Dr. Mulugeta Feseha is a researcher, an author of many books and Community Services Director at Addis Ababa University. He has over 14 years of research experience in the tourism industry and he has written five books on tourism development. His first book entitled as 'Participatory Tourism, the Future of Ethiopia: A case study from Adwa’ was published in 2010. Though unpublished, he and his colleagues wrote a second book on 'Community Based Tourism Development: From Debre-Tabor to Mekdela.' His third book was about the fundamentals of community based eco-tourism development in Ethiopia. And then, he published other two books one in Tigrigna another in Amharic languages. The essence of these books mainly concentrates on how to map tourism resources and create national and regional tourism database center; while keeping their authenticity how to transform tourism resources into customer friendly tourism products; and how to implement tourism that is environmentally friendly and which benefits the community. The books also included ways of creating job opportunities for the youth and women in the tourism sector. Recently, Dr. Mulugeta has conducted an exclusive interview with The Ethiopian Herald on the opportunities and challenges of tourism development in Ethiopia. The excerpt:
Could you first brief our reader about the various opportunities of the Tourism industry in Ethiopia?
One of the opportunities in Ethiopian tourism is the availibility of the diverse tourism attractions. For example, its national parks, biodiversity, landscapes and wonderful water resources. All are still untapped. The country has both historical and archaeological heritages that go back to three thousand years. It is known that most of the discovered human ancestor fossils and the oldest stone tools are discovered in Ethiopia. Ethiopia also has a unique and modest weather. These attractions could grab a large number of visitors to the country.
Above all, Ethiopia has more than 80 nations, nationalities and peoples with lots of cultures, different costumes, food and drink. They have also unique hair styles which could astonish foreigners. Besides, Ethiopia is one of the countries where, natural and cultural interactions are exhibited vividly. So, unlike other African countries, Ethiopia has undisturbed cultural attractions as old as 3000 years and diverse natural attractions together. The country has indigenous historical, archaeological and cultural heritages for many successive years as it wasn’t colonized. The availability of these and other wonderful tangible and intangible heritages are opportunities for Ethiopia.
Despite its multiple tourist attractions; the country did not utilize it fully and efficiently that could also be another great opportunity for the development of the tourism sector.
Nowadays, the government has a serious commitment to develop the tourism sector. Besides, the private sector has been expanding and playing its part in developing the sector. One of the significant facilitating factor is the development of infrastructure both in the urban and rural areas that every Woreda in the country is interconnected. The Ethiopian Airlines has also been offering regular flights in all tourism hot spots in the nation. The country has lots natural, historical and archaeological heritages all distributed all over in the country.
Another great opportunity in the tourism industry is the strong demand for job by the youths, women and many members of the society. The expansion of the industry offers a wide range of job opportunities for thousands of citizens and enable them switch from farming to tourism and diversify their livelihoods.
Then, how do you express the development of tourism in Ethiopia at this time in point?
There is strong interest and commitment from the government's side. However, there is lack of informed society or well trained manpower that can spearhead the development of tourism at the required level. Besides, there is capacity limitation to implement the policies and strategies crafted for the development of tourism industry and there lacks tourism destinations’ map and manual to make destinations easily visited.
There are two important things in utilizing the untapped tourism resources for development in Ethiopia. Firstly, there must be a travel manual and a destination map which describes what is located where and narrates why that attraction attracts tourists; and the other one is empowering the society so that they could fully engage in tourism development and become beneficiaries from tourism. If the government of Ethiopia decides to develop tourism, the first thing to be done should be to know the tourism resource base and empower the community concurrently. While carrying out community empowerment, the positive and negative effects of tourism development on culture should be reviewed. Are the existing cultures be easily eroded or attacked by the development or further flourished? This should be studied and answered.
The willingness of the society in sharing their cultural experience for tourists is also the other issue to be considered. We have to asses if we have the actual platforms at Regional, Woreda and destination level. To this effect, all stakeholders should discuss and agree on the opportunities and challenges. Economically, even though we have the resources and people can engage to diversify their source of income, there is still gap in entrepreneur skills. People are not well aware about the services and activities of tourism.
Equally important, tourism is not smokeless industry as it is always said. Tourism enhances environmental degradation, promotes noise, air and water pollution. Hence, when developing tourism awareness should be given to community on how to manage wastes; reduce air, water and air pollution.
Tourism development has to consider the existing cultural, social, economic, technological and environmental contexts. This need to be followed by identifying the bottlenecks that hinder the community from involving in the tourism development; and the next step is to design capacity building strategy to train, educate and mobilize the society so that it will be part of the tourism development process.
The ABCs of tourism development targets how to change the resources into products. This process includes having a strategic plan which narrates how to develop tourism and how to empower communities by the tourism sites. The strategic plan should also deal with the management plan that should exist at the destination so that the tourism development could be competitive, standardized and well managed. In addition to that the ways of promoting and marketing the sites should be well considered.
What do you think is the government’s assignment in developing the tourism industry?
There is a big challenge. I have been doing research for the last fourteen years. We initiated and attracted government officials, higher learning institutions and other pertinent bodies to utilize the research findings. However, except to organize a platform, there are no initiation and deployment of research outputs into development.
