Professional Documents
Culture Documents
Section: N7
Prepared By:
Date: 20/06/2022
Table of Content
1. Introduction to secondary and tertiary economic activities in Ethiopia......................................4
1.1 Manufacturing Industry in Ethiopia.......................................................................................5
1.1.1 Introduction.........................................................................................................................5
1.1.2 Important characteristics of industrialization:.....................................................................5
1.1.3 The role of the industrial sector in the Ethiopian economy................................................6
1.1.4 Types and characteristics of manufacturing........................................................................6
1.1.4.1 Introduction......................................................................................................................6
1.1.5 The Spatial Distribution of Manufacturing Industries in Ethiopia.....................................7
1.1.6 Contributions of Industrial Parks in Ethiopia.....................................................................9
1.1.7 Opportunities for the Manufacturing Sector in Ethiopia....................................................9
1.1.8 Challenges of the Manufacturing Sector in Ethiopia........................................................10
1.2 The Service Sector in Ethiopia................................................................................................10
1.2.1 Introduction.......................................................................................................................10
1.2.2. The Role of the Service Sector in the Ethiopian Economy..............................................11
1.2.3 Education as component of service sector........................................................................11
1.2.4 Health Sector.....................................................................................................................11
1.2.4.1 The Health Sector Policies and Strategies.....................................................................12
1.2.4.2. Problems of and Possible Remedies for the Health Sector Problems...........................12
1.3 The Transport Sector...............................................................................................................13
1.3.1 The Contribution of Transportation to Socio- Economic Development...........................14
1.5 The Tourism Sector in Ethiopia...............................................................................................16
1.5.1. Types of Tourism.............................................................................................................16
1.5.2. Major Tourist attraction sites of Ethiopia........................................................................16
1.5.3 Tourism in Ethiopia contributes to the national economy in:...........................................17
Summary........................................................................................................................................18
List of tables
According to the International Standards for Industrial Classification (ISIC), the Ethiopian
industrial sector is composed of mining and quarrying, manufacturing, electricity, water supply,
and construction. Since the manufacturing sub-sector is the most dominant and dynamic
component of the industrial sector, and also due to availability of time series data, we will
concentrate on this sub-sector as we analyze the contribution of the industrial sector to the
national economy.
Employment Contribution: the manufacturing sub-sector, in particular, serves as important
sources of employment, especially for the rapidly growing urban population in Ethiopia.
Foreign Exchange Contribution: The poorly developed industrial sector of Ethiopia
contributes very little to the foreign currency earnings of the nation.
Output Contribution: The manufacturing sector is characterized by the physical or chemical
transformation of materials or components into new products, whether the work is performed by
power-driven machines or by hand, and whether it is done in a factory or in the worker’s
home[3].
1.1.4.1 Introduction
Manufacturing is defined as physical or chemical transformation of material components into
new products. The definition also includes the assembly of component parts of manufactured
products as a manufacturing activity whether the production is done at factory or home, sold at
retail or wholesale, and whether power driven machine is used or not[4].
Manufacturing is a value-adding procedure that converts raw materials, components, or parts into
pre-designed goods, products, or merchandise that satisfies a customer’s expectations or
specifications. In earlier times, the word “manufacturing” connoted that these procedures were
predominately carried out by human power, thus the word contains two parts “manu” and
“facturing.” Today, much of manufacturing is being completed with the use of tools and
machines on much larger scales and to much higher precision. Manufactured goods or products
can be sold to other manufacturers for further processing or they can be sold to customers in
market places,
including wholesalers or retailers, then eventually to end users. To this end, manufacturing
efforts have the important objective of adding value. In view of its value-adding nature, the
processes and end results of manufacturing have to be competitive, as their values are often
judged and validated on open markets. The factors that determine the competitiveness, and thus
value, of manufacturing are the product quality, production cost, delivery time, safety, and
service and making profits, in that the prices of the products have to be higher than those of the
raw materials. This objective is an intrinsic attribute of manufacturing that sets it apart from
prototyping, research, or development
activities[5].
According to the Central Statistical Authority (CSA), the Ethiopian manufacturing sector is
classified into three, namely large- and medium-scale, small-scale and cottage/handcraft
manufacturing. This categorization is mainly based on the number of people employed and use
or non-use of power-driven machinery:
1. Large- and medium-scale manufacturing establishments use power-driven machinery
and employ 10 persons and above.
