Working Paper

No. 1/2006

LINKAGES IN THE ETHIOPIAN MANUFACTURING INDUSTRY: A PRELIMINARY ASSESSMENT

Ethiopian Economic Association/

Ethiopian Economic Policy Research Institute

(EEA/EEPRI)

P. O. Box 34282

Tel: 251-11-4162121

Fax: 251-11-4160967

Addis Ababa, Ethiopia

E-mail:eea@ethionet.et

LINKAGES IN THE ETHIOPIAN MANUFACTURING INDUSTRY: A PRELIMINARY ASSESSMENT

Kibre Moges, Senior Researcher

Worku Gebeyehu, Researcher

Working Paper No. 1/2006

EEA/Ethiopian Economic Policy Research Institute (EEPRI)

March, 2006

Addis Ababa

No. Table of Contents Page

1. Introduction 1

2. Methodological Issues 2

3. Data Source and Aggregation Procedures 7

4. Empirical Results 8

4.1. General 8

4.2. Backward Linkage Effects 8

4.3. Forward Linkage Effects 9

5. Conclusion 17

References 18

Annex 19

Figures/Tables/ Title Page

Annexes

Figure:1 Schematic Representation of Output Transaction 2

Figure: 2 Direct Requirement Matrix 4

Figure:3 Total Requirement Matrix 5

Table 1 Share of GVP Used as Inputs in the Economy and

Exported 8

Table 2 Backward Linkage Multipliers 10

Figure: 4 Backward Linkage Effect Per Unit Output Change 12

Figure: 5 Backward Linkage Effects Weighted by GVP

(Excluding Agriculture and Mining) 13

Table 3 Forward Linkage Multipliers 15

Figure 6 Forward Linkage Multipliers Weighted by GDP 16

(Excluding Agriculture and Mining)

Annex 1 List of Industrial Groups 19

Annex 2 Input-Output Transaction Matrix 20

Annex 3 Total Requirement Matrix 26

Annex 4 Weighted Backward Linkage Coefficients 30

Annex 5 Total Requirement Matrix (Supply Side) 31