Hence, the first assignment is to utilize what is already studied in connection to the sector. However, we know that researchers think that they have done wonderful jobs; when it comes to implementations and to the stakeholders end, it dissolves. Interactive work is very important here. What has been done by the researchers should be presented to stakeholders, amended and implemented by the government. When I say the government, I am referring to the sector which is assigned to the development of tourism and culture that is the Ministry of Culture and Tourism. There has to be a mobilization at all levels from the parliament up to the lowest group: people of tourist destination sites. Issues like where are we in terms of tourism development, what needs to be done, where do we aspire to reach and what should be the way to reach there should be studied at the government level.
It is also paramount important to support research outputs. So far, we were working and publishing books from the little fund we obtained from the university which is very insufficient to do extensive research. And many of the time, we write books and we fail to publish them. Obviously, publishing books is a personal job but publishing development oriented books is a national job that needs support. But none of the books we published were supported by the government except the very last one. We had to beg foreign embassies for publication. So, the other assignment should be to think how to utilize research out puts.
The initiative for the development of tourism pilot sites in selected mega historical sites of Adwa and Mekdela should also be the other assignment that I recommend for the government officials to pursue the initiatives. And finally, establishing a platform where researchers and stakeholders would interact through the initiative of the government could be the priority.
What do you think is the role of researchers in transforming the sector?
Researchers have their own mandate. There is a territory where they could work versus not. Researchers take initiatives to carryout researches and probably they create platforms and invite the end users. But that cannot be implemented unless a particular sector takes the responsibility. Our experiences witnessed that in every initiative that we took, senior officials usually gave words but did not bring about significant changes at the desired level. Even the media usually talk about what has happened but nothing came out about the implementation and the follow up, which indicates the fact that any initiative carried out by the researcher will not go anywhere that there has to be a responsible organ to carry that out.
Do you intend to forward any recommendation for the government or any other concerned body?
Most of the time, it has been said that universities are islands where research outputs are shelved. No opinion in the reverse way. Many of the government offices are shielded, shielded probably as strong as diamond and not easy to penetrate. When someone goes and visits the sector offices, what they said in the media is not similar to what they do for their research partners. There is a wide actual divergence.
You don’t see such an interest. I think the accountability should be serious on those who did not discharge their duties accordingly. They should have to go to research institutions through their research and development offices. Otherwise, the sector offices stay locked in their offices and the researches left behind in the universities. I know also offices like the Ministry of Water, Irrigation and Electricity with functional research and development section. This section has its own tentacles to access university professors and discuss about new research findings. That should be the way to go. I do recommend the same to the Ministry of Culture and Tourism.
Before we conclude our stay, let me give you the chance if there is something you wish to add on this issue?
What I should add here is while Ethiopia has lots of tourism attractions yet untapped, there is high possibility to utilize these sites. When we talk about tourism there are people afraid of cultural degradation and alteration. But if we really think about the developed countries, for instance Germany, France or the US, there is no cultural alteration at all. The only reason for this is simply it is not they are magic people but because they have empowered their people.
If people are empowered, they know what is right and wrong and there would no fear of cultural alteration. It is possible to protect cultural erosion as empowered people could develop a sense of ownership.
There are also other people that wrongly think as tourism has great dependency syndrome. Those highly engaged in the tourism sector are passive and if the sector downturns, these people will face crisis.
But that is not true. When people in the sector are certified, it is possible to make mandatory criteria that they will have a second job than only clinking on tourism business. There is always mechanism to protect potential fears.
Another challenge is that there is perception emphasizing on the difficulty of training the farmers residing around the tourism sites. But this is totally untrue. When we go to the rural places to teach people about tourism, the farmers are very practical and they understand it easily. So, what has to be done is teaching them interactively via their local languages so as to easily engage them in the tourism sector. Therefore, there should be consolidated efforts towards utilizing untapped tourism resources and developing the sector.
BY HAFTU GEBREZGABIHER
Now every sector in the world is introducing digital technologies to its day to day endeavors. Agriculture, fiance, health, education and other development sectors are becoming unthinkable without technology. Technology is easing and facilitating life in an efficient and effective manner even if it has its own demerits.
The Government of Ethiopian has made the development of information and communications technology (ICT) as one of its strategic priorities. The endorsed and currently enforce ICT policy is a demonstration of its commitment to the development of ICT both as an industry and an enabler of socioeconomic transformation.
The policy stems from the recognition of ICT as the key driver and facilitator for transforming Ethiopia's predominantly subsistence-agriculture economy to an information and knowledge-based economy.
One of the guiding principles of the Ethiopian government ICT policy is that the government shall actively collaborate with the private sector, civil society organizations and communities to promote and encourage the use of ICT towards transforming Ethiopia to knowledge and information age. The policy also promotes the necessary coordination to establish cooperative practices and spirit amongst various stakeholders for a cost-effective development of ICT. Thus, it is creating favorable environment to enhance the exploitation of the sector towards overall fast development by elaboration and institutionalization of the national ICT development framework and the creation of the former Ethiopian ICT Development Agency (EICTDA), and the current Ministry of Communication and Information Technology (MCIT). The Ministry is responsible to coordinate and supervise the planning and implementation of Communication and Information Technology development initiatives and ICT policies.
According to the information from the Ethiopian Telecommunications, the ICT sector in Ethiopia has seen substantial growth over the last decade and plus years. Mobile subscriber base has now grown to 57.4 Million and total customers including fixed, mobile and internet are exceeded to 59 Million.
The country has also seen a substantial growth in mobile internet users largely fuelled by the availability of CDMA across the country. The government has continued to invest in the communications infrastructure to meet this growing demand.
Ethiopia has also been working towards stimulating the demand for the underlying infrastructure by increasing access to the public sector network.
