BY LEULSEGED WORKU
Small and Medium Scale Enterprises (SMEs) are long recognized as development engines for they are important vehicles to address the challenges of unemployment, alleviate poverty, accelerate economic growth and promote fair distribution of resource and economic diversification.
Owing to this, Small and Medium Enterprises has become one of development programs of developing countries and where the Ethiopian Government has given special attention to drive rapid economic growth through job creation, acceleration of structural transformation to industrialization so as to realize nation’s development vision.
As a consequence, the government has been promoting the development of SMEs through the formulation of different policies and strategies and organizing SMEs support agencies.
As part of its efforts and to make the enterprises effective, the government has also been facilitating loans and provision of working areas to those citizens who organize themselves and aspire to commence businesses. This is especially true in Addis Ababa and other towns where social challenges are acute.
Accordingly, many youth and women centered SMEs have been set up and flourished across the country.
As various studies indicate and our recent experiences show, the introduction of SMEs has created job opportunities for several Ethiopians and improves the lives of many, particularly the youths and women, for the better.
In the same way, the enterprises have also contributed a lot for country’s socioeconomic development serving as an input in terms of both generating skilled manpower and supplying semi processed product to the manufacturing and construction sectors.
In similar fashion, the establishment of lot enterprises on the manufacturing, construction and other sectors have played key role in curbing urban unemployment. The construction sector in general and industrial parks and housing programs in particular, avail the opportunity to huge number of labor force with varied skills and qualification to engage in different activities.
The contribution of those enterprises in terms of lessening social challenges was obvious. This is especially true in the area of job creation and government’s Integrated Housing Development Program (IHDP), which is one government’s initiative to build residential units, create jobs and support up to 10,000 micro and small enterprises to enhance the capacity of the construction industry.
Needless to say that housing problem is one of the serious challenges of Ethiopians living in urban areas (especially in the capital, Addis Ababa). As a means to overcome this challenge, the government has developed and is implementing IHDP.
Using this program, several houses (condos) are constructed; and hundreds of thousands of people have become beneficiaries though a number of shortcomings are witnessed in the implementation process and the initiative is unfeasible in rural areas because the need for condos is lower in rural part of the country compared to the demand in urban areas.
Whatever, the case, the contribution of MSEs has been crucial in terms of supplying processed housing materials plus directly taking part in the construction activities.
Truly speaking, this does not mean that all the paths for members of MSEs were smooth and without any challenges. Rather they have been encountering numerous challenges and ups and downs.
According to a research paper done by Habtamu Tezera, under the title, ‘Challenges and Opportunities of Small and Medium Scale Enterprises (SMEs) in Addis Ababa (The Case of Arada Sub City)’ the enterprises have been facing a number of challenges such as shortage of working capital, market linkage, unavailability of working shades, lack of transparency among SMEs office at the time of allocating the working place and the like problems. Especially, absence of strong chain between the manufacturing sector and the SMEs is a serious challenge.
Apart from that, poor production quality (product defects) is also the other challenge of the enterprises. This is witnessed clearly in the construction sector and can be cited as a good example.
Lack of market opportunities for all enterprises is still the major setback though the government is working persistently to alleviate the problem through making linkages with private investors, universities and other stakeholders as well as organizing and staging products in bazaars and exhibitions as they are very important to confer with local and foreign producers, retailers, agencies and entrepreneurs.
As it is known, the issue of Small and Medium Enterprises development ranked first among the priorities of socio-economic development, given the growing need for employment creation and poverty alleviation. Though the government has strived to generate jobs and the sector paved the way for developing new culture of entrepreneurship, the sector was not free from the challenge of rent seeking.
What is more, corruption related issues have also made the process difficult. What is more, the price of the house was so expensive that, it was only few people could afford it. As a means to overcome challenges (quality, price and affordability) the government has taken several measures.
This includes construction of cost effective houses, taking necessary measure in area of quality related issue and constructing condos that reflect the culture of a particular society is a good indication.
The Ethiopiam Herald March 17/2021
