Supporting young entrepreneurs in Ethiopia

UNDP Africa
UNDP is supporting an entrepreneurship programme that aims to create 100,000 businesses and expand another 100,000. Aynis Design, pictured above, is one of them (Photo: UNDP Ethiopia)

Aynalem Ayele is a young woman brimming with confidence. “Ayni’s Design”, her small jewelry and clothing design shop situated 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 aiming 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% of workers in the improved MSEs.
  • The UNDP-supported Entrepreneurship Development Programme, is complemented by a Local Economic Development programme that has expanded this year from 7 to 27 cities around to the country to promote inclusive growth and create decent employment opportunities for women and men.

As she reflects on expanding her business, Aynalem says excitedly that “there is one thing that this particular training has helped me understand that other similar courses had not touched upon. That is how you calculate ahead your business risks.”

UNDP provided USD 6 million to the USD 26 million Entrepreneurship Development Programme (EDP) 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."

Now in his late thirties, Girum Tariku joined the same programme after having been forced to file for bankruptcy. Following the training, Girum opened his printing and communication company in June 2013. 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 30,000 Ethiopian Birr, equivalent to around 1,500 USD, now boasts an expanding capital asset of over one million Ethiopian Birr, around 52,000 USD. Girum speaks of one day becoming a major player in the East African private enterprise scene.

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

In addition to financing the scheme, UNDP identified similar programmes in Ghana and brought in trainers from that country in a bid to rapidly transfer knowledge to the participants.

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

“But to succeed maximizing the contemporary opportunities that lend themselves to Ethiopia,” he adds, “crucially we need to connect to the energies of the people, with the entrepreneurial spirit of the people; and we must develop a robust private sector, of which small and medium enterprises will be central.”

The Entrepreneurship Development 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.

Ethiopia is currently implementing the first of a three five-year strategic plan to make it achieve Middle Income Country (MIC) status by 2025 and the country is on track to meet the Millennium Development Goals (MDGs) on halving poverty by 2015.

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

Around one 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% of the beneficiaries of the new jobs being women. Latest official figures place urban unemployment rate at 17.5% while youth unemployment is 23.3%.