Way out for addressing
the foreign currency crunch
BY ABEBE WOLDEGIORGIS
The African Trusted Partners is none governmental organization working on resolving the shortage of hard currency in Ethiopia through encouraging the inflow of investment. It was established 16 years ago and has a vision “to be reliable company for attaining permanent growth”. It is dedicated to attracting foreign investment to Ethiopia.
In addition to these, it works to encourage Ethiopian businessmen to export their products to the foreign market that are eligible both qualitatively and quantitatively. It also provides information to the businessmen with regard to new market destinations to their products.
To that end, it prepares conferences here in Ethiopia and in the overseas with regard to investments.
Aklile Belete is the Organizer and Executive Director of the African Trusted Partners. As to him, Ethiopia has a potential to attract foreign investment in various sectors and among others, in tourism, hotels and entertainment as well as manufacturing and agriculture.
He further said that, the government created enabling environment to attract Foreign Direct Investment and to that end, it introduced new laws conducive to investors, provide incentives, land in fair price, provides tax holiday to investors. Moreover, it established industrial parks with the necessary services such as banking and internet.
On the other hand, according to Aklile, if they are prepared in a qualified manner, Ethiopian products can be competent in the foreign markets and enable to boost export and garner foreign currency. Both foreign and local investors can play crucial role in this regard.
Asked why he and his company showed interest in attracting foreign investment here and what he planned in this regard, he said that mainly his company works on preparing trade events.
He also said that there are various workshops to be conducted by the year 2023 at the international level. It is already announced that the workshops will benefit Ethiopian and foreign businessmen engaged in the industry sector and in export at the international level. The government also will benefit from the events. He further said that the company has been engaging in such venture for the last 16 years and broaden its network throughout the world and created partners in 18 countries. Some of the partners are government offices.
For example, the organization works with the Netherlands Trade Commission. It also works with embassies and trade and businessmen working in similar schemes. As a result, realizing attracting investment in various fields has been possible. Through utilizing the networks created previously, attracting more foreign investors is achieved.
According to reports from the Ethiopian Commodity Exchange Authority, due to various reasons the number of Ethiopian exporters’ partners in other countries is declining which in turn affects the nation’s foreign currency earning capacity. Asked whether his organization is working to mitigate the problems or not, he said that his organization has rich experiences in creating partners in the overseas world and it is expanding. The technology that his organization introduced enables to continue connection with the foreign world and such a situation created good opportunities to the local companies engaged in various investment ventures.
The opportunities enabled to foster foreign trade and open the door for trading with foreign customers and they are working on it. The other thing is that it brought technologies here from abroad which in turn enabled local investors to work with foreign companies as a partner. The newly introduced project financing scheme also brought other opportunity. The project financing work started in Canada, South Africa and Netherlands.
The projects are financed by private investors and government bodies and they finance both for the public and private enterprises. They finance projects that worth 10 to 100 million Dollars. As it is known, the fundamental problem the nation currently faces is shortage of hard currency which hampered various project activities. Hence, the ongoing effort is expected to address the problems.
As to Aklile, project financing will be started in financing infrastructure and followed by agriculture, agro-processing, real estates, hotel and tourism.
In the agricultural projects women will be given grants. Asked by what mechanism the organization informs businessmen the created opportunities, Aklile said that various advertising schemes will be conducted and in the near future, an event called by its name “Trade investment Africa” which takes place in South Africa that lasts for 15 days will be conducted.
In the occasion, the Ministry of Trade, the Leather Development Industry Institute and other investors engaged in foreign trade will be part of the event. Various study papers will be presented by experts and intellectuals and the next program will be held in Amsterdam, Netherlands. The event is named as “Invest in Africa” and 37 African countries’ business representatives will attend the event. The event will create opportunities to attract investment to Ethiopia. Particularly, opportunities will be created to the new businessmen and women who joined the sector recently.
The other festival will be conducted in Canada Ontario. This event focuses on the exchange of cultural assets and music performance. In addition to these, enabling environment will be created to Acquaint with the North American Businessmen and to conduct trade. Particularly, job opportunity will be created to coffee traders and farmers.
The other event will take place in USA. The event will be organized with the cooperation of the African Bren Bank. The Bank is established to exploit the Africans cumulative knowledge and owned by African Americans Billionaires. The event will open opportunity to Ethiopia. The last event is known as “Fintex Addis” will be organized in Addis Ababa.
The event focuses on promoting furniture production, internal design and finishing and both local and foreign investors will participate in the event. As it is known, submitting feasible project is vital to secure financial support and it is a weakness of many Ethiopians. When asked how solution can be forwarded in this regard, Aklile said that to resolve the problem, his organization crafted four projects but they need more revision and additional preparation to secure loan. In addition to that, the consultation services will be provided to investors so that they could secure fund.
However, if companies bring viable project ideas they can easily secure grants and if they need support the department in his organization working in the strategic project development will support them. As to Aklile, Chambers of commerce and government are the major partners of his organization in Ethiopia.
As it is understood, the major weakness of the Ethiopian export sector is inefficiency in exporting commodities with standardized manner by keeping the quality of products and while asked what his organization’s intervention is; Aklile said that the main problem is that exporting the product by keeping its quality and enhancing the quantity. Most of the time foreign consumers showed interest to purchase Ethiopian products in huge amount but the supply is in this regard short. And it must be changed to the better.
Recently, the government began to pay high attention to the agriculture sector and hopefully in such manner increasing the quantity of the export products will be realized. He further said that to boost export, his organization will support exporters through providing study outcomes and crafting projects and networking, working on knowledge transfer and attracting foreign investors. The events and workshops that are going to be conducted in the USA and Canada will be conducted here other time. The event that is going to be taking place in South Africa also will take place here in Ethiopia next year. The event which takes place in Canada also will be conducted in three African countries. In line with this, foreign investors will be invited to invest here.
As mentioned above, Ethiopia is critically facing the impact of foreign currency crunch. Most projects are interrupted due to unable to import inputs. Manufacturing sector, for instance, is forced to produce below the average due to lack of spare parts. Ethiopian commodities go to the neighboring countries due to rampant illegal trade which in turn aggravates shortage of hard currency. Therefore, to mitigate the problem immediate action should be taken, it was underlined.
The Ethiopian herald May 21/2023
