Made in Africa: Industrial Policy in Ethiopia by Arkebe Oqubay (review)

Arkebe Oqubay’s Made in Africa: Industrial Policy in Ethiopia is part critique and part manifesto. It is a critique of the liberalizing reforms championed by the International Monetary Fund (IMF) and the World Bank that have only exacerbated Africa’s uneven development. It is also a rebuke of Afro-pessimistic attitudes that blame Africans or African cultures for underdevelopment. It is a manifesto in that Oqubay offers an alternative route for economic growth for Africa by Africans drawing from his own experience as a prominent member of the ruling party (now special advisor to the prime minister) in Ethiopia—a country which has experienced rapid economic growth over the past decade.

The book makes a few arguments the most salient being the role of “state activism” in spearheading Ethiopia’s economic development. To the author, the state plays a central role in promoting industrialization through policy making. In particular, Oqubay defines industrial policy in Ethiopia as “a strategy that includes a range of implicit or explicit policy instruments selectively focused on specific industrial sectors for the purpose of shaping structural change in line with a broader national vision and strategy” (18). However, this is not policy making based on abstract economic models, but a flexible empirical process of trial and error or what he calls “learning-by-doing.” For Oqubay, widespread structural change or “catch-up” can only occur with practical policy prescriptions that prioritizes the development of sectors with strong “linkage effects,” spurring investments in related industries. He also advocates for protectionism in certain instances to shield infant domestic industries from the onslaught of foreign competition.

Central to the book are three case studies of the cement (Chapter 4), floriculture (Chapter 5), and leather (Chapter 6) industries. Oqubay examines the strengths and weakness of these sectors through a critical diagnostic approach. Of the case studies, Oqubay is most enthusiastic about the success of the floriculture industry—a success he attributes to sound industrial policies “critical to nurturing and expanding” the sector (151). Although Ethiopia’s climate and geographical location gives it a comparative advantage, Oqubay insists that such natural endowments could not be fully utilized without state intervention. The chapter goes on to describe how the state fostered a dynamic relationship with foreign and local companies through coordinated government support with (but not limited to) the National Export Coordination Committee (NECC), Development Bank of Ethiopia (DBE), Ethiopian Horticulture Producers and Exporters Association (EHPEA), and Ethiopian Horticulture Development Agency (EHDA). He also describes how the state generated linkages in other sectors such as airline cargo and packaging industries, which saw productivity gains from the floriculture boom. However, the author is more measured in his discussion of the cement and leather industries. For cement, Oqubay points out that the state was a key investor in the sector through financing, public enterprises, and infrastructure development, fostering major forward linkages in the construction sector. This would create thousands of jobs across the country even with periodic cement shortages causing construction halts. As for leather, Oqubay describes it as a persistent underperformer despite its supposed comparative advantage. Decentralized and rife with conflict, he names a laundry list of issues such as poor hide quality, erratic labor productivity, demand issues, lack of working capital, input delays, and livestock disease as problems afflicting the industry.

Although concise in its theoretical framing and detailed in its analysis of industrial policy, one major weakness of the book is Oqubay’s unwavering faith in the state and its policy-making process. To Oqubay’s credit, he makes several concessions regarding policy shortcomings across the cement, floriculture, and leather industries (e.g., pollution and environment compliance issues). However, in all these cases, the author’s solution to industry failures is just better policy. For example, Oqubay critiques the Ethiopian Leather Industries Association (ELIA), a government intermediary institution known as the “toothless lion.” He argues that the ELIA failed to organize the leather producers in the way that...