The government has already been active in interconnecting schools, agricultural research institutions, districts (Woredas) and promoting applications that bring efficiency in delivery of public services. Some of the achievements include the launch of a Government Portal, a Justice Information System, a Driver and Vehicle Management Information System, a National Records and Library Management Information System, a Public Sector Human Resources Information System, a Trade Registry System, and an Exam and Placement System and so on.
A multi-lingual national portal operational is also one of the achievements in the recent years. Most government ministries and agencies have now their own portals that are connected to the national government portal. These ministries and agencies use their portals to deliver information and transaction services to citizens. The portals provide a platform to interact with citizens through various e-participation features.
The government of Ethiopia has also started to put infrastructure in place for an "IT Park" to attract ICT service companies, particularly those involved in outsourcing. This IT Park, located approximately 18 miles outside of Addis Ababa in Bole Lemi, is now officially opened and private IT companies are expected to set up shops there soon. And the government has also plans to manufacture and export IT equipment from this park.
Ethiopia's ICT landscape is rapidly evolving. The current contribution of the communication sector to the GDP is a little which is estimated to be over 2 per cent when compared to the 4 per cent average in the East Africa region.
Experts in the field of agriculture suggested that Information and Communication Technology(ICT) has lots of benefits in the area. Agriculture is an important sector with the majority of the rural population in developing countries, including Ethiopia depend on it. The sector faces major challenges in enhancing production in a situation of dwindling natural resources necessary for production. The growing demand for agricultural products, however, also offers opportunities for producers to sustain and improve their livelihoods. Hence, ICT technologies play an important role in addressing these challenges and uplifting the livelihoods of the rural people.
The benefits of ICT for increased agricultural productivity and strengthening the agricultural sector includes the provision of timely and updated information on agriculture related issues such as new variety releases, emergence of new threats such as diseases, weather forecast, pricing control, warning alerts etc. Now farmers across the globe and in Ethiopia have an immediate communication using their mobile and applications on it to get update information.
It is said that ICT enhances agricultural productivity in various ways. One way is through enabling stakes in the stream to understand and address global agriculture development challenges. The continued increase in globalization and integration of food markets has intensified competition and efficacy in the agriculture sector, and has brought unique opportunities to include more smallholders into supply chains. As we know agriculture faces a range of modern and serious challenges, particularly in developing countries as it is exposed to price shocks, climate change, and continued deficiencies in infrastructure in rural areas.
The use of ICT in agriculture is not just limited to the above listed benefits. It is also crucial to increasing efficiency, productivity and sustainability of small scale farms. Information about pest and disease control, especially early warning systems, new varieties, new innovations to optimize production and regulations for quality control could also be assisted with such ICT technologies.
Moreover, better markets resulting from informed decisions about future crops and commodities and best time and place to sell and buy them could also be easily managed through ICT. Similarly up-to-date market information on prices for commodities, inputs and consumer trends could be well understood using ICT.
ICT Strengthen capacities in various ways and it also reduce social isolation, widen the perspective of local communities in terms of national or global developments, open up new business opportunities and allow easier contact with friends and relatives. It also assists the sector in facilitating agricultural research endeavors and the implementation of new findings as well.
According to the Survey on the use of ICT, Ethiopian Agricultural Research Institute( EIAR), which is one of the oldest and largest agricultural research systems in Africa that comprises of 17 research centers and many sub centers located across various ecological zones in the nation, is now connecting all its zones and centers via Virtual Private Network (VPN) mainly for administrative communications and knowledge sharing services.
Ethiopian Institute of Agricultural Research (EIAR), ICT Directorate Tadesse Anberbir told The Ethiopian Herald that the institute has recently conducted a survey to assess the availability and relevance of the use of ICT for Agricultural research in EIAR.
He said “We conducted the survey through online questioners and interviews. And we have found that the use of ICT for agricultural research in the institute is still in its initial stage and lack of ICT policy and awareness about ICT for agriculture (e-Agriculture) by researchers and administrative staffs is the main challenge in most research centers.”
The poor ICT infrastructure, lack of centralized agricultural research information system, access and dissemination of the huge resources currently available in EIAR are also critical challenges that we found in our study, the director underlined.
Tadesse further stated that all research centers should be upgraded, awareness should be created and e-Agriculture policy and framework should be crafted at institutional level for researchers to use ICT and the underlying infrastructures efficiently.
Many energy consuming tasks are now solved as EIAR is connecting its various zones, research centers and important stakes across the nation through ICT and things are easily moving. He said adding implementing ICT in areas such as agriculture has immense advantages.
He further said that EIAR-AgriNet, which is a network of 17 agricultural research centers within EIAR, is fully administered by the institute and currently all the research centers are connected via a virtual private network (VPN) which is dedicated for EIAR.
“The main objective of the EIAR-AgriNet is to virtually connect all research centers which are physically located all over the country and in the future EIAR-Net is supposed to provide advanced services such as Video Conference, E-Learning, Cloud and etc.
EIAR-Agri Net portal which is an extra net portal that has been developed to share resources and access different services from Head Quarter and offer trainings and other connections could easily be conducted for most research centers mainly on the use of different services for researchers and administrative staffs via the portal.
However, he stressed accessing EIAR-Agri Net services from any where is challenging mainly because router is required in each center. In the near future we will buy routers from the Ethiopian telecommunication corporation (ETC) and do the configuration for all research centers.
