World Bank Supports Ethiopia’s Efforts to Increase the Competitiveness of the Country’s Manufacturing Industry

The World Bank’s Board of Executive Directors approved an International Development Association (IDA) credit of $50 million for the National Quality Infrastructure (NQI) Development Project aimed at improving the competitiveness of Ethiopian industries.

It will support the Government of Ethiopia’s (GoE) efforts to develop the country’s standardization practice, metrology, accreditation, and conformity assessment services—inspection, testing, and certification.

A well-functioning NQI will enhance firms’ competitiveness and opportunities for expansion into new export markets by offering them proof that products and services adhere to quality requirements. This will also encourage investors to upgrade their products and quality of services to meet market requirements imposed by trading partners, consumers, and regulatory authorities. This is particularly important for Ethiopian manufacturers who are currently facing a number of challenges in meeting quality requirements needed to access developed markets, such as the United States, European Union, and Asia, which require stricter quality checks and standards than the prevailing domestic ones.

Activities supporting the project will include expanding the capacity of the four existing NQI institutions under the Ministry of Science and Technology. It will also help promote more private sector engagement for the development of NQI in Ethiopia. This involves expanding the range of services provided by NQI institutions, offering technical skills and training to experts, modernizing select laboratories, and providing technical assistance to industries to meet quality requirements.

The project will focus on three value chains key to the government’s industrial policy to increase its export base, including: leather and leather products; textile and garments; and agro-processed products.

“This project is designed within the context of the World Bank Group’s support to the GoE’s industrialization agenda which is expected to be primarily led by export-led manufacturing sector. Lack of quality checks has been identified as a bottle-neck for the sector to grow to its full potential,” said Carolyn Turk, Country Director, Ethiopia.

The project will contribute to the World Bank’s strategic objectives of ending extreme poverty and promoting shared prosperity by supporting economic growth. It will enhance the global competitiveness of selected sectors, increasing the demand for Ethiopian products, increasing investments, and expanding production, resulting in job creation.

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