BY ABEBE WOLDEGIORGIS
The task of reviving the economy which was hit by COVID 19 and war in the last two years should not be left to the government, the involvement of the private sector is essential. To support the effort, BEHAQ multimedia Private Limited Company and Primer Investment Consultancy PLC launched a project which lasts for five years aiming to support 500 small and medium size enterprises through creating market opportunities in Africa and all over the world.
The enterprises engaged in producing leather, traditional and modern garments, wood and metal products, construction inputs, hand craft, poultry and related activities. Such practice manifests how private sectors support each other with cost sharing which would have been the burden of the government.
According to the Primer Investment Consults Manager Melaku Kinfegebreal, to select the enterprise various methods are employed and among others through getting information from local based quality assurance institution, observing with physical contact where they are located within 170 kilo meters radius of Addis Ababa and scrutinizing through agents, clients and networks from far places where the enterprises are working.
The enterprises products are also identified based on their quality and the demand and potential in penetrating local and foreign markets.
As to Melaku, the project mainly focuses on what the enterprises do in the future.
It is assumed that, they have their own capacity and potential and the project’s role is supporting them to stand by their own, to enhance their capital amount, employment capacity and broad value chain.
The project intends to find market, financial support, facilitate loan and getting machinery in the form of lease.
Andualem Sisay is the manager of BEHAQ multimedia. As to him, the project will be implemented over the coming five years from 2022-2026 GC with a total investment of 3.4 million USD as per the partnership agreement the two companies signed. The selection of the first 500 SMEs engaged in producing high quality products has been carried out jointly by the two companies. The two companies will also jointly work in forging partnerships with the relevant and potential partners from both the private sector and non-private actors. Ethiopian SMEs involved in production of high quality and competitive products will benefit and get exposure to the experience of foreign companies in this regard.
Exploring the enterprises internal capacity and unleashing their potential is the major theme of the project. The public sector to some extent engaged in such practices but not in its full capacity because the government is pre occupied by various burning issues such as restoring peace and stability in various parts of the country, calming insurgents and regulating commodity price, downing inflation and implementing the peace agreement signed with TPLF.
Before the implementation of the project, assessment was conducted with regard to the shortcomings of the enterprises.
Among others, the strength and weakness of their internal structure, their operational system, whether they need additional man power, market opportunities, finance, getting consultancy service or not. Moreover, accessing loan from banks through collateral was evaluated.
By taking in to account these all issues, the project will provide assistance.
Most selected enterprises utilizes locally obtained raw materials as input and best performers have the chance to advance their business and tap the local market opportunities but the main objective of the project is promoting export. In such a way enhancing the nation foreign currency earning capacity and create forward and back ward linkage with other sectors will be realized.
As it is known, export products will face fierce competition with other products relatively produced with better technology in the international market and unless the local enterprises produced standardized products winning the game might be hard.
Asked how far the local industries are prepared themselves for this competition, Melaku told that, one of the objectives of the project is encouraging them to produce quality products. For example, if there is a demand for leather product in the USA market, the product must be produced and exported based on the standard requested in that country. But currently the shortage of capital hampers the industries not to unleash their potential to produce as per the quality required. If they obtain investment from foreign companies and secure money in equity can improve the quality of the products and supply their products both to local and foreign markets.
On the other hand, if there are enterprises specialized in leather products locally will be invited to train others so that the beginners can cop up the required standard.
Exporting of the products to the outside market conducted based on the international agreements that Ethiopia is committed to be abided such as “African Trade Agreement” and COMESSA. But currently the priority agenda is developing confidence on the other countries market.
They have raw materials used as inputs and technology and if they get skill from well experienced enterprises can penetrate the both local and outside markets.
If an enterprise unable to export its products by its own capacity due to shortage of capital, the project assists to export through coordinating with other enterprises and the products can be packed and loaded with one container up to its market destiny.
It is believed that, local enterprises engaged in leather producing have the capacity to compete in other countries where there are no companies which produce leather.
As to Andualem, BEHAQ will also be in charge of distribution of hardcopy branding materials including “the Ethiopian Products Catalog 2022: promising 500 SMEs Looking for Markets, and Investors”.
Following the massive global (365 days) digital marketing campaign, Premier Investment Consults PLC will be in charge of handling all the email, telephone and other social media communications with the interested major dealers, supermarkets, and investors, among others. Premier will also facilitate sending product samples, arranging factory visits and conducting studies, like asset valuation, and other documents required for establishment of joint ventures between SMEs and interested investors
There are sponsors who support the efforts and producers will not be requested to pay when their products are cataloged. But the cost of cataloging is very expensive and the project works as much as possible to realize its objectives. To date, with the support of sponsors thousands of copies of catalogues are printed and illustrated in public organizations, hotels and other public areas locally.
As to Melaku, the very challenge of the project is shortage of capital and as mentioned above without the support of sponsors cataloging the products was not realized and still they need more support in terms of finance and consulting.
The task of the digital cataloging is advertising the products to foreign customers. It also has sample pictures and when the products are preferred by customers the quality status will be certified.
The products will be advertised through various digital media’s and the investor’s data also kept by the project. So far foreign investors showed interest to purchase the products but the small scale enterprises products amount may not be satisfy their demand. There fore, the project planned to combine many enterprises in one so that scale upping the volume of the product will be possible.
Ethiopia is the most populous country in Africa in which 70 percent of it is below the age of 35 and this indicates that providing education and training to the youth must be a priority agenda. Equally important is creating job opportunity for the burgeoning unemployed and to that end small and medium size of enterprises can play pivotal role. In the city and many urban centers SMES are so far could employ hundreds of thousands. But as compared to the job demand they should increase their employing capacity. But currently many enterprises are facing various challenges and among others space for expanding their production activities, market connection and access to finance. The SMES have a potential to penetrate foreign markets which is a gear to garner foreign currency. Therefore, the government together with other stake holders should strive to tackle their problems and move forward.
THE ETHIOPIAN HERALD SUNDAY EDITION 4 DECEMBER 2022