As the world is tapping the potential of the technology, Ethiopia is beginning technological revolution which is crucial for efficient timely repose in all sectors including agriculture. And it is told by practitioners in the area that the use of ICT for agriculture like in many other sector is crucial.
BY YARED GEBREMEDEN
It is a common knowledge that Ethiopia is a country in which the livelihood of 85 percent of its population depends on agriculture. The sector has always been the pace setter of the country’s economy. It is therefore natural that developing agro-industry has become a top priority agenda of the nation.
The development of agro-industry can effectively set the transition from the export of raw agricultural products to value added, processed and standardized quality agricultural products for the global market targeting at increased national foreign exchange earnings.
Ethiopia is indeed endowed with more favorable agro-climatic ecology which enables it to produce a variety of crops either for food or as raw material inputs for various industries.
Traditional Ethiopian agricultural export products include: coffee, livestock products such as skins and hides, leather, live animals and meat as well as oil seeds and pulses, fruits, vegetables and flowers, textiles, natural gum, spices and mineral products. Some figures speak for themselves. An estimated 65% of the country’s coffee is naturally dried before export. When it comes to livestock, Ethiopia is the world’s tenth largest livestock producer and the biggest exporter of livestock in Africa.
As recent report indicate, nation’s livestock resources are estimated to be approximately 57.83 million cattle, of which 55.38 per cent of them are female. It has also 28.89 million sheep, 29.7 million goats, 1.23 million camels, 60.51 million poultry, 10.37 million equine and 5.9 million bee colonies.
Ethiopia presently offers the global market a wide range of processed and semi-processed hides and skins. Some of the products, such as Ethiopian highland sheepskin, are renowned for their quality and natural characteristics. The export of finished leather and leather products such as leather garments, footwear, gloves, bags and other leather articles are also showing remarkable increments.
Ethiopia produces a variety of organic oil seeds and pulses which are also used for grading in international markets. Sesame, Niger seeds, linseeds, sunflower, ground nuts, rape seeds, castor oil seeds, pumpkin seeds, haricot beans, pea beans, horse beans, chick peas, beans and lentils are all exported to countries of the EU, Asia, the Gulf States and neighboring African countries.
Natural gums used for industrial and pharmaceutical purposes are also among the major agriculture related export items.
Tea, Fruits, vegetables and flowers are also exported to international markets. Major vegetable export products include: lettuce, potatoes, green beans, okra, melons, white and red onions, shallots, cabbages, leeks, beetroots, carrots, green chilies and tomatoes.
Among the main exportable fruits are oranges, mandarin grapefruits, mangoes, guavas, lemons and limes. Cut flower and vegetable production are fast growing export businesses, and Ethiopia is a center of diversity for a variety of flowering plants. The volume of export of these products is growing and showing great promise. Main cut flower exports include: statice, alliums, roses and carnations.
Agro-processing prospects become manifold when potential is exploited along the life cycle of the commodity. For example, maize flour or maize starch processing provides maize germs; gluten, feed and other byproducts that can be further processed or marketed. Similarly, in livestock based products, processing can be made of meat, bone, hide, skin and wool.
As the largest agriculture based sector, agro-processing, in Ethiopia is dominated by the food and beverages industry. In addition to the size of the sector becoming significant, its growth trend predicts nation's future opportunities.
Even by regional standards, Ethiopia can confidently enjoy a comparative advantage by exporting value added agro-industrial products to neighboring countries.
Food importing countries like Sudan, South Sudan, Somalia and Djibouti mainly drive regional market for processed goods. For instance, some 60% of food consumption in Somalia is imported. Ethiopia earned 300 million USD from Somalia, 93 million USD from Sudan and 75 million from Djibouti from export of semi and processed foods earned in 2013.
Overall, the regional market offers even greater shares and there is room to improve export performances to the East African region.
As for the international market, Ethiopia has many bilateral and other trade agreements which makes the country one of an interesting investment destinations.
Ethiopia remains therefore a pertinent choice for agro-industry and agro-processing investments along with the value chain.
According to Ethiopian Investment Commission, over 11,000 foreign investors and joint venture (local with foreign) were registered to invest in agro processing in Ethiopia between 1994 to July 2015, though less than half of them have set up business in the country.
Despite the viable advantages the country can enjoy in accelerating the development of agro-industries through the formation of agro industrial parks, there are quite a few challenges that the sector is expected to face at the take off stage.
The availability both in quality and quantity of raw materials for the agro industrial parks is of crucial importance for the smooth development of the sector. It is difficult to assume that the few private and state farms can fully provide these raw resources. It is also impossible to depend only on the products from patches of farmlands owned by local farmers.
Indeed, the current farming development in the nation is not in a position to support the aspired manufacturing and industrial transformation at the moment. To end this, the government has set an ambitious target in its second Growth and Transformation Plan to modernize the agricultural sector and to be in a position to provide input so as to support the agro-processing and manufacturing sectors.
Although there is a potential in Ethiopia for producing organic raw materials for agro industrial parks, the processing of strong coordination and networking among stakeholders involved in the development of agro industries can take some time as a viable strategy needs to be put in place through mainstreaming the task of supporting agro industrial parks from different angles.
Ensuring adequate financial resources, particularly for those local investors who wish to join the parks is an important factor that needs to be addressed.
Setting up a viable environmental protection projects in close proximity with the parks require concerted efforts of not only responsible stakes in the economy but also a meaningful and reward based cooperation from residents in adjacent communities. This requires a continuous and well targeted effort.
