Thursday, 26 February 2015

GETTING TO KNOW ETHIOPIA FOR BUSINESS!

















Growth Potential

Ethiopia continues to be one of the fastest growing economies in the world expanding by a double digit annual economic growth over the past decade. This achievement is attributable to large natural resources base, an abundant human resource and hence cheap labor, a large market size with a population of rising income, fairly good infrastructure, decent economic policy direction and committed government. These resources and high level of engagements will continue to drive the economic growth and now is the time to get to know Ethiopia and put a foot hold for business.

For now, I would like to give you a simple and generalized overview of the Ethiopian businesses and the local culture as a whole for you to consider it in any of your engagements.


Low living cost and high security

The low living cost and high level of security is a wow incentive for international expertise. If the poverty bench mark, 1.25 USD a day, makes a difference, it is in Ethiopia really.

If someone tries to study more closely, s/he will find out that Ethiopia is the most stable country in the most volatile region. The risk for business arising from insecurity is almost non-existence.

A friend of mine once told me that he met a man who used to live in some parts of Africa. When they were walking together on a road side, the man, holding his bag at his back, turned his head sideways almost frequently. Surprised with his action, my friend inquired why the man was doing that swing every time. The man replied, saying that ” because of the large extent of theft, robbery and even killing in the country he used to live, he has to watch every direction while having a walk and his body is conditioned forever” even if he doesn't have a problem in Ethiopia or anywhere else. This has never been the case in Ethiopia and Ethiopians are actually proud of that.

Calendar and time

The Ethiopian calendar may be a bit confusing for a stranger to the country which is basically a Julian calendar. You may likely see double year calendar on fiscal years in the form of 2013/2014, for example. Ethiopia uses its own calendar for its fiscal budget extending from 8 July to 7 June 7 or 8 years behind the Gregorian calendar. When international parties try to convert Ethiopia’s fiscal year to their system, they adopted the double calendar to make their economic analysis convenient.

Ethiopia celebrates its own public holidays. If you are an international party who wish to establish some kind of business/other operation with mixed staff, you need to consider paid leaves for your employees, one for the locals and one for the expats or both.

Time is also an issue someone should pay attention to if s/he is in Ethiopia. Ethiopia has been isolated for a while in business terms both on regional and global stage. Global companies are eying the Ethiopian market starting only recently. So, the people are not used to the international time. If somebody has an appointment with an Ethiopian in Ethiopia he needs to make sure that they are on the same page.

Weather Condition

Although Ethiopian weather condition is ideal most of the time, it varies within few kilo meters of distance. The national motto of 13 months of sun shine sometimes confused outsiders who pay a short visit to Addis Ababa, the capital, during the continuous rainy season in the middle of July but it is still a valid motto considering the whole of the country at all times.

Source of information

National institutions that should fabricate and supply first hand, scientific, synthesized and current data are either at infant stages or not yet build credibility. Due to that, most of the information available is taken from outside sources which are most likely susceptible to overlooking and or exaggeration mainly because of misunderstanding of the local culture.

To the surprise of many, the west’s media prefers to see the half empty glass in their coverage of Ethiopia most of the time. They commercially negatively represented the nation for many years which kept business people away until very recently.

I do have a habit of asking new comers to Ethiopia to know their expectations and what they really find in Ethiopia, and hundred percent of the time, I found out that Ethiopia is beyond their expectation and sometimes they realized that most of the negatives they were told about Ethiopia were wrong at all. For anyone, who wish to come to Ethiopia be it to pay a short visit or to do a long term business, I strongly suggest to look for and learn from somebody who has been in Ethiopia at least for a while.

Culture and doing business

Culturally, Ethiopians are dubbed as hospitable as and as friendly as they should be in treating and accommodating guests in their homes and country.

When it comes to customer service in businesses, however, I often hear and see complaints of dissatisfaction mainly by foreigners. Although there are cultural sensitivity differences such as time, generally speaking, the serving staff in Ethiopia has a long way to go to uncover the implications of poor service to the business particularly to the commercial one.

Ethiopians as youngsters used to be discouraged to speak about themselves and in front of their elders which does not have a place in today’s business environment any more. For an Ethiopian man, he doesn't speak not necessarily mean he does not know something. It is just his culture. Genuinely promoting self and the country as a whole should be a culture from now on. Although it looked changing, the legacy of the bringing up of the old generation exacerbated by the low level of education and training has contributed much to the low level of service.

Philip Briggs, a travel writer, between the lines of his Bradt travel guide book, expressed Ethiopia as “culturally, historically and scenically the most extraordinary country“ he has ever visited.

If so, why not in business! Proper documentation; avoiding negligence and procrastination; leveraging the technology; collecting feedbacks and acting on the abnormalities; continuous coaching and training; delegating responsibilities instead of holding all and getting stuck in the middle; providing competitive incentives for excellence based on merit; timely reforming the barriers and strengthening the regulating environment will help the businesses thrive in the midst of tough competitive world, in my humblest opinion.

By the World Bank’s doing business 2015 report measure, Ethiopia ranks 132 out of 189 economies ten points ahead of the sub-Sahara African average. With the same report, the country scored 56 points out of 100 with the distance to frontier, comparator economies rank, standing fourth following South Africa, Rwanda and Egypt in Africa. The report’s rank being a result of average of indicators, lowers the overall rank of Ethiopia but it is not a bad place to do business in many of the doing business indicators when compared to the rest of the economies in Africa. The doing business report explicitly suggested that a lot has to be improved to be competitive on the international stage and to make room for flourishing entrepreneurs. Among the criteria taken in doing business, access to credit is one of the lowest ranks which need immediate attention.

I think businesses in Ethiopia need to apply beyond the golden rule, treat others the way you want to be treated, if they have to make a difference in the competitive market. It doesn't matter if they are running a small shop, a restaurant or a big corporation. The most important factor is acquiring the business culture for satisfactory customer service that is currently lacking in the Ethiopian businesses.

For a stranger to the Ethiopian market, it is worthwhile to watch out that part of the business more seriously both to make a very good business on the one hand and to remain calm on the other hand until the circumstances change for the better. 



Tigabu Atalo

Power and Energy Practitioner, and
Experienced Projects Manager


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