Local manufacturer Tihtina Legesse wrestles against a panoply of structural challenges to keep her company afloat.

She is the general manager of the furniture powerhouse Waryt. For the past few years, meeting the company's foreign currency needs has become an uphill battle. Established with 200,000 Br capital, the company now needs close to half a million dollars each year to import sponges, chemicals and a host of other inputs that uphold the standards. Apart from scarce quality materials, Waryt has also been challenged by declining sales and a skilled labour force.

"We operate at 20pc of capacity," Tihtina bemoaned.

Apart from the responsibility of keeping the company operational, Tihtina is tasked with upholding a three-decade-old brand that has become a household name for high-quality products. She believes that quality standards should be set to keep the local industry in line and foster the growth of the manufacturing sector.

"We also compete with lower quality products at price points," she said.

An ambitious initiative towards import substitution kicked off under the banner Let Ethiopia Produce about a year ago, with an exhibition aimed at inspiring local manufacturers unfolding last week at SkyLight Hotel. The gathering saw the attendance of high-echelon government figures such as House Speaker Tagese Chaffo, Minister of Industry Melaku Alebel and State Minister Hassen Mohammed.

Underneath the spirited campaign towards import substitution lurk structural challenges waiting to be addressed.

The shortage of foreign currency remains an issue extending its roots towards several sectors. Heavy reliance on imports for inputs that are necessary to uphold local manufacturing is one element squeezing the financial capabilities of producers. Those eyeing the local suppliers are frustrated with substandard quality while meagre awareness and nonconformity to environmental standards push them to the sidelines.

Poor policy frameworks compounded by shaky grounds of macroeconomy and a dearth of skilled labour plague the manufacturing sector. Latest report by the United Nations Development Programme (UNDP) reveals that a staggering 450 factories have closed down operations as the share of the manufacturing sector in GDP saw a 1.5pc decline last year.

The closure of 132 edible oil-producing factories from 231 total in the past few years best encapsulates the cacophony of crises that plague the manufacturing sector. according to Abraham Mekonen, vice president of the lobby group Ethiopian Edible Oil Manufacturers Association. He said the tedious bureaucratic maze and foreign currency shortage have dragged the manufacturing sector into unprecedented depths with the increasing onslaught of security problems in the past few years.

As the manager of Tena Oil, which is functioning at a fifth of its capacity, Abraham is not optimistic the multitude of challenges will be addressed short term. The factory, acquired by the SAMANU Group in 2015, processes 200tns a day at full capacity.

With the protracted foreign currency access, he began the quest to erect plants in Dukem town, Oromia Regional State and Qaliti district in the capital.

"I'm establishing a crude oil plant myself," he said, while indicating that his ambitions were met with challenges to access the raw materials from the regional state due to security concerns.

A recent restriction on forex permits by the Customs Commission, limiting its utility to one time amidst a long waiting list for allocation is considered another trouble for the manufacturing landscape.

Commissioner Debele Kabeta outlines a complex contraband network as a defining element in manufacturers' woes. He suggested that 86pc of imports are under invoice along with stark quantity differences between declared and imported ones. He emphasised the importance of closing loopholes to prevent any escalation despite the mismatch in the demand and supply of goods.

"We are implementing strategic reforms," he said.

Realising the spirited import substitution ambition with a small percentage of large-scale manufacturers, which account for 4,000 out of the 26,000 will not be without its difficulties. An ongoing endeavour to provide non-collateral loans to enterprises from eight commercial banks was revealed by the Ethiopian Enterprise Development (EED), which facilities support local factories.

Albachew Nigusse (PhD), director of the Enterprise, said improving the preparation of financial statements to enable better credit scoring will help ease the financial stresses. He indicated that the World Bank's recent 570 million dollar support to enable collateral-free loans through the Development Bank of Ethiopia is a promising development. Meanwhile, he points to the 120 manufacturers who export as one of the reasons for the selection of a mere 34 producers in a 25 million dollar financial package offered by the policy bank.