Major stakeholders in the sector include the Ministry of Agriculture, Export Promotion Agency, Ethiopian Standards, Conformity Assessment Agency, Industrial Parks Development Agency, Agricultural Research Institutes
Export of agro industrial finished products in the global market entails fulfillment of international export standards for food and food related items including codex alimentarius. The certification of export commodities from the agro industrial parks and other farms is a major pre-condition for qualifying for good market prices at the global markets.
Despite the above mentioned advantages and challenges, there is a bright future for the development of agro industries in the country. The sector can easily absorb huge amount of labor force and can play a decisive role in import substitution for various industries like beverage and textiles.
Ethiopia has set the right direction and strategy for the development of agro industry both in and outside of the industrial parks. Over the coming two years of GTP II, meeting targets in the plan is of crucial importance for the uninterrupted economic growth of the country.
BY SOLOMON DIBABA
Over the past two decades, Ethiopia has been experiencing rapid economic growth at annual rate between 8.7 and 11 percent which makes it the fifth-fastest growing economy among the 188 International Monetary Fund (IMF) member countries.
According to the World Bank’s latest edition of Global Economic Prospects, Ethiopia is forecast to be one of the fastest-growing economies in 2017, with an anticipated Gross Domestic Product (GDP) growth rate of 8.3 per cent in 2017, followed by Tanzania, Côte d’Ivoire and Senegal by 7.2, 6.8 and 6.7 per cent respectively.
The growth, as the report prospects, is far faster than advanced economies. By contrast, global growth is projected to be 2.7 per cent.
Ethiopia's accelerated growth does not spring out of the blue. Rather, as many agreed, it has been gained through the unreserved efforts to exploit the untapped natural resources, favorable agro-climatic zones, abundant and easily trained work forces parallel to government's relentless effort and its investment friendly policies, and incentives.
Particularly, cognizant of the crucial role that the agricultural sector plays in generating foreign currency and identifying that Foreign Direct Investments (FDI) plays in the economic development of the country, the government along with stakes has been working diligently to improve the quality and volume of agricultural export products. As a result, it has enabled to supply diversified commodities to global market and realize the intended results.
For instance, during the past few decades the country has shown remarkable growth in exports and supplied diversified agricultural products such as coffee, oil seeds, cereal, fruits, vegetables, varieties of spices, flowers, natural gum, live animals and meat to the international market. And successively generated substantial foreign currency.
Ministry of Trade Information Directorate Director Dr. Yibeltal Assefa said in the 2016/17 fiscal year the nation has earned a total of 2.91 billion USD from export market. Agricultural produces account for 2.18 billion or 75 percent of this sum.
The sector also contributes 39 percent of Ethiopia’s Gross Domestic Product (GDP). It also creates job opportunity for 73 percent of the labour force.
“Coffee remains Ethiopia’s leading foreign currency earner by generating over 882.4 million USD during 2016/17 fiscal year followed by oil seeds and cereal with 345.2 and 280.2 USD respectively.’’
Khat and cut flower, he further said, have also generated 272.9 and 218.5 million USD in the aforementioned period respectively.
In the same way, a total revenue amounting to 8,775 million USD was secured from the spice, herbs and aromatic sub-sector over this same fiscal year, as Eyoel Legesse, Fruit, Vegetable and Spice Processing Industry Director with the Ministry of Industry stated. The amount of revenue gained in the two preceding consecutive fiscal years was 6.473 and 2.560 million USD respectively. The revenue gained in the just ended fiscal year as compared to the preceding two consecutive two years, has shown gaining pace.
However, the amount of hard currency obtained, compared to country's potential in the export market, is insufficient.
Ethiopia should hence, address the key bottlenecks that undercut its competitiveness at global market to boost its exports and generate substantial earnings from export sector. It should diversify and increase the volume of its exports, add values to existing export items. Likewise, it should rectify some problems that could spoil the export trade like poor farming practices, pre and post-harvest processes, storage, packaging and transportation facilities.
Most importantly, ongoing efforts to meet international quality standards need to be further scaled up as quality is an integral factor in export trade. Overcoming these challenges, definitely, will have considerable importance in enhancing country's export competitiveness and keeping it on its path of economic success.
Indeed, addressing the challenges will not be merely a responsibility of one party. Rather it requires concerted efforts of associations, stakeholders and the public at large to take the initiative, address and solve problems.
Public enterprises are setup to accelerate economic and social development by attending to both commercial and noncommercial objectives. But, what is the state of their effectiveness and efficiency currently in terms of benefiting the economy and carrying out their function?
Going by the magnitude of the country's economic dependence on public enterprises, and given that essential services such as electricity, telecommunication, shipping and logistics are mainly provided by them, some claim that they are hitting both their commercial and welfare objectives.
But, they face several challenges, especially in relation to managerial capacity, corporate mentality and striking a balance between their commercial and non-commercial aspects, which have an effect in effectiveness and efficiency.
According to various data, including Forbes Global Magazine, at the end of the 70s, there were 200 large public enterprises that accounted for 20% of country's economy. After having a portfolio of about 200 enterprises, that number has come down to 20 after many of them were privatized with the change of policy when public enterprise reform was launched requiring these enterprises to operate on a competitive basis in a free market setting, says Ministry of Public Enterprises Corporate Communication Director Wondafrash Assefa.
Given the fact that public enterprises command huge quantum of capital and operate in the major sector of the economy, they have big impact on the economy, the Director says. In the first 11 month of this fiscal year, they have brought in no less than 3 billion ETB to the government as dividends. “Generating this much income is not an easy feat,” he adds.
