Special Initiative Jobs Programme
Project description
Title: Special Initiative Jobs
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Ethiopia
Lead executing agency: Ethiopian Investment Commission (EIC), Ministry of Trade and Industry (MoTI); Industrial Park Development Cooperation (IPDC)
Overall term: 2018 to 2021
Context
Ethiopia is often cited as the ‘next economic corridor’ due to its comparative advantages. With a population of 104 million, the mere size of its domestic market, the competitive labour costs, as well as the richness of natural resources, Ethiopia benefits from being an attractive investment destination. Moreover, goods that are produced in Ethiopia benefit from customs free market access to the United States of America and the European Union under the ‘African Growth and Opportunity Act’, the ‘Everything but Arms Initiative’. The recently signed Africa Free Trade Agreement will also inevitably increase trade among the African countries.
Ethiopia has shown positive socio-economic development during the last decades; however, it continues to face many challenges. Approximately one quarter of its total population live on less than one dollar per day. Also, half of its population is younger than 15 and are anticipated to enter a volatile job market in the next couple of years. To date, the labor market is characterised by a high share of vulnerable employment accounting for 88 per cent of the working population. From which, 68 per cent works in agriculture, 22 per cent in service, and 9 per cent in the industrial sector. The socio-economic development of Ethiopia is further challenged by difficult framework conditions for businesses, which is also reflected in the Ease of Doing Business Index by the World Bank: Ethiopia is ranked relatively low at 159 out of 190 worldwide countries.
Taking these framework conditions into account, economic growth through job creation of the manufacturing companies in Ethiopia remains below its potential. On the one hand, SI Jobs is supporting the private sector by providing advisory services, supporting technical innovations, and developing human capacities.
Objective
The programme targets private sector development for selected geographical areas and economic clusters and promotes sustainable investments that lead to more employment. It is also collaborating with the public sector to create a solid institutional framework, improve the business environment, and promote Ethiopia’s image abroad.
Approach
On behalf of Germany’s Federal Ministry for Economic Cooperation and Development (BMZ), the Gesellschaft für Internationale Zusammenarbeit GmbH (GIZ) is implementing the Special Initiative Jobs (SI Jobs) Programme. The three-year programme aims to promote economic growth through job creation in selected clusters in Ethiopia.
The project is broken down into three fields of activities:
Firstly, the project is collaborating with Ethiopian small and medium enterprises to expand their capacities;
Secondly, the project is collaborating with the private sector and the Industrial Park Development Corporation (IPDC) to improve conditions for sustainable job-creating production in the industrial parks;
Thirdly, the project is collaborating with the private sector and the Ethiopian Investment Commission (EIC) to promote the cooperation between Ethiopian and international companies. Derived from the objective of the project, the target group encompasses local and international small and medium sized businesses and investors, as well as the job-seeking population and employees in industrial parks.
Working through the three pillars, the SI Jobs programme in Ethiopia aims to improve productivity and competitiveness of local SMEs to enable them for export or as suppliers to industrial parks (IPs); improve business environment for investors in IPs and improve quality of employment, improved management capacities; and assist the Ethiopian government in the development of business relationships between Ethiopian and international companies. In doing so, the programme aims to create 35000 jobs by 2021 from which 17500 will be women and 1000 will be youth.