Beyond the Pitch Financial Constraints Continue Challenging Ethiopian Sports

Beyond the Pitch Financial Constraints Continue Challenging Ethiopian Sports

Ethiopian football has not progressed to the best interest of football fans. Participation at international tournaments has been a luxury the national football has barely afforded through the years. As much as on-the-pitch criticism has been evident, financial constraints have also challenged the development of football and Ethiopian sports in general. Robust marketing and stronger support to regional federations could be the way forward, writes Abiy Wendifraw.

Weeks before the African Cup of Nations (AFCON) opening in Cameroon, officials at the Ethiopian Football Federation (EFF) were keenly waiting for a response from the government regarding a request for a grant of ETB41 million—close to USD820,000—that they claimed was needed for major expenses related to The Waliyas’ participation at AFCON 2022. The requested amount was extremely lower than the budgets of other tournament competitors.

The allocation for Team Senegal which even upset the country’s football federation President, Augustin Senghor, is almost 10 times higher than the Waliyas’. “Quite often, when we talk of budget for AFCON, the population thinks we spend immensely. But I can cite five to six countries with bigger budgets than ours,” he told local media after receiving close to USD8.6 million from the government.

Unlike their counterparts from the west African country, EFF officials seemed very grateful for the approval of an ETB35 million (USD700,000) grant considering the financial pressure the government is facing to address other more pressing issues in Ethiopia. They attempted to remind policymakers that the budget for national teams taking part at international and continental tournaments should not be a headache for the federation alone.

The ratio of the annual expense that was paid for a series of matches the men’s national team made in its attempt to qualify for AFCON and the World Cup in the 2020/21 season indicates the burden EFF had to carry because of international competitions. Almost a quarter of the year’s total expenditure of ETB122 million was spent on the men’s team, which is only one of six national teams the federation finances in different gender and age categories.

“Most of the national teams secure a budget approved by Parliament for big tournaments,” said Bahiru Tilahun, Secretary-General of EFF at the annual general assembly held in January. “Had it not been for the budget issue, the team would have traveled to Saudi Arabia for its preparations for continental championship.”

One normally doesn’t hear of many complaints from Ethiopian sports federations. They always look for financiers to execute their projected activities of the year. They plan for sports development, local competitions, and international participation with empty accounts. But all the federations are not in a similar financial league.

The two financially stronger federations in the country declared annual incomes of well over ETB100 million each. In the financial year of 2020/21, the Ethiopian Athletics Federation (EAF) collected close to ETB113 million while EFF managed to generate around ETB125 million.

The financial capacity of the two federations is way higher than most other sport associations which are completely dependent on subsidies from the government. Some of these smaller federations run their competitions with a budget as low as ETB350,000 and they are always expected to look for local sponsors with a marketing effort from part-time executive committee members.

Like EFF, EAF spends close to a third of its annual expenses for the national team taking part in the continental and international championships. In the year 2020/21 alone, the athletics national teams consumed close to ETB30 million of the reported ETB100.3 million of annual expenses. According to the annual financial plan of EAF, the World Athletics Championships in Oregon, USA, in July will require around ETB13.6 million.

Spending a significant part of the budget on international competitions of national teams strongly affects national federations’ capacity to execute and oversee their strategic intents to ensure the development of new talents at all levels and upgrade the standard of local competitions which require sufficient finance.

Because of these huge expenses, the financially strong federations are looking for more and more sponsors since the source of their revenues is few. The highest contributor of EAF’s income in the year came from the ETB53.3 million sponsorship payment by Adidas—close to 50Pct of the annual figure.

Interestingly, marketing departments’ contribution in securing higher sponsorship deals seems insignificant compared to annual incomes EFF and EAF enjoy every year.

Following the financial report at the general assembly, EAF officials were recommended to consider outsourcing their international marketing works. “That is true. We should keep knocking on doors for more income. Unfortunately, requesting sponsorship in Ethiopia is like begging. It should not work that way,” argues Bililign Mekoya, Secretary-General of EAF. “We pay back by promoting their brands in bigger stages. And that is a win-win. Finding sponsorships in the local market is a real challenge. And the new reform at EAF will encourage those who bring in sponsors to shoot for bigger deals and secure 5Pct in commission.”

The size of the financial support EAF splits with regional federations is another area that caught high attention and is being reviewed by officials. “I can see your efforts in different areas. It sounds like you [the EAF] are turning into a charity organization,” said Kejela Merdasa, Minister of Culture and Sports, on his reflection following EAF’s presentation of its annual report for the general assembly which was held in January in Hawassa. “I believe that empowering regional federations should be a long-term solution.”

Bililign agrees. “We are always there to support the regional federations by organizing offices and providing technical experts. The regional federations have much better potential to generate finance by collaborating with the regional governments to reimburse our expenses. Where are we going if Adidas terminates its contract? We all should work on generating finance.” EBR

10th Year • Feb 2022 • No. 104

Abiy Wendifraw

Leave a Reply

Your email address will not be published. Required fields are marked *

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

2Q69+2MM, Jomo Kenyatta St, Addis Ababa

Tsehay Messay Building

Contact Us

+251 961 41 41 41