They also provide huge employment opportunities, especially to the youth. For instance, many young people are working in the Ethio-Djibouti rail construction, he further says.
The economic benefit of the enterprises goes beyond employment generation to yielding huge amount of capital as dividends to the government, for Alemayehu Woldeyohannes, Project Research and Study Senior Expert with the Ministry.
The enterprises are also source of technology, where they foster the adaption and learning of new and old technologies next to education institutions.
The owners of public enterprises are the taxpayers and the public expects from them goods and services that are important to their day to day activities, which they are doing well, Alemayehu opines.
Wondafrash indicates that there has also been success in terms of identifying new gaps in the market and setting up or reorganizing enterprises that would attend to those gaps in the market. There have been some enterprises that have come about to this end; enterprises like Ethiopian Agricultural Works Corporation, or the Ethiopian Construction Works Corporation, which aim to modernize and contribute the agriculture and construction sectors respectively.
But, there is still some way to go in terms of effectiveness and efficiency, as public enterprises in the country faces several challenges from various sectors, Alemayehu claims. “Although some public enterprises are effective and efficient, generally speaking there is still some way to go.”
Singling out Ethiopian Airlines, he makes the case that some state owned enterprises are successful in being effective and efficient, while some are not. “What makes Ethiopian Airlines successful comes from its corporate mentality, and autonomy of its managers.” He traces the source of this success to organization's management skill; notwithstanding of course other variables that contributed to its achievement.
A research was made last year by the Ministry to study the success factors of the Airlines so it can be used as a model by other public enterprises of the country.
Alemayehu also points out to other public enterprises (other than the Ethiopian Airlines) that have been successful like National Alcohol Organization and Ethiopian Shipping and Logistics Services Enterprise. He again charts out the fundamental and pivotal point of the difference between the successful and not-so-successful ones to managerial skills, creating corporate mentality and optimal utilization of internal human and other resources.
For Alemayehu, human resource is not just one of the resources, its more than that as it can create other resources. He adds that the Airline employ huge amount of resource in training its managers and employees in carrier path, which helps the organization create a corporate mentality by attaining a workforce that fundamentally understands their duties and responsibilities and create a sense of ownership.
While managerial capacity, corporate mentality and striking a balance between commercial and non-commercial aspects has been challenges facing the sector, according to Wondafrash, the Ministry has issued various solutions to solve the challenges and elevate the effectiveness and efficiency of the enterprises.
Regarding managerial skills, Wondafrash concedes there is a limitation in that aspect and the Ministry has provided short and long term training to the members of the management to rectify the issue. “We have also provided long term training in collaboration with South Africa University, and make the enterprises arrange training plans for their managerial staff.”
He also underscored the dynamics of the market where the private sector comes after their best people, which causes high employee turnover. The solution to this is to create huge reserve of managerial capability to withstand the turnover, and we are working towards this end, he added.
Furthermore, as a mechanism to make the enterprises more efficient by elevating their managerial capacity, and creating a corporate mentality, more business-savvy people are assigned to the Board, a body tasked to oversee the enterprises.
One of the problems that have been identified with regards to the Board – the authority mandated to appoint and direct the management of the enterprises – is that given its members are high government officials whose time is consumed with heavy government works and commitments, the task was given less attention. This year, the Board has been reorganized with this in mind.
“From now on, the configuration of the Board will be 50 percent political officials, and 50 percent expert, professionals.” The Ministry is expecting huge changes and improvement to come from this reorganization and efforts in bettering the managerial skills and creating corporate mentality within the enterprises.
In addition to this, for the enterprises to work on maximizing their internal capacities, and on creating image (brand) whilst recommending the government to provide access to capital to the enterprises and look after resource wastage in the enterprises, Alemayehu suggests.
BY ROBEL YOHANNES
Generating 882.4 million USD in 2016/17, coffee hits record amount
Ethiopia’s economy is in the realms of a dominant agriculture sector, which displays the diversification of commodities to export for increased revenue but still striving for competitive quality.
Ethiopian agriculture remains an important source of economic growth that not only contributes 39 percent of the country’s Gross Domestic Product (GDP) but also employs 73 percent of the population.
It is also extending its leading role in export performance by contributing over 75 percent of the 2.91 billion USD that the country has secured in the 2016/17 fiscal year.
Despite its pivotal role for national economy and peoples’ livelihoods, the agricultural export performance has been challenged by quality gaps.
Dr. Hussein Ahmed, economist, states that there are certain shortcomings in meeting international quality standards, which has remained being one of the major hindrances in becoming strong competitor in the global agricultural markets.
The government and stakeholders’ engagement to increase the volume of agricultural exports and diversify commodities has not yet brought the desired outcomes due to quality issue, Dr. Hussein emphasizes.
Ministry of Trade Information Center Directorate Director Dr. Yibeltal Assefa on his behalf says poor farming, handling, packaging and storage techniques in the agricultural value chain are the major challenges in the export quality.
The performance of coffee, sesame, cereals and other major exportable commodities has also been inconsistent; thereby, affecting the country’s foreign currency earnings, he adds.
Dr. Yibeltal says: “Despite the enormous success Ethiopia has gained in diversifying commodities and increase the volume of products, there are still gaps in meeting international quality standards that have been hampering our competitiveness in global markets.’’
Reminding the country’s plan to obtain 3 billion USD from agricultural exports in the 2016/17 fiscal year, Dr. Yibeltal indicates some 28.12 percent shortfall as the actual performance registered 2.18 billion USD.