2. Small-scale industries are those establishments that employ less than 10 persons and use
power-driven machinery.
3. Cottage/handcrafts units are those establishments that produce goods and services
primarily for sale but do not use power-driven machinery in performing their main
activities, regardless of the number of persons employed[3].
1. Physical activities: involve working with objects; examples include repairing cars,
hairdressing, and cooking.
2. Intellectual activities: involve providing education or training at such levels as university and
vocational school.
3. The aesthetic activities: entail providing consumers with artistic experiences such as offered
by museums, theater performances, art shows, and musical performances
3. Foreign exchange contribution: Foreign exchange income earned from service providers
such as Ethiopian Airlines and Ethiopian Shipping Lines, as well as from various service sub-
sectors such as tourism, communication, insurance and financial services.
1.2.4.2. Problems of and Possible Remedies for the Health Sector Problems
Limited physical access to health facilities, the absence of health care facilities.
The available health care facilities are unevenly distributed across regions.
Inadequate budgetary allocation and low levels of management.
Low quality of the facilities.
Maternal, infant, and child mortality rates are still high.
Inadequate and poorly maintained infrastructure and equipment, shortage of trained
health personnel, and the unavailability of drugs and pharmaceutical supplies.
A. Telecommunication
In today’s world, the telecommunication infrastructure of a country is one of the most important
factors affecting development. It is therefore important to evaluate a country’s national
telecommunication infrastructure prior to embarking on a major national development program.
Telecommunication plays a major role in the exchange of views and in information
dissemination among various socio-cultural and economic groups. The Ethiopia
Telecommunication Corporation (ETC) has been expanding its network within the country and
to the rest of the world. A modern communication system, especially telecommunication, is one
of the conditions for attracting foreign capital and encouraging competition in the world market.
The Ethiopia telecommunication (ETC) is making continuous efforts to extend its services
throughout the country.
A. Postal Service
Postal services are important for expanding communication infrastructures. The Ethiopian Postal
Service was introduced in 1886 E.C. Even though the service has been in place for a long time,
its services are limited to only parts of in the country. Postal service has been expanding since
1991/92, with increasing volumes of both domestic and international postal traffic.
Challenges to tourism sectors are; shortage of tourist facilities, limited promotion, and lack of
professional and skilled personnel.
Remedies: Improving transportation facilities, allocating an adequate government budget,
Improving management to enhance the quality of the sector, providing manpower training and
promoting the country’s tourism resources[3].
Summary
The structure of the economy, in general, is decomposed into the three main sectors: the
primary-agricultural sector, the secondary-industrial (manufacturing) sector and the tertiary-
service sector.
The level of development of the manufacturing sector is at its infancy and the country’s
industrial base is at its lowest level. The manufacturing sector plays the most important and
dynamic role in the industrialization process. There are different types of manufacturing like:
Large- and medium-scale manufacturing, Small-scale industries and Cottage/handcrafts. Some of
the current regional capitals such as Hawassa in the south, Dire Dawa in the east, Mekelle in the
north, and Bahr Dar in the northwest are also among the top ten towns hosting a substantial
number of industrial establishments.
The service sub-sector includes such activities as tourism, health, education, transport and
communication.
Reference
[1] S. Banerjee, “Primary, Secondary and Tertiary Sector Linkages and Environmental
Management,” 2002, [Online]. Available: https://www.caluniv.ac.in/dj/BS-Journal/2002-
2004/primary_secondary.pdf.
[3] “The Agricultural Sector in the Ethiopian Economy,” pp. 1–54, 2000.
[4] M. K. Mishra, “Determinants of manufacturing sector growth in ethiopia,” vol. VI, no. 2,
2018.
[7] UNDP, “Understanding African experiences in formulating and implementing plans for
emergence Growing Manufacturing Industry in Ethiopia,” p. 68, 2017, [Online].
Available: http://www.et.undp.org/content/dam/ethiopia/docs/Understanding African
experiences in formulating and implementing plans for emergence Growing
Manufacturing Industry.pdf.
[8] E. Focus, “The Role of the Transport Sector in Ethiopia ’ s Economic Development E T H
I O P I A ’ S E C O N O M I C D E V E L O P M E N T *,” vol. 9, no. 4, 2020.