diverse markets, and provides them with the flexibility to operate from convenient business spaces and with more flexible working hours. In Ethiopia, the situation is rapidly changing for women in sectors such as apparel and textiles. Through a partnership between the EIF and the International Telecommunication Union, women in the sector are gaining economic empowerment skills through more innovative ways of identifying markets, engaging with their customers and managing their businesses. The project has connected women with important actors in the digital ecosystem as well as in the textile and apparel sector by expanding their knowledge of technology use and their digital skills to build online marketplaces and to participate in the digital economy.
Another partnership between the EIF and Fairtrade Australia and New Zealand is strengthening the farming skills of women in Ethiopia to ensure that their farming and harvesting techniques are environmentally friendly, and that the quality of their produce meets international market requirements. Women have been trained on pest and disease control threshold and farm protocols. As a result of this training, they have also earned export certifications to facilitate exports of their agricultural products. Ultimately, the goal is to increase the profitability of the women farmers’ businesses by ensuring that exports earn higher prices on international markets and that producers’ rights are protected.
Ethiopia’s future in trade looks bright
EIF support to Ethiopia has strengthened institutional and productive capacity in several areas and sectors. The partnerships and support towards diversification of products and markets, simplified trade regimes, and registration and licencing services have all contributed to boosting Ethiopia's trade and the recognition on international markets.
Ethiopia’s ratification of the AfCFTA and commitment to the WTO accession process is nurturing an environment conducive to increased trade, more export revenues and deepened economic linkages with other countries, both regionally and globally. In this regard, the EIF is a committed and trusted partner of Ethiopia on this journey.
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As the second phase of the Enhanced Integrated Framework (EIF) comes to an end in 2024, the objective is to produce a catalogue of impact stories showcasing the efforts of the EIF partnership in the least developed countries (LDCs) and recently graduated LDCs where it has been actively engaged. This impact story makes up one of the stories in the catalogue. Essential input and reviews were received from the country‑based EIF National Implementation Units (NIUs) and the wider EIF team.
The primary objective of each impact story, as well as the entire catalogue, is to adopt a journalistic approach in recounting the EIF's engagement in the LDCs during both Phase One and Two. The aim is to offer valuable insights and to document outcomes and impacts, as well as some lessons learned from the work of the EIF partnership in the LDCs. These stories do not provide a comprehensive overview of every aspect of EIF partnership engagement such as precise timelines or the exact extent of involvement (i.e., financial contributions). Instead, they serve as one of several means of information about the work of the EIF partnership. Interested readers are encouraged to supplement these impact stories by consulting other sources, including EIF Annual Reports, Trade for Development News articles, EIF social media channels, and, where applicable, the NIUs in the LDCs as well as the EIF Executive Secretariat.
It is essential to acknowledge that the information provided is neither exhaustive (e.g., it is based on the latest available data at the time of writing in 2023) nor evaluative in nature.
Lastly, while each impact story adheres to a similar structure, the diverse range of countries, contexts, and EIF engagements means that each story is unique.
If you would like to reuse any material published here, please let us know by sending an email to EIF Communications: firstname.lastname@example.org.