Despite this favorable growth rate, manufacturing in 1975 accounted for less than 5 percent of the gross domestic product (GDP) and employed only about 60,000 people.
Handicrafts, such as weaving, pottery, blacksmithing, leather working, and jewelry making, along with other small-scale industries, accounted for another 5 percent of GDP.
The main characteristics of the manufacturing sector inherited by the revolution included: a predominance of foreign ownership and foreign managerial, professional, and technical staffing; great emphasis on light industries; inward orientation and relatively high tariffs; capital-intensiveness; underutilized capacity; minimal linkage among the different sectors; and excessive geographical concentration of industries in Addis Ababa, the capital city.
The war in Eritrea and labor strikes and demonstrations also closed the approximately 30 percent of the country's manufacturers that had been located in that region.
Among the proposed changes were that private investors would be permitted to participate in all parts of the economy with no limit on the amount of capital invested.