Words that have been used
to describe the late Honorable Dr. Senedu Gebru include Resistance
fighter, philanthropist, educator, feminist, patriot, author, teacher
and mother. History may
remember her foremost as the first woman elected to Parliament, but her
contributions to this nation were so many and varied, she
could rightly be considered Ethiopia’s Renaissance Woman of the 20th
century.
Although it might seem like more Ethiopians from abroad are moving back to Ethiopia than ever before, it is also true that the much greater outflow of Ethiopians leaving the country in search of better opportunity abroad, continues unabated.
Written by Brian Burrell - Horizon Ethiopia Staff Writer
Sunday, 21 September 2008
Shortly into a venture outside Addis Ababa in almost any direction reveals vibrantly blooming flowers ready to be clipped and color upscale florists’ shelves in many corners of the West. Further into the hinterlands, massive bamboo plantations sprouting hardy shoots are destined for modern floor designs covering custom upscale homes (see Biz and Development). Soon these may end up bearing the brunt of a northeastern US winter. Even deeper into the scattered forest landholdings small-scale bee keepers are producing honey that once was predominately destined for fermentation in tej but is now on the doorstep of the West cleanly packaged and labeled as organic Ethiopian honey (see People and Personalities).
This array of products destined for or trying to penetrate international markets is a far cry from the turn of the last century where a limited number of burlap sacks of coffee beans that, through various decentralized means, found themselves in foreign marketplaces and whose end consumers probably knew little and cared less about their origins. It is even more remarkable considering the almost absent external sector that existed in the imperial regimes before Emperor Haile Selassie I. The occasional unofficial transaction or sporadic merchant trips lasting months is no match for overnight deliveries thousands of miles into new worlds.But there is no mistaking the current economic scenario; Ethiopia’s exports are rapidly expanding in both volume and diversity on the back of half a decade of double-digit economic growth.
“Made In Ethiopia” - while not a powerful brand name yet by any means - is at least a conceptual reality and in practice adorns many more products across the globe than the single product it was officially attached to just a decade or so ago. The catalysts for this growth are varied but revolve around a combination of market forces, government incentives, preferential market access arrangements and an elevated level of entrepreneurship that has the private sector increasingly pushing the envelope to explore markets outside of Ethiopia’s borders.
Promising Figures?
The macroeconomic figures paint a promising picture; exports grew by 18.5% to $1.2 billion in 2006/07 with the mainstay product, coffee, accounting for about a third of the total, generating $424 million. Surpassing the one billion dollar mark is a huge achievement from the disappointing turn of the century numbers of around $400 million.
This huge jump in a short span of time comes on the back of some remarkable domestic growth predicted by the United Nations (UN) and African Development Bank (AfDB) to continue at 7.5% and 7.4% in the next two successive years, or 10.8% if you take the word of the Ministry of Finance and Economic Development (MoFED).
The catalysts include 11% industrial growth, 10.5% in manufacturing and 9.4% in agriculture.
More directly impacting the increases in overseas shipments has been a rebound in international coffee prices that now hover around $1.40 per pound on the New York Mercantile Exchange up from a 30-year low at a mere 65 cents in 2003. But higher commodity prices are unreliable and they are a variety of reasons to be cautious about trumpeting success.
The government itself is disappointed with the seemingly impressive improvements. Last year’s export revenue was only 20% of the target and the recently released Ministry of Trade and Industry (MoTI) 9-month performance in the current fiscal year shows almost 30% underperformance a trajectory that would surpass the 2006/2007 total by only a fraction.
Sector Leaders and Slackers
But amidst all the reasons to be hopeful for the country as a whole, there are specific sectors and individual companies that represent a model for others to follow. The well documented blossoming of the flower industry is expected to reign in $167 million this year. The multi-faceted approach to supporting this sector include massive land grants, tax incentives, increases in flights to key destination countries by Ethiopian Airlines and cooling facilities at Bole International Airport to lengthen the life of these delicate stems.
The mainstay agricultural products, oilseeds, pulses and chat remain solid, each commanding around 10% of the total export values and seeming strong on paper following historic world agriculture price increases as the emerging economies demand more and weather patterns relegate them to producing less. But with the current disappointing rains in Ethiopia that have grabbed the international media’s attention with food shortage reports, it is unclear if these products will remain at the levels they have enjoyed following successive bumper harvests. However, the overall trend is clearly upwards and given the global price hikes on food commodities combined with the private sectors increasing interest in this area, there is indeed reason for optimism here.
