Supporting young entrepreneurs in Ethiopia

Entrepreneurship Development Programme
Ayni's Design is one of the local enterprises that UNDP is supporting through an entrepreneurship programme that aims to create 100,000 businesses and expand another 100,000. (Photo: Aynalem Ayele)

Aynalem Ayele is a young woman brimming with confidence. “Ayni’s Design,” her small jewelry and clothing design shop in the heart of Ethiopia’s capital, Addis Ababa, offers creative designs of leather products, incorporating cultural motifs and items into everyday products for the young and savvy urban customer.

Aynalem just completed an intensive six-day entrepreneurship and business training course as part of a UNDP-supported programme to accelerate the development of the private sector across Ethiopia.

Highlights

  • Since the launch of the Entrepreneurship Development Programme in February 2013, 1,000 people gained entrepreneurial skills and knowledge through entrepreneurship training courses.
  • 100,000 new businesses are expected to be established with a further 100,000 existing businesses expanded.
  • By 2015 the number of profitable medium and small enterprises (MSEs) is expected to increase by 10 percent, with women and youth forming at least 50 percent of workers in the improved MSEs.
  • The UNDP-supported programme is complemented by a Local Economic Development programme that has expanded from 7 to 27 cities around to the country to promote inclusive growth and create jobs.

As she reflects on expanding her business, Aynalem says excitedly that the training course helped her understand one important thing that other courses did not: “How you calculate ahead your business risks.” 

UNDP provided US $6 million to the $26 million Entrepreneurship Development Programme for Ethiopia, launched in 2013 by the country’s prime minister, Hailemariam Desalegn, who remarked that “the acute lack of social capital and particularly that of entrepreneurship skills (…) stands in the way of ensuring rapid industrial growth." 

Girum Tariku, an Ethiopian in his late 30s, joined the programme after having been forced to file for bankruptcy. Following the training, he opened a printing and communication company. He is both the director and a major shareholder of the firm, and provides employment for six young people.

“I took the entrepreneurship training and it really helped me to translate my vision into clear workable objectives,” Girum said. His business, started with less than $1,500, now boasts an expanding capital asset of over around $52,000. Girum speaks of one day becoming a major player in the East African private enterprise scene. 

Recent rollouts have helped introduce the programme to budding entrepreneurs and reached out to university lecturers all over the country, providing them with basic entrepreneurship skills during trainers’ workshops. 

In addition to financing the scheme, UNDP identified similar programmes in Ghana and brought in trainers from that country to teach participants. 

 “This country is on the cusp of a major development transformation,” says UNDP Resident Representative Eugene Owusu. “In Africa, Ethiopia is the country to watch!”

The programme is expected to help 200,000 entrepreneurs through skills training and business advisory services over a period of three years. 

To ensure the full implementation and sustainability of the programme, 25,000 additional people will be trained as trainers and a further 20,000 as business advisors. 


These university lecturers will go on to become local trainers and Business Development Services advisors after completing an intensive six-day entrepreneurship training course supported by UNDP. Photo: UNDP/Ethiopia

Ethiopia is currently implementing the first of three five-year strategic plans to achieve Middle Income Country status by 2025, and the country is on track to meet the Millennium Development Goals on halving poverty by 2015. 

Micro- and small businesses are expected to play a strong role in this transformation and to become a spring board for developing a vibrant private sector.  

Around 1 million jobs have been created annually due to the focus on supporting micro and small enterprises in the country, with official reports indicating that 40 percent of the new jobs go to women. Latest official figures place urban unemployment rate at 17.5 percent, while youth unemployment is 23.3 percent.

For more information contact

Economic Development and Poverty Reduction Unit

  • Entrepreneurship Development Programme

Mio Yokota - Programme Specialist mio.yokota@undp.org

  • Local Economic Development Programme

Yoshiaki Noguchi - Program Analyst (Private Sector and Entrepreneurial Development)Yoshiaki.Noguchi@undp.org

Atnafu Woldegabirel - Programme Officer (Local Economic Development)    atnafu.woldegebriel@undp.org