Regional Linkages and Competitiveness of Manufacturing Sector in Tigrai: Challenges and Opportunities

The manufacturing sector is critical for sustained growth, poverty reduction, employment creation, and technology diffusion in Ethiopia. Nevertheless, the performance and contribution of the sector has been unsatisfactory and declining. While there are abundant raw materials the sector is with low production base, low competitiveness, and uses imported inputs. Hence, this study is conducted to analyze the supply chain linkages, raw material, and challenges affecting the competitiveness of the sector in Tigrai. Data collected through a survey questionnaire from 620 enterprises, focus group discussions, and key informant interviews were analyzed using SPSS. The result showed that shortage, inferior quality, and high cost of raw materials, Poor upgrading strategy, and ineffective upstream linkages are the main challenges for the manufacturing sector’s competitiveness. Hence, proper development of the industrial inputs and use of the supply chain linkage in the domestic and export markets should be strategically solved to improve the sector’s competitiveness and growth.