News / Africa

Ethiopia Focuses on Entrepreneurs to Maintain Economic Growth

People work on the assembly line at a shoe factory in Dukem, Ethiopia, April 19, 2012.People work on the assembly line at a shoe factory in Dukem, Ethiopia, April 19, 2012.
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People work on the assembly line at a shoe factory in Dukem, Ethiopia, April 19, 2012.
People work on the assembly line at a shoe factory in Dukem, Ethiopia, April 19, 2012.
The Ethiopian government and the United Nations want to train more than 200,000 entrepreneurs in the East African country. Both believe Ethiopia needs a stronger private sector to maintain its fast economic growth.
 
The Ethiopian government and the United Nations Development Program, UNDP, have launched a three-year program to train the entrepreneurs. The say the businesses established by these new entrepreneurs potentially could create about 1.2 million jobs.
 
Ethiopia’s minister of urban development and construction, Mekuria Haile, said the mindset of Ethiopians needs to be changed.
 
“In spite [instead] of looking for jobs and living as employees, to challenge their attitudes to become social and economic entrepreneurs who will create jobs for others. Viable and competitive enterprises that will become the backbone and foundation of the country's industrial growth and transformation,” said Mekuria.

The focus is both on start-up entrepreneurs and small and medium enterprises. The development program is based on four pillars: institutional development, entrepreneurial development training, business development services and partnerships.
 
UNDP resident representative to Ethiopia, Eugene Owusu, said the four areas deal with the key challenges that entrepreneurs face in Ethiopia.
 
“More needs to be done to create a more conducive environment to allow business to thrive. The labyrinth of bureaucratic controls, lack of access to credit, a convoluted logistic system, amongst others, all require priority attention,” said Owusu.
 
Ethiopia is one of the world's fastest growing economies, but still ranks only 174 out of 187 countries on the UNDP Human Development Index. Although human development has improved by 32 percent in the last two decades, almost a third of the country still lives below the poverty line.
 
Ethiopia has known double-digit economic growth for the last few years and has implemented the ambitious Growth and Transformation Plan to become a middle-income country by 2025. Much of the projected growth is based on the public sector, an approach that is difficult to maintain according to the International Monetary Fund [IMF].

The goal now, according to Ethiopia's leaders, is to encourage a bigger role for the private sector in the East African country.
 
Ethiopia’s Prime Minister Hailemariam Desalegn pointed out that the new three-year program will not establish new businesses just for the sake of having more entrepreneurs in the country.
 
“The government will not be in the business of propping up enterprises that are not competitive in the name of creating employment opportunity. That, we believe, is counterproductive,” said Hailemariam.

Ethiopia is Africa's second most populous nation after Nigeria. Hailemariam said creating jobs for young workers is imperative, as a majority of the nation is under 25 years old.
 
“As much as our huge population can be a source of strength and growth, it could also be a source of vulnerability and social tension unless we are in a position to offer job opportunities that can absorb this huge chunk of our population,” said Hailemariam.

The first round of trainees, like marketing entrepreneur Azeb Assefa, ended their training on the day the entrepreneur program was officially launched. She said the training helped her improve her business skills as she learned to work on her improvement areas.
 
“I have weakness in networking, and I have a weakness in risk-taking and persistence. So the techniques that have been given for us to improve such things helped me,” she said.

Entrepreneurs graduating from the program, such as Azeb, are expected to train others.
 
The program will cost $26 million. So far, UNDP has allocated only $6 million. The Ethiopian government and UNDP say they will come up with the rest of the needed money.

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Comments
     
by: Alem
February 23, 2013 9:58 AM
Mimi, Ph.D, I see you don't check your facts. You assumed I am "Diaspora pundit" [whatever that means]. Do you really believe money-laundering and corruption in Ethiopia was due to "private sector, and weak tax base?" Why was this problem NOT addressed in two decades when all we have a government run by one party and no oposition? You think multi-billion conglomerate EFFORT [run by the late Prime Minister's wife and friends from Tigray] is private? At least you admitted to the fact that there are "the usual suspects of African dictators and their cronies." But to then say they "DO NOT have as much part in the money laundering scheme as members of the private sector" is simply absurd. You must not understand how dictators run their affairs. If you are serious about all this write on what happened to the tens of millions of aid money collected in the name of the hungry in the early 1980s, to date unaccounted for and in the "private" accounts of EFFORT. The 8.3 billions figure you grudgingly accept is the tip of the iceberg.

