In Ethiopia, the government is focusing on strengthening local production through an import substitution policy. The first months of implementing this strategy have proven particularly beneficial, as the country has managed to save nearly one billion dollars by promoting domestic production. Ethiopian authorities state that this policy will continue to serve as a key pillar of the nation’s economic development in the years to come.
As the Ethiopian government implements an import substitution policy to promote local production, the country has saved over USD 1.08 billion in foreign currency during the first quarter of the 2025/2026 fiscal year, thanks to the growing strength of domestic manufacturing. According to the government, 37 industries have resumed operations and 10 new factories have been commissioned in industrial parks, particularly in the agro-processing sector. In addition, 31 other factories are currently being prepared for launch.
The increase in sector productivity, as well as the strengthening of their competitiveness, is not only about improving productivity but also about making them more competitive in the market. This will generate more wealth and enhance our capacity to act, both as a government and as a people.
Abiy Ahmed, Prime Minister
Moreover, on October 25, 2025, Prime Minister Abiy Ahmed praised these achievements, stating that the economic reforms undertaken in recent years are bearing fruit. According to him, these efforts have helped initiate lasting structural transformations, particularly in the agricultural sector, which recorded a growth rate of 7.3% over the period.
Two years before the reforms, in 2016, the cost of exports for an entire year was equivalent to the exports made only in the first half of this year. This clearly shows that the reforms implemented have borne fruit.
Abiy Ahmed, Prime Minister
According to Ethiopia’s Ministry of Industry, 96 key products have been identified to be replaced by local production. These include goods from the textile, agro-processing, and pharmaceutical industries. This reform is being implemented as Ethiopia’s export rate for 2024 is estimated at 17.31% of GDP. The authorities state that the import substitution strategy will remain a major pillar of the country’s economic development in the coming years.
