BY TEWODROS KASSA
Different researches have shown the importance of promoting youths and women entrepreneurship to realize the overall national development. Promoting successful youth and women entrepreneurs enables employing a large number of labor forces and improving citizens’ life.
The Ethiopian government has been providing various supports to youths and women to encourage them engage in productive jobs; and the Ministry of Labor and Skills (MoLS) has been organized in such a manner- so as to cultivate an industrious society. However, several youths are facing financial constraint, skill gaps, lack of working space, among others to start their own business and support themselves and their family.
Recently, the Ministry of Labor and Skills (MoLS) announced that it is working to narrow the financing gap of Micro, Small and Medium Enterprises (MSMEs) with the help of the National Credit Guarantee Scheme (CGS).
Speaking at a recent consultative forum organized by the ministry in partnership with Master Card Foundation and First Consult on the feasibility of establishing CGS, MoLS State Minister Nigussu Tilahun said that the ministry has been taking various initiatives to address the financing gaps of MSMEs by the government, development partners and actors of the private sector.
As to him, the establishment of a CGS could be a game-changer for MSMEs financing as it has the potential to unlock a significant amount of capital for enterprises. In Ethiopia, the financing gap is particularly pronounced, with many MSMEs struggling to obtain the finance they need to succeed. Only a small fraction of MSMEs have access to formal financing leaving many struggling to grow their businesses or even survive.
Moreover, MSMEs are highly constrained by different factors such as limited markets, inadequate access to technology, weak infrastructures, lack of business skills and most critically limited access to credit, which compromises their growth and development despite their immense potential to bring about substantial changes.
“The government had been taking measures and supporting the youth through availing a revolving fund so far. However, the initiative could not address the financing gap of MSMEs at the desired level due to various reasons; including poor financial management intentionally or unintentionally, inappropriate attitude of beneficiaries, absence of monitoring systems and poor governance,” he said.
First Consult Company Representative Getachew Mekonnen said that the company has been working closely with the financial sector to support access to finance viable enterprises in Ethiopia and develop a sustainable and inclusive financial system.
Getachew further stated that CGS also contributes a lot to the formalization of the informal sector and improves financial inclusion, which is critical for sustainable economic development. The government of Ethiopia is working to create 14 million jobs by 2025.
“We have provided enterprises with over 16 billion Birr credit; and more 700,000 jobs were created,” Getachew added. As to him, lack of access to finance, difficulty of getting credit guarantees, lack of liquidity and other issues have been identified as the main challenges attributed to hindering the enterprises growth as the major obstacles, and Ethiopia ranks 176 out of 190 countries in this respect.
On the other hand, the ministry announced that it has offered training for over 163,000 citizens that will enable them to work legally in overseas. MoLS Public Relation Director Abebe Alemu told The Ethiopian Herald that the training enables Ethiopian employees to have some type of know-how and meet certain requirements in terms of knowledge, skill and language of the host country before allowing them to leave.
The training also aimed at ensuring the rights and benefits of Ethiopian domestic workers and satisfying the needs of foreign employers by sending skilled labor. According to him, the training offered to citizens who want to travel to foreign countries include housekeeping, caregiving, Arabic language as well as other essential job skills.
Stating the agreement reached with Saudi Arabia in the issue, the director indicated that the agreement with the Kingdom is very essential for Ethiopia. “Ethiopia is also ready to send skilled labor to other countries including Bahrain, Oman, Italy, Jordan, Germany and Japan.
Since last month, some 77 institutions have been offering training to citizens who want to work in Arab nations; which are believed to change the working situation of Ethiopian citizens in the Middle East in terms of fair salary and protection from violent acts. Abebe further stated that the ministry has set a plan to create 3.7 million jobs at the national level. While the ministry plans to employ 3.6 million citizens locally, the rest intends to be recruited by foreign firms.
The government attaches due emphasis to send skilled labor and reach agreements with labor-hiring countries that require them to give guarantees for safety of Ethiopian domestic workers in workplaces and to respect their rights.
The ministry developed a digital system that registered 600 agencies and more than 13,000 employees. It has also been undertaking wide ranging activities that can make repatriates work and prosper in their home country. Accordingly, various jobs were created for over 11,800 Ethiopians repatriated from Arab countries. More efforts are also underway to include others to change their livelihood through working at home, he elaborated. It is recalled that Ethiopia made known that in this Ethiopian budget year will send 500,000 females to work in Arab countries, particularly Saudi Arabia.
The Ethiopian Herald April 14/2023
