July 2015 – Ethiopian Business Review

The year 2015 marks the end of the Millennium Development Goals (MDGs) – a set of global targets that mainly aim to reduce global poverty by half and improve the livelihoods of impoverished communities. Despite marked improvements in the reduction of poverty in some countries, there’s still much work to be done to achieve the goals set in 2000. That’s why global leaders are convening a series of meetings to establish the Sustainable Development Goals (SDGs) in order to build on the achievements of the MDGs.

Carlos Lopes (PhD) UN Under Secretary-General, Executive Secretary, UN ECA

Carlos Lopes (PhD), UN Under Secretary-General and the eighth Executive Secretary of the UN Economic Commission for Africa (UNECA), is a well-known global thought leader in African development. Assuming his current position at the UNECA in 2012, Lopes previously served as Executive Director of the UN Institute for Training and Research in Geneva and Director of the UN System Staff College in Turin, Italy at the level of Assistant Secretary-General. His active contribution in research concerning development issues, his experience teaching at top-notch universities in Africa, Europe and Latin America, as well as authoring and editing 22 books have prepared him well for research- and development-oriented leadership.

More than four billion birr was not disbursed in nine months

Five years ago, the Development Bank of Ethiopia (DBE) announced that it planned to give out a large amount of loans to the manufacturing sector, which faced a lack of finances for years. Despite these stated efforts, many local investors argue that they’ve had difficulty in accessing finances. They say that the Bank is plagued by bureaucratic inefficiencies and that it tends to favour foreign investors. In fact, a closer look at the nine-month report of the Bank from the just-ended fiscal year shows that DBE had disbursed only 54Pct of what it planned. They claim that unsettled land issues of loan applicants, and their limited capacities to upfront 30Pct of the equity they need to get 70Pct financing were the major reasons for the Bank’s weak loan disbursement. DBE leaders say policy hurdles that the Bank faces, i.e., the limitation it not accept requests from Small and Micro Enterprises, have contributed to the reasons why a large sum of money has been idle this fiscal year. EBR’s Fasika Tadesse spoke with Bank officials and local investors to write why more than four billion birr was not disbursed to those who need it.

Why Are Local Contractors Lacking in Large-Scale Projects?

Despite the fact that the number of local contractors in Ethiopia has grown by leaps and bounds over the last 20 years, something seems to be amiss with regard to why they aren’t handling large-scale infrastructure projects. Take, for example, road construction projects. Between the 1997/98 and 2013/14 fiscal years, there were a total of 443 road projects being undertaken by foreign and local contractors. Of the total projects, Ethiopian contractors were responsible for 337, amounting to ETB54.9 billion. However, the foreign construction companies maintained dominance in terms of cost of the projects. They executed 106 road projects, worth ETB76.4 billion. Government officials say that local contractors don’t have the capacity to handle large-scale projects, while local contractors say they aren’t given a fair chance to compete with foreign companies. EBR’s Fasika Tadesse spoke with industry insiders to learn more about why local contractors aren’t handling large-scale projects.

The Man with a Big Job

When the House of Peoples Representatives approved Gemechu Dubiso Godana’s reappointment as Auditor-General of the Office of the Federal Auditor General by Prime Minister Hailemariam Desalegn on March 10, 2015, many agreed that he deserves the post. This is because Gemechu is up to the task based on his five years of experience in the position, demonstrating courage, confidence and uncompromising ethics when he reports about the mismanagement of public resources in federal and regional offices. EBR spoke with Gemechu to learn more about his career and the difficulties facing him and his profession.

The Trend of Product Placement in the Ethiopian Cinema

Product placement refers to the strategic placement of a particular good, service or location in a film or television show for the purpose of advertising. The phenomenon is common in the American film industry and appears to be taking root in Ethiopia. There’s evidence to suggest that product placement, when done correctly, can prove a fruitful method for a company to advertise its products or services. However, there is also a downside to this advertising method, as it may turn away potential customers from a particular product if done in a haphazard manner. EBR’s Meseret Mamo spoke with filmmakers and advertisers about the growing trend of product placement in Ethiopia.

In Ethiopia, it’s not uncommon for patients from rural areas to seek medical treatment in large cities like Addis Ababa, where facilities may be better equipped to handle complex ailments and conditions. These patients, however, are often placed on long wait lists and may have to stay in Addis Ababa for days or weeks at a time. This is especially problematic for indigent patients who may not be able to afford food or shelter while they wait for medical attention. A group of physicians at Tikur Anbessa Hospital, however, are trying to change this reality. They established the Gojo Shelter for the Needy and Sick Community in order to make life easier for patients who face difficulties finding food and shelter as they await treatment. EBR’s Meseret Mamo spoke with the organization’s founders to learn more about how they plan to expand their vision.

Despite the worldwide popularity of yoga, the ancient craft has yet to catch on in Ethiopia. A few entrepreneurs are trying to change this trend. In Addis Ababa, one can find a few yoga studios and gyms that offer classes. There are even a few centers that offer training to become certified as a yoga instructor. Still, yoga practitioners argue that more work needs to be done before yoga becomes a popular activity. EBR’s Ashenafi Endale spoke with yoga instructors to learn more about the potential of its growth in Ethiopia.

Competitive advantage: creating and sustaining superior performance

Recently the leading role of the agricultural sector to growth in Ethiopia has been challenged by the service and manufacturing sectors. This is partly due to the government’s policy that focuses on the development of the industrial sector, as stipulated in the Growth and Transformation Plan (GTP).

When World War II ended 70 years ago, much of the world – including industrialized Europe, Japan, and other countries that had been occupied – was left geopolitically riven and burdened by heavy sovereign debt, with many major economies in ruins. One might have expected a long period of limited international cooperation, slow growth, high unemployment, and extreme privation, owing to countries’ limited capacity to finance their huge investment needs. But that is not what happened.

Older Posts

After MDGs, Ethiopia Plans to Move Forward

World leaders are coming to Africa at a time when the continent is no longer a beggar

Carlos Lopes (PhD) UN Under Secretary-General, Executive Secretary, UN ECA

Lack of Policy Framework Chocks DBE

More than four billion birr was not disbursed in nine months

Contracting Dilemma

Why Are Local Contractors Lacking in Large-Scale Projects?

Gemechu Dubiso:

The Man with a Big Job

Hidden Messages

The Trend of Product Placement in the Ethiopian Cinema

Gojo’s Initiative to Assist Ethiopia’s Vulnerable Patients

Yoga’s Slow Growth in Ethiopia

‘Competitive’ Vs. ‘Comparative’ Advantage A Brief Lesson from Michael Porter’s (1990) book

Competitive advantage: creating and sustaining superior performance

A World of Underinvestment