Entrepreneurial Stimulus for Ethiopia

Residents of Addis Ababa experience the hustle and bustle of their metropolis on daily basis. Its main roads are becoming a popular place for hundreds of small vendors, bravely facing dual challenges: getting hold of the ever-elusive and reluctant customer, and save themselves from the baton-wielding cops, chasing them wildly.

Thanks to their innovative “Run-away display mats”, a trusted companion that helps them to take on both challenges. Almost all of them are young boys and girls struggling for livelihood. The bubbling energy and determination to get their way through is visible in their faces.

With no place to sell, poor financial assistance, less formal education, no jobs, no meaningful support from the government, resisting the brutal bargains from the customers with some compromises, and even worse facing some losses, they stand tall on their feet. They deserve salute, rather than the baton of law enforcing police. With a never-say-die spirit among them, entrepreneurs have already taken birth.

Entrepreneurs, all over the world, have been the drivers of social development and economic prosperity. They have been leading communities, countries, and the world at large away from poverty, helping them to move towards better development and prosperity. Not only wealth of the nations grows and increases, health also improve, bringing in positive changes for many. Various researches have already established the close relationship between entrepreneurship and economic growth.

An entrepreneur is one who has vision, aspiration, determination, skills, and motivation to achieve, and above all a strong will to do something purposeful. The motivation behind the driving force may differ from person to person but nevertheless ends with continuous efforts. Such endeavor generates wealth, and employment opportunities. Most importantly, it creates a sustainable future for a nation, especially in today’s fast-moving, ever-changing and turbulent times.

The biggest problem of a schooled, semi-schooled or even an un-schooled youth is to find of the right livelihood. Failure of an economy to provide suitable employment creates social and economic implications; eventually leading to political crises. That is why channelizing the energy and ambition of young people to nation-building effort deserves the top priority by governments. It’s no different for Ethiopia.

Government cannot absorb all unemployed youth even if it undertakes projects of mass employment. Outside support in the form of foreign direct investment (FDI) or industrial projects or grants can only offer short term relief. They may even worsen the situation by creating a debt trap from which it is difficult to come out. The solution has to come from within, from the people of Ethiopia. Foreign supporters may join together in bringing about the industrialization of Ethiopia in a phased manner. The question is how will this be possible? Some such incentives could be ensuring ease of doing business, avoiding bureaucratic hurdles, administrative complexities, infrastructural bottle-necks, difficulties to access finance, and availing tax incentives. Ultimately, it is the orientation from the leadership and the initiative of the government that will shape the process of industrialization.

Success stories from China, India, South Asian economies, Latin American countries offer ample examples as to how entrepreneurs have changed the fortunes of their respective countries with active support from their respective governments. Industrial and export-friendly policies have helped in creating an atmosphere where many want to be entrepreneurs. They have shed conservative thoughts, embraced the liberalized approach and adopted world-class standards. This attracted both local and foreign investors, prompting customers worldwide purchasing their products with pride and confidence.

Ethiopia has earned a respectable place as a diplomatic hub in Africa. Its capital, Addis Ababa, hosts the headquarters of the African Union, the United Nations Economic Commission for Africa and several other international and regional organizational and over one hundred diplomatic missions. However, the rate of unemployment is around 19.5Pct. This is despite Ethiopia being one of the fastest growing economies in the world with almost 10Pct of GDP growth annually for over a decade. With 105 million people, growing at a rate of 2.42Pct, Ethiopia needs a clear road map to meet the challenges of unemployment. Entrepreneurship is one such path offering a great deal of solutions. And with it industrialization starts.

Creation of an entrepreneurial culture requires sustained effort and support from the government and other stakeholders. Entrepreneur shall meet with success if they are provided with the right ecosystem that provides relevant knowledge, skills, support, and reward.

The knowledge for entrepreneurs is a big asset. It comes with education, starting from a pre-school all the way to university. Education builds up a pool of knowledge, which eventually leads to wisdom. Knowledge makes understanding better. The higher the wisdom, the better the confidence one shall have, be it to take risks or venture into new experiences. The sphere of knowledge is wide and expects an entrepreneur to access all critical information that may influence the venture in short as also in the long run. It briefly includes the business know-how, rules and regulations, customers and competitors, competitive forces or managerial competence, and much more. The system must facilitate access to the ever-growing information, the latest one also, so that the relevant knowledge is continuously updated.
Entrepreneurs need relevant skills and practical exposure to initiate or start a venture. It could be technical, conceptual, human, or leadership and management skills. Customized trainings offer the right set of skills about every aspect of the business we venture in to. They help in translating the confidence into action.

Government has to facilitate all the regulatory approvals like ‘single window clearance’ without any delay. Financial institutions must offer needed monetary support without unnecessary delays and cumbersome pre-conditions. Tax holidays and insurance against losses would further motivate entrepreneurs to take higher risks, leaving them for a fair chance of success.

Governments play an important role in keeping the entrepreneurs motivated spirits by tax rebates, exports encouragement, lower taxes and subsidies. They also use other means to keep the momentum of business going. Recognizing the better performers by giving them suitable awards encourages them to put in more efforts and scale to new heights. It also creates a new breed of young entrepreneurs who will sustain the growth and development of the country.


8th Year • July.16 – Aug.15 2019 • No. 76

Ajay Prasher(PhD)

is professor of management & administration at Ethiopian Civil Service University. He can be reached at ajay.prasher@ecsu.edu.et


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