Ethiopian Business Review

Running for the Gold, Running for the Money: Investments of Ethiopia’s World-Beating Athletes

Running for the Gold, Running for the Money: Investments of Ethiopia’s World-Beating Athletes zimpion.com

Prominent athletic victories by their athletes have made Ethiopians stand tall. People from all walks of life have come together to celebrate these heroes and watch the national flag be lifted high. Thanks to recent athletic accomplishments, Ethiopia has started being recognized for enduring runners and captivating stories instead of famine and poverty.

These days however, their glory in the international sporting arena is not the only way they are working to make their country better. Several of the country’s heroes and heroines in the Olympics and World Championships as well as other international competitions have started investing their hard earned prize money back into businesses.

Haile Gerbresillasie is at the forefront of this movement. With an estimated capital of nearly ETB one billion, he has been aggressively investing in many areas. These investments have created job opportunities for more than 1,000 citizens as well as contribyting in tax revenue for the nation. Last year alone, his companies, Haile & Alem International and Marathon Motors, paid about ETB 28 million in profit taxes. Base on this one can easily deduce the amount paid by the rest of his companies.

Addis Ababa’s complexion has been dramatically transformed through construction of real estate financed by Ethiopia’s world-beating, long-distance runners.

Haile’s first business engagement was constructing rental units in centrally located parts of urban areas. He now has over eight buildings in Addis Ababa and regional towns. Some of those buildings are now being used for offices to help run his large business empire.

Kenenisa Bekele has also become an emerging businessperson. The four-star Kenenisa Bekele Grand Hotel was designed by an Italian architect and is now one of the new buildings sprouting up around Bole Medhanealem. About ETB 200 million has been invested in the hotel so far and it will provide job opportunities for more than 200 people when it begins operating, according to the athlete’s confidant.

The 5,000 and 10,000 meter world record holder has also started building an inclusive training facility in Sululta with a massive investment of ETB 350 million, part of which is completed and has started providing service. It will be an international standard sports facility with a capacity to accommodate over 120 people with facilities like a running track, golf course, basketball and handball courts and other recreational facilities.

Many of the high rising buildings under construction around Megenagna are also owned by athletes. Derartu Tulu’s 15 storey building is the tallest one, and adjacent to it, there are three buildings under construction which are owned by Sileshi Sihine and his wife Tirunesh Dibaba, Gezahegh Abera and Meseret Defar. Tirunesh and Sileshi are also building an 18 storey four-star hotel on Africa Avenue, commonly known as Bole road where Karamara hotel used to be. They have plans to expand their investments and upgrade the standard of the hotel once the construction is finished, Sileshi told EBR.

Buildings around Megenagna that are being constructed by athletes-cum-investors (Buildings of Sileshi and Tirunesh, Gezahegn Abera, Meseret Defar, and Derartu Tulu from left to right).

In front of Bole Medhanealem Church, next to Kenenisa’s Grand Hotel, Gebre Egziabher Gebremariam and Birhane Adere are also building 10 and 8 storey buildings respectively, intended to accommodate businesses. Marathon winners Gete Wami, Worku Bikila and other successful athletes are also investing.

One of Haile Gebresilassie’s buildings in the capital, head quarter for Marathon Motor, the exclusive importer and distributor of Hyundai vehicles in the country, also owned by the athlete.

Ethiopian born athletes who compete under other flags also have been putting their money back into the country’s economy. Maryam Yusuf who runs for Bahrain is one of them. She has just completed a four star hotel around Megenagna. Her spouse, Wondossen Disso told EBR that, “building and furnishing the hotel has cost us more than ETB 200 million and it will be officially inaugurated in the Ethiopian New Year.” They have also plans to invest in agriculture and construction.

In each of the buildings under construction an average of 100 temporary job opportunities have been created.

Some of the athletes told EBR that they are engaged in constructing buildings and renting them partly because it is a lucrative business and partly because they are easier to manage than other business, leading many to question their business acumen.

Henock Assefa, a business consultant, argues; “It is wrong to underestimate what Ethiopian athletes have done in business and investment. Constructing buildings for rental purposes is very lucrative and many of the elite business people are involved.”

The demand for business places and offices around the locations the athletes are erecting buildings is very high and it will contribute to the economy greatly, according to Henock.

“Despite the fact that most of the athletes came from rural areas and have a lower educational background; they are doing a superb job in investment and business,”he told EBR.