Despite the country's fertile soil and conducive climate for the cultivation of coffee, its share in the world coffee market, for instance, has not yet reached at the desired level in comparison to countries like Brazil and Vietnam, he elaborates.
Dr. Hussein also agrees at the Director’s idea. He says shortcomings in applying modern and viable technologies among farmers, suppliers and exporters is the primary factor for quality driven price fluctuation.
The analyst further states that inadequate transport connectivity has also played adverse role in reducing the quality and competitiveness of Ethiopia’s agricultural commodities in the global market.
Dr. Hussein says: “In spite of the huge demand North American and European consumers have shown for Ethiopia’s organic coffee, we could not have retained the market at the desired level due to issues in export quality.’’
Dr. Yibeltal elaborates that the government along with other stakeholders has engaged in inspecting the quality and safety of commodities that could brought remarkable changes. There are also efforts exerted to meet the international quality standards for agricultural products with the help of successive capacity building trainings.
He says: “In the 2016/17 fiscal year, Ethiopia secured 882. 4 million USD from coffee by commodities and the revenue obtained from oil seeds and cereals was 345.2 and 280.2 million USD respectively.
While Khat and cut flower brought Ethiopia 272.9 and 218.5 million USD, the total revenue the country secured from agricultural commodities in 2016/17 fiscal year surpassed that of the past year same period by 26 million USD.
Representatives from Ministry of Trade have paid frequent visits in various states and held consultations aimed at enhancing the value chain among farmers, cooperatives and Ethiopian Commodity Exchange /ECX/.
The consultations have evidently successful in identifying gaps witnessed in commodity grading, inspection and storage services and issued possible solutions.
ECX have also expanded its warehouses in cereal and oil seed growing areas to address problems associated with poor storage facilities.
Dr. Hussein stresses multi- stakeholder intervention is crucial to improve agricultural commodities quality thereby enabling the country to maximize its revenue.
He says: “The government expected to strengthen the role it has played in supporting smallholder farmers access to modern technologies and inputs as well as easing the loan and custom procedures.’’
Enhancing storage facilities and the transport system would also have a pivotal role to a timely delivery of exportable items particularly for cut flowers, meat, vegetables and other perishable products.
Furthermore, the commodities should be well packed and labeled to gain wider acceptance.
In addition to improve the farming and handling techniques, due attention has to be given to brand additional coffee items to keep the current achievement in the commodity and attain more foreign currency.
Dr. Hussein says facilitating conditions for smallholder farmers share experiences of commercial farms in applying modern technologies is need to be among government’s priority.
The economic analyst states that development agents have the greatest responsibility to introduce smallholder farmers with modern technologies and build the latter’s knowledge in practical way through pilot plots and other mechanisms.
Dr. Yibeltal notes that the practitioners are exerting key share in enhancing export quality, saying: ‘’Besides their engagement to familiarize farmers with up-to-date technologies and inputs, development agents have also aware them about the relation in producing quality products with increasing revenue.’’
On its part, Agricultural Transformation Agency/ ATA/ has played an essential role by providing high yield items to smallholder farmers thus supporting commodities’ competitiveness in the world market.
Ethiopia has set target to generate 6.76 billion USD from agricultural commodities by the end of the Second Growth and Transformation Plan (GTP II) period (2019/20 fiscal year) and to become the second leading coffee exporting country in the world next to Brazil.
Both professionals agree that to meet the aspiration in the GTP II, quality issue is the priority, saying: “Quality is not the assignment of a single entity rather a shared responsibility of all actors in the sector to provide an integrated support, supervision and follow up to stakeholders in agricultural value chain.’’
Cognizant of the role agriculture has played for economic growth and the livelihoods of the people, the government has attached due emphasis to enhance its product and productivity carrying out Agricultural Development-Led Industrialization (ADLI) policy, which pave ways for the sector’s development.
Under the umbrella of ADLI, Ethiopia set successive five-year plan that has enabled it to register seven percent agricultural growth on average during the past decade.
Agricultural products have contributed over 75 percent of Ethiopia’s total revenue from foreign trade in the 2016/17 fiscal year and if the quality of exportable commodities improved, the revenue would automatically increase and enable the country to exploit the potential market niche, the experts recommend.
BY BILAL DERSO
Ten African countries will massively contribute in increasing the percentage of Africa's population residing in urban areas between 2015 and 2050.
The research entitled 'Urbanization Trend in Ethiopia' and carried out by UNICEF's Social Policy and Evidence for Social Inclusion (SPESI) was presented recently on the Consultative workshop on 'Complementary feeding in Ethiopia'.
According to the research, Ethiopia is one of the ten countries which determine continents' urban population by 2050. Nigeria, Democratic Republic of Congo, Tanzania, Uganda, Kenya, Niger, Sudan, Egypt and Mozambique are also predicted to influence continent's urban population in the stated same year.
Pertaining to Ethiopia, the finding says that the percentage of population residing in urban areas has consistently been in ascending trend since 1950, which was 4.6 percent, to 2015 (19.5 percent), and it is expected to rise to 26.8 percent by 2030 and to 37.6 percent by 2050.
Noting that in 2014, the size of the population living in urban areas in Ethiopia was 18.3 million, the finding states that the number rose to close 20 million in the 2017.
It is expected that the average annual growth rate of urbanization between 2012 and 2030 to be 4.1 percent. This will lead to an estimated urbanization rate of 37.6 percent in 2050; 70.5 million people out of an estimated total population of 188 million people in the country.
