The private sector in Ethiopia is positioned as a supplement to the state-owned economy. In the last 55 years, the share of the private sector in the gross domestic product (GDP) has remained low at an average of 12.5Pct. Currently, it stands at 20Pct. This means that the ability of the private sector to organize and push for regulatory reforms has been limited because of the top-down approach to development. In this article, I advocate for bottom-up, local, and endogenous approach to private sector development in order to increase the size of private sector, its organizational capacity, and its political and economic role.