Blog – Page 111 – Ethiopian Business Review

“I Want to be the Top Industrialist Woman in Africa.”

Amelework Gidey is Founder and Managing Director of Technostyle, a company known for over 20 years as a furniture importer and distributer. She is one of the leading female entrepreneurs in Ethiopia’s emerging manufacturing sector. With the acquisition of the foam and furniture manufacturing division of MNS, a Turkish based textile manufacturer and exporter, Technostyle has been expanding through backward integration of its core businesses since 2015. This has given the company a better competitive edge as it now controls a good proportion of the supply of raw materials.

The Role of Public Enterprises in Ethiopia

Ethiopia’s economic policies of the past two decades indicate the growing role and significance of state-owned enterprises (SOEs). Essential services such as electricity, telecommunications, shipping and logistics, and transport are mainly provided by SOEs. In addition to giant public enterprises, like Ethiopian Airlines, Ethio Telecom, and Ethiopian Electric Power, there are also SOEs engaged in railways, industrial parks, hotels, sugar, and other manufacturing industries. Although SOEs are increasing in the volume of transactions they involve, most remain inefficient and unable to service their debts. Their accumulated debt is especially skyrocketing, putting a huge stress on the national economy. The current accumulated debt of 21 SOEs is ETB846 billion, which is more than half of the total national debts. EBR editors explore the issue.

Beyene Hailemeskel, is the former Director General of the Public Enterprises Holding and Administration Agency (PEHAA), which oversees 21 state-owned enterprises (SOEs) in Ethiopia. He joined the agency 20 years ago, gradually climbing the ladder to the top position. Beyene, who argues that state intervention remains a crucial driver of Ethiopia’s economy, stresses SOEs are undergoing deep reforms to the core. EBR paid audience to Beyene’s reflections on SOEs’ performance and futurity, weeks before he tendered his resignation at the end of October 2020.

Since domestic resources are not large enough to finance various development endeavors, Ethiopia, just like any developing nation is forced to turn to Foreign Direct Investment (FDI). To facilitate the flow of FDI into the country, the government tried to introduce a favorable legal framework in line with constantly changing global dynamics, but without compromising national interest.

Microinsurance is insurance that can be accessed by the low-income segment of the population and small businesses. Despite its business potential and instrumental role in averting social and economic risks, the penetration of microinsurance remains very low in Ethiopia, a country with 80Pct of the population engaged in smallholder, rural, and rain fed agriculture, and where crop and livestock failure is frequent. EBR’s Ashenafi Endale explores why microinsurance could not capitalize on the rising demand and takeoff as a new business front.

Last year, Parliament passed a law forcing financial institutions to accept movable properties like livestock, patents, land operating rights, agricultural products, land ownership rights, warehouse receipts, and intellectual property rights, as collateral. The central bank is betting this will fundamentally change the credit landscape, which is currently highly collateralized and is resulting in bank credit injustice. The new move is expected to expand credit markets and improve access to credit for farmers, micro and small enterprises as well as cooperatives.

Ethiopian football clubs have been financially dependent upon their hometown municipalities and government funding arms for long. However, this is to become history, after the clubs decided to bet higher. A fotball games televizing bid floated by the Ethiopian Premier League S.C, recently established by the 16 elite clubs, fetched a dream amount, enough to free local football from undue dependence and thus usher an unexpected comeback. EBR’s Abiy Wendifraw delved into recent moves undertaken to commercialize the football industry.

Close to 2,000 low-income women make their livelihoods out of the forest up on Entoto Hills, a chain of plateaus covering the northern side of Addis Ababa, at 2,000masl. Entoto is known as “the lung of Addis Ababa,” for its dense eucalyptus tree cover birthing rain and oxygen for the capital.

The Missing Gap at NBE

For more than a decade, inflation has been a serious problem owing to expansive monetary policy. In recent years, political instability, food supply shortages, and the persistent depreciation of the Ethiopian Birr has exacerbated the inflationary phenomenon, peaking in excess of 20Pct recently. This problem is severely hitting the urban poor and the unemployed. Despite monetary tightening using reserve money as the operational target to control broad money growth, the nation’s inflation is unyielding. It has been persistently high over the past couple of years, and it seems there is no hope in sight of bringing it down to an acceptable level. Another serious trouble with the financial sector is the concentration and increased credit exposure of state banks. Unbridled lending to state-owned enterprises has increased their credit risks. Implicit and explicit debt guarantees by the government has increased the moral hazard where many state-owned enterprises have failed to service their debts according to the terms of their loan agreements, leading to the formation of a new state enterprise to take over their debts.

A Sector misunderstood by Policy Makers

Ethiopia is the leading country in Africa in terms of livestock population with more than 60 million cattle, 30 million sheep, 30 million goats and over 1.5 million camels. Livestock contributes over 15Pct of Ethiopia’s GDP and 45Pct of the agricultural GDP. In Ethiopia, livestock is a tractor for crop farming, source of cash income for millions, insurance for uncertainties, fertilizer for crops, expression of status for families, store of asset, and source of foreign currency for the country.

Amelework Gidey: The Bold, Visionary Industrialist

“I Want to be the Top Industrialist Woman in Africa.”

Pushing or Pulling the Economy?

The Role of Public Enterprises in Ethiopia

“There is ample room for both the public and private sectors.”

Zooming in on Ethiopia’s New Investment Law

Microinsurance: The Long Laboring

Collateralizing Movable Property A Game Changer?

Football’s Prospective Comeback

From Back-Breaking Job to No Job

Institutional Independence

The Missing Gap at NBE

Livestock Export

A Sector misunderstood by Policy Makers