The leather industry has been a mixed bag. Though traditionally another 10% of exports, the government has for years been pushing the industry to enter into the production of processed leather goods from the position of focusing on volumes of unfinished and sometimes low quality leather. And this January it put its muscle behind its mouth and slapped a tax on unfinished goods in part responsible for the 25% below target of $75 million in the first nine months.
Leather presents an example of potential unrealized, which is why the government has established incentives (both positive and negative) to spur its transformation into another dominant export sector. With the largest livestock population in Africa and ranking 10th in the world, Ethiopian leather is still mostly known for inconsistency and low quality resulting from poor processing, care and high prevalence of disease. The government claims to have even lost 138 million dollars in annual taxes as the decentralized market relegates so much of the products to informal cross-border trade. But this circumstance is eminently reversible and the All African Leather Fair, the second instalation of which is being hosted by the Ethiopian Leather Industries Association next year, could be a catalyst of such changes."
Exotic (and organic) jams from Ecopia.
Exporters hope to sell $1.4 billion USD annually in 5 years
Coutoure wear from GigiEth Couture Import Export
Top quality apparel from NovaStar Garments
Socially conscious sandals by SoleRebels
Strawberry exports headed for the Netherlands.
Ever Present Needs
Government and international support for Ethiopia’s exports is ever-present, with good reason. The rolling power blackouts, now hitting each area of the capital three days a week, do not affect exporters on direct orders from Girma Birru, Minister of Trade and Industry. The 24/7 electricity for exporters compliments special privileges in the form of tax breaks, lease-free land and input on the massive infrastructure investments transforming the country’s road network.
International help has been forthcoming. The US’s preferential trade arrangement with Africa known as AGOA combines duty free categorization of certain products with trade facilitation services including trade shows and networking assistance backed by the resources of embassies and USAID offices. The EU has joined the fray with new trade preference classifications as well.
Ethiopia needs this. Given the multitude of challenges its economy faces from high oil prices to escalating inflation and the current food shortage crisis in some parts of the country, Ethiopia’s economy is calling out for exports to continually replenish foreign currency reserves and build a stronger base with which to withstand the next drought.
Big Fish in Small Ocean
To a certain extent, some of these programs have paid off. Individual success stories put a sweet icing on a cake of disappointment. Companies like Bostex Plc, makers of soleRebels shoes and apparel have proved that making it onto the shelves of big retailers alongside Nike and the like is possible (see People and Personalities). Leaders in the textile sector like Al-Meda are connecting with big names and shipping large volumes. Soon, the iconic green aprons of Starbucks will be made of Ethiopian cotton (see Biz and Development).
Then again, there are missed opportunities that could have given even greater heft to Ethiopia’s export industry had they been appropriately taken advantage of. For example, a North American retailer of sporting goods contacted by ACX that at one time sourced some products from Ethiopian exporters, terminated the sourcing agreement a short time later frustrated at the lack of attention to detail their Ethiopian supplier exhibited. Notably, the quality of the product had been found to be quite satisfactory.
Experiences such as this result in an unnecessary negative impact not just for the supplier involved but to the sector overall. While there are certainly many Ethiopian producers capable of and indeed currently fulfilling demanding sourcing requirements, there are also their counterparts which have not delivered on the promise of performance that the global marketplace today demands in the most stringent terms. Given that Ethiopia’s image as a country capable of exporting many more products than coffee is in the early stages of being established, it can ill afford setbacks of the abovementioned type. All prospective exporters must further realize that they are in many ways ambassadors of Ethiopian in the global marketplace and must make rapid improvments not just in the quality of thier products but also in the provision of thier services.
Potential is present for even greater achivement; it is only a matter of realizing it.
Meti Yilma is a radio show host, poet, writer, MC, one time tv
personality and a number of other things besides. Including, a top 4 finisher in 2006's Survivor Africa.
Sehin Teferra
is a freelance trainer and consultant with an academic background in
international development and gender equity. She has written since her teens, and invites your comments and
thoughts on her observations.
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There is no question that there is a lot of agricultural investment occurring in Ethiopia right now. The question is how much of that is being initiated by Ethiopians?
Despite a global downturn in real estate prices, it seemed like Ethiopia's market was impervious to it all. But there are signs which point to an inevitable downturn in the near future. Just how far down prices will go is anybody's guess.
After emigrating abroad, going to school and then opening a successful business in London, it only took a vacation to Tewodros Tadesse's hometown of Hawassa to convince him to leave everything behind and move back once and for all.
ESAI celebrates its 10th anniversary this year. Horizon Ethiopia would like to congratulate them on their achievements through the years and wishes them another decade and more of continued success.