By the year 2050, 58 million children under 18 (6 percent of Africa) and 32 million adolescent (7 percent of Africa) will be in Ethiopia, the research indicates.
Currently, Ethiopia is the second most populous country in Africa after Nigeria with 99 million people.
BY HAFTU GEBREZGABIHER
Tourism industry can spur the growth of diversified industrial bases and easily gears large number of agrarian population into tourism business through interactive training and empowerment, Addis Ababa University Community Services Director and Tourism Researcher Dr. Mulugeta Fiseha says.
In an exclusive interview with The Ethiopian Herald Dr. Mulugeta says as the sector demands relatively low investment and training costs, Ethiopia's tourism sites have the potential to reduce poverty levels through creating massive jobs for the youth, women and farmers.
Tourism is not yet tapped, he says adding the fact that the sector which very much suffices with the government policy of building resilient economy which is known as smokeless industry could be very much helpful in the development trajectory.
While talking how to develop the sector Dr. Mulugeta says “One way is through promoting the development of tourism. It is possible to create huge number of jobs to people, improve livelihoods, and maximize the tapping of untapped resources.”
The researcher underlines through the provision of short term trainings in the technical and vocational educational training scheme, people can develop skill to pursue a career and be certified to operate tourism services.
Praising government's strong commitment and interest to transform the sector, Dr. Mulugeta further said: “Ethiopia needs to promote and market its multitude tourism resources. To this effect, he stated government bodies assigned for the development of tourism in the country should work in collaboration with research institutions and researchers to utilize their research outputs in a manner to transform tourism.”
Equally it is prudent to access micro financing system and extend small loans and other basic financial services to people that don’t have access to capital, according to Dr. Mulugeta. .
This strategy apart from enabling the people to create new employment opportunities and pull themselves and their family out of poverty, it is central to develop the sector, and preserve the attractions and heritages.
BY HAFTU GEBREZGABIHER
South Korea pledges to strengthen its development cooperation with Ethiopia in the areas of education, health, rural development, capacity building, infrastructure and other streams.
Korea International Cooperation Agency (KOICA) Deputy Country Director Kim Jun Su tells to The Ethiopian Herald that Korea involves in various development activities in Ethiopia.
Particularly, the Agency works in the area of education as it is by far the most significant sector to nation's long term development schemes, the Deputy Country Director stresses.
“We have been giving much of our supports to different parts of the country. For instance, we are involved in Tigrai, Amhara, Oromia and Southern Nations Nationalities and People's State in the areas of health, education, energy and rural development streams and we are working to outreach Agency's programs in other parts of the nation,” the Deputy Director elaborates.
KOICA Country Director Madam Doh Young Ah says that abundant natural resources are necessary for economic growth. However, human resource development is far more necessary and much more important. “South Korea has very little natural resources; but because, it worked diligently in its human resource development, it has reached where it is now. This is an experience that should be well taken by other nations in the world,” she further stresses.
Noting that KOICA has given scholarship for over 1300 Ethiopian officials, experts and academicians in various training and post graduate programs in Korea, the Director says, this year alone the Agency has provided 28 master fellowship awards.
As part of this, Korea will continue providing country specific, regional and global short term courses and masters scholarship opportunities to Ethiopian experts focusing on health, education, rural development, capacity building, infrastructure and others, she reassures.
The Country Director further says KOICA needs to further strengthen its partnership and long standing relationship of the two countries. [
Ethiopia is currently in similar development path like that of South Korea's experience 40 years ago. And very strong determination is required from all stakeholders to sustain the ongoing progress in the nation through building human resource capital in an effective and highly productive manner, the Director capitalizes.
KOICA has put an emphasis on training and technical cooperation as part of human capital development to the nation to assist Ethiopia's development program, she says.
KOICA Ethiopia Club President Fantahun Belew on his part says that Ethiopia has been experiencing rapid economic growth since the past decade and a half. To sustain this growth and transform its economy, the nation has a lot to learn from South Korea, he suggests.
In stance of this therefore, South Korea's support in various streams such as ICT, is crucial, he said adding “We are fortunate to have South Korea's support in capacity building and ICT development.”
Management and Business Consultant Zinare Mamo says for his part that Ethiopia has a lot to learn from South Korea as the nation has developed socially and economically from an extreme level of poverty in short period of time.
According to Zinare, focused planning and conducting regular revisions, high commitment to meet targets, strict work culture, strong monitoring and evaluation mechanisms, focus on science and technology are among the areas that Ethiopia should learn from South Korea.
This global superstar nation with the third largest market economy in Asia and the 13th largest market in the world has a lot to share to the ongoing development of Ethiopia, Zinare opines.
Abrehet Temesgen is a farmer from Tigrai State of Kushet Mi Mekden, Mesebo Station in Enderta woreda. She visited South Korea three years ago and witnessed Korea's' farming experience.
According to her she has learned a lot from Korean modern agriculture and adopted new technologies in her farm plot which enable her yield better.
The Agency is supporting the community in her village with provision of clean potable water, health and hygiene, building private toilets, constructing roads and small dams, as well as introducing renewable energy and distributing stoves, she witnesses.
The total volume of Official Development Assistance (ODA) which has been channeled through KOICA to Ethiopia for the past 22 years amounted to be closed 149 mln USD.
The relationship and cooperation between Ethiopia and South Korea has historical foundation when Ethiopia sent troops to Korea during the Korean war.
BY YARED GEBREMEDEN