Blog – Page 193 – Ethiopian Business Review

Kaldi’s Coffee is one of the best-known Ethiopian brands. The company’s reach is impressive, with 30 branches throughout Addis Ababa and in Bishouftu, a town 45km southeast of the capital. In 2017, Kaldi’s will also cross the Red Sea, to serve coffee enthusiasts in Dubai.
Its founder, Tsedey Asrat, 40, a model-turned-entrepreneur, isn’t as well known as the brand she manages because she avoids journalists. This is due, in part, to the controversies that have surrounded her tenure at the helm of the Kaldi’s brand. The controversies began when she opened her first branch in Bole Medhanialem in 2004 because she said she would open 40 branches, considered by many an immodest statement. The resemblance of Kaldi’s logo to that of Starbucks – a giant American coffee chain founded in 1971 that operates more than 23,500 branches worldwide – added to the controversy. Starbucks later approached the Ethiopian Intellectual Property Office to ban the use of Kaldi’s logo, a battle she eventually won.

Insurers in Ethiopia recently launched crop insurance policies for smallholder farmers. Crop insurance is an umbrella term used to refer to a series of policies designed to help farmers avoid or recover from risks associated with farming. In a country like Ethiopia, where smallholder farmers are especially susceptible to shocks like drought and cyclical poverty, many say that these insurance policies are a welcomed change. Still, others argue that there is more work to be done to improve the lives of smallholder farmers beyond offering crop insurance services. EBR’s Ashenafi Endale met with key stakeholders to learn more about the details of the policies that many hope will bolster the lives of small-scale farmers.

Heritage tourism refers to the practice of attracting visitors to a place because of its unique cultural or historical significance. In this way, the ancient town of Lalibela has been a stalwart of Ethiopia’s tourism industry. The town attracted more than 40,000 tourists in 2014. This inflow, a significant increase from previous years, helped the town generate ETB300 million in the 2013/14 fiscal year.

Leasing – an agreement by which one party conveys an asset to another for a specific amount of time in exchange for periodic payments – may help small manufacturing enterprises better access machineries and other goods. In order to finance leasing contracts, many micro and small enterprises (MSEs) have turned to newly formed companies that provide funding options to these institutions. According to the International Finance Corporation (IFC), lease financing benefits not only MSEs, but can strengthen the overall economy as well. EBR’s Ashenafi Endale spoke with key individuals in the financial and manufacturing sector to learn more about the issue and its promises in boosting productivity.

The news that Lucy, the Ethiopian women’s national football team, would be competing for a spot in the African Cup of Nations competition was mired in controversy and hope. It represented a moment in which the team was rising to prominence on a continental level. The moment was indicative of a larger trend taking place in the Ethiopian football: more opportunities for women, as even the most elite clubs now own female teams. Still, as EBR’s adjunct writer Abiy Wendifraw explores, there’s still more work to be done to create a more equitable playing field for female football players.

Currency-market volatility has been around for decades, if not centuries. Wide gyrations in exchange rates became a staple of international financial markets after the Bretton Woods system broke down in the early 1970s, and mega-depreciations were commonplace later in the decade and through much of the 1980s, when inflation raged across much of the world. Even through much of the 1990s and early 2000s, 10-20Pct of countries worldwide experienced a large currency depreciation or crash in any given year.

Technological innovation has long triggered diametrically opposed reactions: awe of new possibilities for some; for others, fear of disruptive change. But most of us don’t even realise what is happening. We take change for granted.

There seems to be a consensus that Ethiopia’s decade-long economic growth is largely the result of government investment in public infrastructure and the growth of the country’s labour force. Indeed, government investment in the physical and institutional infrastructure created jobs and growth in the service sector. According to World Bank data, of the 11Pct annual growth rate registered during this period, the service sector contributed 5.5Pct, while agriculture and industry contributed 3.6Pct and 1.9Pct, respectively.

Development requires continuous learning. This is because achieving inclusive and sustainable development is a complex and comprehensive process. That’s why nations have to learn from the experiences of other countries that have achieved better records of development. Though China is facing economic challenges related to its strategic transition, its development experience can still provide a number of important lessons for other countries.
The Chinese successful development experience –double-digit economic growth for nearly thirty years and its position as one of the most powerful economic powers in the world – are important development outcomes that developing countries should note.

Remittances have proven to be a viable way to earn foreign currency. Last fiscal year Ethiopia earned USD3.8 billion this way, which is 27Pct more than export earnings. By some estimates, the country could earn nearly USD21 billion from remittances in five years. This can help fund financing gaps that emerge due to poor export performance, decreased bilateral funding as a result of recessions in developed countries, and meagre foreign direct investment (FDI). Experts note that remittances have the added benefit of exposing more people to formal financial systems. To that end, a number of banks are working to improve their services to bring in more foreign currency. Some people, however, feel that the ambitions of the banks and the government may be premature. EBR’s Fasika Tadesse researched the nuances of the issue to gain greater insight into the potential of remittances as a means of financing Ethiopia’s ever-expanding development.

‘A degree is a plus, not a necessary ingredient, to succeed’

Crop Insurance Aims to Reduce Drought Vulnerability

Lalibela The Promises, Pitfalls of Heritage Tourism

Will Lease Financing Boost Productive Capacity of MSEs?

For Female Footballers More Opportunities Than Before

The Return of the Currency Crash

Mastering the Fourth Industrial Revolution

Growth Role of Smallholder Farmers in Ethiopia

Lessons from the Chinese Development Path

As Exports, Bilateral Funding Fluctuate, Remittances Prove Viable for Financing GTPII