Let us turn to the late PM Meles' response to a young questioner at the World Economic Forum on Africa regarding corruption. It did not take the Prime Minister to point fingers to "greedy foreign corporations as a main driver of corruption." It is always the imperialist, the terrorist, the Diaspora, etc, and NEVER the rulers [this being the case where there is dictatorship and no accountability]. I will quote you from report at the Forum:

"What is the poison that leaders face when you go to national palaces, and transforms people with vision sometimes into ordinary thieves? Let's start with the total amount of loot in Africa, and what our role as leaders in that loot[ing] is," said Meles. "The vast majority of the loot[ing] is done by properly organized companies through all sorts of accounting gimmicks."

Meles said African leaders are forced to be facilitators for foreign companies who demand favors in return for their investment that might means jobs for their people.

"It's a difficult thing to manage because our bargaining cards are very limited," he said. "We need these companies to create jobs, in order for them to come to Africa. The image is very negative, so the risk is artificially spiked. And if the risk is artificially spiked, the return has to be commensurate with the risk. And so it's difficult to attract them without extraordinary returns."

The Ethiopian leader said that sometimes leaders give in to temptation.

"Sometimes we facilitate without being paid," he said. "At other times we say, 'Okay, if your family's farm is being looted, why not join in?' I think that is the most insidious form of corruption. It affects everybody, including those whose hands are not in the till." It is unfortunate that a highly educated individual like yourself [with a Ph.D.] refuses to deal with what is so evident to a lay person.
In Response

by: Selam B. from: Ethiopia
February 23, 2013 11:03 PM
Alem, you quote Meles as saying, "The vast majority of the loot[ing] is done by properly organized companies through all sorts of accounting gimmicks." He's clearly pointing to the UNDP report itself, which you refuse to read and choose to believe report says the opposite, no surprise. C'est fini!

"Fools," is what the Obama's UN Sec. Susan Rice called Ethiopian opposition groups, and the whole country saw that on live TV. God bless her!

by: Alem from: Ethiopia
February 21, 2013 3:56 PM
Marthe, It was the UN that reported nearly 12 billion dollars of aid money have been transferred to a foreign bank account [UN Financial Integrity Report 2011] and now the same UN wants to throw away tens of millions of dollars? I have a simple question. How could a nation where corruption has been deepening every year for the past two decades develop and equitably distribute resources? [It has not happened yet.] How could a nation develop where it is it a terrorist act to criticize the ruling party [in this case only one party] without a private press? without fair elections? when the state is the sole proprietor of the commanding heights and not subject to rule of law? when the ruling party is sustained with a 3 billion-dollar aid package every single year? I tend to agree with the the minister of urban development and construction who said [sic] "the mindset of Ethiopians needs to be changed." Unless the minister and his party deny being Ethiopians change he glibly referred to should begin with them. Let him and his party first release journalists Eskinder Nega, Reeyot Alemu and hundreds more prisoners of conscience before lecturing us on a new mindset.
In Response

by: Mimi Ph.D from: Ethiopia
February 22, 2013 10:23 AM
Alem, Diaspora pundits like you have never really read the UNDP report you quote, it covered 1990-2008, $8.3 Billion lost...And report faults the private sector, and weak tax base.

"...Finding of the report that raised eyebrows among panelists was the revelation that the usual suspects of African dictators and their cronies DO NOT have as much part in the money laundering scheme as members of the private sector."

by: Ras Mitat from: Ethiopia
February 19, 2013 10:32 PM
Another useless project to finance all expenses paid lifestyle of foreign NGOs.

$26 Million over 3 years to give seminars on how to better network and sell yourself...Big joke!

They could spend the money on a vocational school to train certified mechanics, plumbers, electricians...But solving problems also ends the need for charity, closes their budget, and no more NGO lifestyle!

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