Haile Gerbresillasie is engaged in diverse investment and business ventures. His real estate company is constructing 220 condominium housing units and 38 G+1 villas around Ayat. Through his firm, Marathon Motors, Haile is also the sole importer and distributer of Hyundai vehicles in the country and is planning to establish a Hyundai assembly plant in Ethiopia. His resort in Hawassa, Haile Resort is a favorite destination for tourists who set off for Southern Ethiopia.

One of Haile Gebresilassie’s buildings in the capital, head quarter for Marathon Motor, the exclusive importer and distributor of Hyundai vehicles in the country, also owned by the athlete.

He has added agriculture in to his business portfolio, by developing 1500 hectares of land in Masha, Southern Nations, Nationalities and People Region (SNNPR), for the purpose of producing and exporting coffee. “It is like a dream come true.” Haile, who is happy for engaging in the agricultural export sector, told EBR. “I have been selling myself around the world, I always regret not exporting our products and this is just the beginning, I plan to join other business in the future particularly businesses in the export sector.”

Athletes who race also earn a substantial amount from the tracks. According to a local newspaper Kenenisa Bekele, earned about USD 1.14 million from prize money and appearance fees in 2009 alone. Haile was able to win USD one million in a single event, for breaking the world record in a 10 Km race in Qatar, in 2002. “The organizers didn’t expect the record to be broken there; it is really hard, like trying to break the Marathon record here in Ethiopia. However, I did it, and they were shocked and the competition has been closed since then, possibly for financial reasons,” he told EBR.

Haile Gebresillasie

Areas of investment:
Real Estate, Import - Export, Hotel, Sport, Agriculture, Automotive
Total capital:
Close to ETB one billion
Number of jobs created:
More than 1,000
Future investment plan:
Export sector
Highest prize awarded:
USD one million (10 km race in Qatar)

Derartu Tulu

Areas of investment:
Real Estate
Total capital:
More than ETB 134 million
Number of jobs created:
More than 100
Future investment plan:
Haven’t decided yet
Highest prize Awarded:
USD 130,000 (New York Marathon)

Kenenisa Bekele

Areas of Investment:
Hotel, Sports’ center
Total capital:
ETB 550 million
Number of jobs created:
More than 500*
Future investment plan:
Expansion projects
Highest prize Awarded:
-------

Tirunesh Dibaba and Sileshi Sihine

Areas of Investment:
Real State, Hotel
Total capital:
More than ETB 400 million*
Number of jobs created:
More than 300*
Future investment plan:
Expansion projects
Highest prize Awarded:
USD 50,000 ( Only Sileshi’s)

Maryam Yusuf

Areas of Investment:
Hotel
Total capital:
200 million
Number of jobs created:
more than 200*
Future investment plan:
Agriculture and construction sectors
Highest prize Awarded:
-------

 

* estimation

Some athletes also generate a considerable amount of money from making advertisements and sponsorships. Haile earns up to USD 150,000 from Adidas and an additional USD four hundred thousand annually if he wins competitions. He also has a promotional agreement with G4S, Diageo and previously with Mercedes Benz. Haile says he is proud of making a promotion for Ethiopian which paid him his first salary when began athletics at the club level.

Doing business and investing is not an easy job. It especially gets worse for athletes whose energy and experience are richer at the tracks than at offices. Since many of them are engaged in constructing buildings, they are frequently challenged with finding a reliable source of materials. This is particularly true when it comes to trying to find quality materials and obtaining reputable contractors. Kenenisa has changed contractors three times while constructing his hotel, according to his business confidants.

Haile sums up the bureaucracy saying, “Even though I am well known and well received I am really frustrated by the amount of red tape and inefficiency in some public offices. For things which can be done over the phone, you have to go several times to that particular office and then when you go there you are told to go to another, time again and again.”

The new Kenenisa Hotel, owned by Kenenisa Belele, next to it are buildings constructed by Gebreegziabher Gebremariam and Berhane Adere around Bole Medhanialem (from left to right).

This is a widely shared opinion among the athletes.

“Government should assign people who can make decisions, who can say ‘yes’ or ‘no’, not someone who says ‘come another time’ or ‘let me talk to my boss,’’ Haile suggests. Despite these challenges the athletes are emerging as one class of investors in the nation’s business scene.

Berihun Mekonnen

EBR Staff Writter

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