Ethiopian Government Incentive Structure: A Comparative Analysis on Export and Education Sector

Abstract

This study aims to analyze the trade and incentive regime in Ethiopia in the context of the trade liberalization and other market-oriented reforms, initiatives in the early 1990s. As part of the market-oriented reforms, initiatives have been taken to facilitate private sector participation in export trade. Major reform measures were implemented to achieve this objective. For example, foreign exchange retention scheme was introduced to allowing exporters to retain part of their foreign exchange proceeds. There is also a bonded manufacturing warehouse scheme and an import duty rebate scheme aimed at providing exporters of manufactured goods at world market prices. And Export Promotion Council (EPC) consisting of high level government officials, exporters, and service providers led by the Prime Minister was set up in 1992 to design; implement and monitor development polices. Since the establishment of EPC, various incentives were put in place to promote the growth of export products. These incentives will be examined in this paper in an attempt to show the possible salutary effect of equivalent government measures in other areas such as the private higher education sector which the researchers argue deserves equal, if not more, attention.