Paradigm Shift: Entrepreneurship Taking Precedence Over Public Jobs In Ethiopia

Paradigm Shift: Entrepreneurship Taking Precedence Over Public Jobs In Ethiopia
Entrepreneurs are builders

AFRICANGLOBE – In Ethiopia, a country of 90 million the main and almost the only source of employment was the government. Previously many young graduates dreamed of joining a government offices and becoming a public servant. But these days this attitude has been replaced by the idea of becoming an entrepreneur or self-employed.

Getahun Ekyawu is one of these new thinkers. He graduated six years ago from Hawassa University in Hawassa City, 268km south of Addis Ababa. He began thinking about starting his own business even when he was student at the university. After graduating, he started his first business, establishing a mushroom farm with an initial capital of $450.This business has blossomed into a $10,000 entity and employs over 15 people. Gethaun’s learnt about entrepreneurship from a course he took at the university. However, there are now a number of private training institutes for young or prospective entrepreneurs. These institutes offer short and long term courses ranging from three to nine months. The average cost of such trainings is between $45 and $110.

Dr. Werotaw Bezabeh owns a training centre. He established Genius Entrepreneurs Training Center 10 years ago with an initial capitalization of $2250. It currently generates more than $25,000 in revenue annually. “We have trained students for 413 rounds and our plan is to train one million entrepreneurs,” said Werotaw. Identifying business opportunities, how to prepare business plans and business ethics are some of the courses offered at Genius.

According to Weratowu, the first attempt at teaching entrepreneurship in Ethiopia dates back to 22 years ago, but that was short-lived. Teaching only resurfaced in 2000 after constructive foreign efforts – funds and personnel – produced a group of local entrepreneurial coaches including Werotawu himself. Many tertiary institutions have now incorporated entrepreneurial courses into their curricula. There is also a plan to offer entrepreneurial courses at a post-graduate level.

Entrepreneurship is all about freedom, becoming your own boss, says Werotawu. “I used to work as an employee for a very long period of time and the money that I would get from that employer was even higher than my current salary from my own company, but I am very happy with my current status because I know that I can grow this business and benefit myself and my country”. Getahun shares similar sentiments.“I have many friends who work as an employee since the time of our graduation, at first it seemed that they were at good status far ahead of me, but now things have changed and the difference between me and them is visible both in terms of money and freedom, I have surpassed them even I can hire them.”

Though both individuals agree that local awareness about entrepreneurship is growing, they indicate a need for more programmes aimed at addressing challenges faced by entrepreneurs. An example of such a challenge is sourcing funds for local projects or ideas. The lending capacity of banks is very limited in Ethiopia, making it difficult for entrepreneurs to get loans. According to the World Bank, Ethiopia has one of the lowest amounts of credit available to the private sector in the region. It was equivalent to 14 percent of GDP in 2012, while the regional average was 23 percent.

However bank experts are a lot more optimistic. They believe that as the result of growing saving culture, the credit issue will be solved within the next few years. The government is also keen to get in on the act. It now provides loans for young entrepreneurs who are willing to organize themselves through Micro and Small business Enterprises (MSEs) associations. But some entrepreneurs complain that the working areas under the government’s schemes are limited to a small number of sectors..

“The concept of Entrepreneurship is all about attitude and as you know attitude is not something that you bring or change overnight, “says Werotawu. It has been only 23 years since the country adopted market-led economic systems after the overthrow of the socialist regime, Derg. The regimecontrolledEthiopia for 17years under the leadership of Colonel Mengistu Hailmariam. During this period, a wealth ceiling was put in place which prohibited any individual amassing wealth over $25,000. As a result, interest in entrepreneurship dwindled until the liberalization of the economy in 1991. Entrepreneurship is considered vital for national growth in many economies. Ethiopia, like many developing countries has problems with identifying and supporting this resource.

Nowadays it seems the Ethiopian government has also turned its attention to entrepreneurship. In February 2013, Prime Minister Hailemariam Desalegn launched the new Entrepreneurship skills and business development services program to reach entrepreneurs across Ethiopia. The Entrepreneurship Development Centre (EDC), based in Addis Ababa, manages the program in collaboration with the United Nations Development Program (UNDP). The centre offers potential entrepreneurs and Micro and Small Enterprises (MSEs) a six-day intensive Entrepreneurship Training Workshops (ETWs) in addition to other customized entrepreneurship trainings. These workshops are to help and develop entrepreneurial mindsets and behaviors in participants and encourage them realize business ideas.

Paradigm Shift: Entrepreneurship Taking Precedence Over Public Jobs In Ethiopia
Both, certified teachers, will go on to train locals on the intricacies of Entrepreneurship

EDC also provides Business Development Services (BDS) to business owners to improve their management and operations and to potential entrepreneurs to support their start-ups.

Since its launch, the Entrepreneurship Development Program in Addis Ababa has organized 24 entrepreneurship training workshops and two customized entrepreneurship trainings for 1050 participants. They have actively worked to include women and youth. Overall, the EDC has a plan to reach 600,000 entrepreneurs particularly women and youth and also facilitate the establishment of 200,000 Micro and Small Enterprises (MSEs) by 2015.

Despite policy related bottle necks, business for entrepreneurship teachers like Werotawu seems good. As of September 2014 he had sold more than 80,000 copies of his books and his DVD lectures on being an entrepreneur. He has even established a company called Entrepreneurship Development Service Share Company that plans to run both training institutes, and television and radio programs that enlighten the public about entrepreneurship.

Ethiopia has plans to become a middle-income country by 2025. In order to materialize this plan the country has been pursuing its five year Growth and Transformation Plan (GTP). The GTP which aims to transform the country’s economy from an agriculture based economy to industry led economy by strengthening the involvement of the private sector.

Though, the path to success for Ethiopian entrepreneurs is not easy, education pioneers like Werotaw believe that the ever growing number of entrepreneurs will play a significant role in the push to transform the country’s economy. With new entrepreneurs like Getahun, Ethiopia may yet see a strengthened private sector improve the country’s economic fortunes.


By: Yoseph Mekonnen