The political economy of green industrial policy in Africa: Unpacking the coordination challenges in Ethiopia

Abstract

Like many countries in Africa, Ethiopia has been promoting renewable energy deployment via a number of policies and policy instruments, including through a a public-private partnership scheme. However, these newly introduced green industrial policies (GIPs) encountered obstacles leading to delays in project planning and implementation. In this paper, we argue that the coordination failures among key policy stakeholders, both internally and externally, is a central cause for the ineffective implementation of GIPs in Ethiopia. Our analysis shows that adequate sectoral expertise and coordination capacity of the steering agency are critical, as managing multiple conflicts of interest and preferences among key stakeholders are inevitable when GIPs are introduced. In addition, GIPs often contain multiple objectives ranging from green industrialisation, environmental or climate impacts, and social or economic benefits. Yet the trade-offs among these objectives during the policy implementation should be well recognised and a clearly defined priority is required, which again demands a capable and autonomous steering agency in the host country.