Why Ethiopian Investors are Avoiding the Manufacturing Sector

In our meetings with Prime Minister Meles Zenawi, he frequently raised questions regarding the lack of private sector dynamism [in Ethiopia]. One of his questions was why Ethiopians with large sums of money invested in urban properties instead of building factories. On another occasion he asked how East Asian governments steered the private sector away from speculation and rent seeking and into manufacturing and technology. He also wished to receive literature explaining concretely how Meiji Japan and post-WWII Korea absorbed technology so quickly from foreign-assisted industrial projects.”


Following Ethiopia’s drive for continued economic growth and development, the need for investment financing has significantly increased. The state-owned Development Bank of Ethiopia (DBE), one of the main project financiers in the country has also significantly increased its capacity to respond to the country’s strong drive for development.

In this exclusive interview, Amanyehun R. Sisay, executive editor and Mikias Merhatsidk, editor-in-chief of Ethiopian Business Review, discuss, with Esayas Bahre, president of the century-old bank, issues concerning the financing of the manufacturing sector, corruption in the institute and the opening up of the financial sector for foreign banks, among others. Excerpts:


How MSEs are Failing to Support the Manufacturing Sector

When his career hit a bump in the road a decade ago, Dagnachew Bayabill, 36, moved to Bahir Dar for a fresh start, andbrought with him, his ample experience in the shoe manufacturing industry. After settling in the capital of the Amhara regional state, he started making traditional sandals. Business was good due to the availability of cheap raw materials and lack of competition. Years later in 2007, when Dagnachew and his colleagues asked the city administration for a piece of land for their workshop, the administration suggested that they organize themselves as a micro and small enterprise. This resulted in the establishment of Edget Behibret Leather and Leather Products Enterprise, with a total capital of ETB18,000. Currently, the enterprise has more than ETB one million in capital, and employs more than 50 permanent workers; it has graduated to a “transitional level” that will enable it to join the medium manufacturing industry.


Big Business with Big Potential

In one of Maritu Legesse’s popular songs there is a lyric that reads “Wesheten new enji endiaw segedereder, enes lagere lij wuha shiche lider”. which can losely be translated as “I’ve been hiding my feelings; but [for you], I would even [waste/spend my time] selling water.” Asserting that she is willing even to sell water, which is too cheap to take to a market, to show what she would do for her loved one. Traditionally, selling water which was even as mentioned in the song, unimaginable, at least not in the Ethiopian context. Now, things have changed, and water has become by far, one of the most sellable products in the country.


A Significant Contributor in the Retention of Medical Professionals in Ethiopia

In November 2011, the British Medical Journal published a research article entitled “The financial cost of doctors emigrating from sub-Saharan Africa: human capital analysis”. The research, which was conducted by a group of medical scientists under the leadership of Edward J. Mills (Prof.), chair of global health at the University of Ottawa, Canada, concluded that Sub-Saharan Africa has lost USD2 billion yearly because of the brain drain related to medical professionals.


Taking Over the Services of Iddirs

Recording videos and taking photographs of a wedding ceremony is quite common, as passing time watching these videos and studying these pictures will give one the chance to remember the good times. Nowadays, people attach such videos and pictures on their facebook pages for others to see, giving those who did not attend a chance to view the festivities.


Ethiopia’s Bid to Host the 2021 African Cup of Nations

January 21st 1962 was the greatest day in Ethiopian football history. Ethiopia was able to win its first and last African Cup of Nations (AFCON), after beating United Arab Republic (Egypt) 4-2 in additional time, in one of the most entertaining games ever played in African football history. Ethiopian football legends like Mengistu Worku and Italo Vassalo quenched the trophy thirst of the spectators packed at the then Haile Selassie Stadium.

Industrial System Management is a way of using industrial engineering principles to solve industrial inefficiency, ineffectiveness, and the lack of operation safety. An example would be using facility design to improve facility layout in order to maximize the efficiency of the production process; or using lean manufacturing to eliminate waste and ensure effectiveness in production areas, and using Six Sigma to statistically control and ensure the quality of products.

Banks and insurance companies operating in Ethiopia came in a sister ship , creating a range of possible areas of blending, which include, among other s, dual investment through share purchase(a lucrative source of investment income for insurers), business reciprocity ( as banks entail tied insurance products to guarantee assets at risk), the sharing of headquarters between sister companies, sharing promotional marketing materials, employees, information technology, ATM machines, and of course bancassurance, to mention a few.

The East African country has been experiencing impressive economic growth: double-digit between 2004 and 2010, it has averaged 8.7Pct annually over the past five years thanks to the expansion of agriculture and services. Ethiopia has thus been the fastest-growing economy in Sub-Saharan Africa (SSA). Projected at 6.5Pct annually over the next five years, it is set to remain on a robust growth path.

Ethiopian Business Review | EBR is a first-class and high-quality monthly business magazine offering enlightenment to readers and a platform for partners.

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