Business and bureaucracy: Ethiopia entrepreneurs overcome hurdles

Updated 27 September 2015

Business and bureaucracy: Ethiopia entrepreneurs overcome hurdles

ADDIS ABABA: The large open plan office with staff behind sleek computers looks like any newly-started modern business.
But Ethiopia’s first online restaurant delivery service, Deliver Addis, must contend with major hurdles that would stall many entrepreneurs in more developed nations.
Setting up any business is a challenge, but in Ethiopia, those range from daily operating headaches such as on-off Internet — stalling the highly time-sensitive orders on which it depends — to even more fundamental business challenges.
As the country’s banking and payments systems are still in their infancy, electronic payments are impossible, thus creating a huge hurdle for growth.
“The Internet goes out a couple of times a week — when that happens, there is not much we can do but rely on phone lines to take orders,” said Feleg Tsegaye, manager of Deliver Addis.
But he also believes the Horn of Africa nation — the second most populous on the continent — offers enormous opportunities.
Tsegaye was born and brought up in the US but moved to Ethiopia, the homeland of his parents, hoping to tap into a still largely untapped but swiftly growing market he believes is one of the most promising on the continent.
“The IT sector is still in its infancy — typically in these markets there is a way to transfer money very quickly and very easily, but here that doesn’t exist quite yet,” he added.
“Once you have a way for entrepreneurs to make money through technology, I think you are going to see that change very quickly.”
With a growth rate of nearly 10 percent a year over the past decade, according to the World Bank, Ethiopia has attracted entrepreneurs eager to take their cut of a market with over 94 million potential consumers.
The Ethiopian capital Addis Ababa now has three “startup incubators,” some supported by foreign investors, to help Ethiopian entrepreneurs launch their own business.
“Everybody wants to own their own business, everybody wants to create something new,” said Kibrom Tadesse, manager of the XHub, which describes itself as an “open space for IT entrepreneurs, innovators, technologists, investors, tech companies and coders in Ethiopia to develop their tech idea into a product.”
With a large number of youths set to enter the workforce, Ethiopia’s government is keen to develop this potentially large source of new growth and jobs. Ethiopian universities say 70 percent of students are in science programs.
“Even with the rate of unemployment and the amount of people who are coming out educated — and the job opportunities are not matching — there is definitely a lot of room for innovation and entrepreneurship,” Tadesse added.
Yet bureaucracy remains a major hurdle in a country run by former Marxist rebel fighters.
Starting a business in Ethiopia is an obstacle course of paperwork lasting weeks.
The authorities demand businesses have offices, while many entrepreneurs say they would prefer to develop their products shuttling between Internet cafes and home.
“It can take up to six weeks to register a company, and you have to run from office to office — the process is not transparent,” said Florian Manderscheid, manager of Ice Addis, a center supporting young entrepreneurs.
“Most people don’t know where to start.”
Like businesses worldwide, entrepreneurs in Ethiopia also face major challenges in raising cash, with domestic investors hesitant about a still largely unknown sector and tough regulations on outside investors.
“It is very hard to find investors, because there is no venture capital model or legal framework for venture capital,” Manderscheid added.
“Once the banking system opens a little bit, there will be a big boom I think in start-ups and technological development.”
Despite the difficulties, Natnael Zeleke and Amanuel Lemma, students aged 21, are developing an online platform to promote Ethiopian artists.
“Creating a company is not common in Ethiopia, but many students are starting to do it,” said Zeleke.
“You don’t need to be in the Silicon Valley to succeed. If you have a computer and Internet, you can do whatever you want. Even if we’re not in America and have great teachers, we have access to everything thorough the Internet.”
For now, with only a little over one percent of Ethiopians with Internet access, the industry is still in its infancy, but those working here are confident of future success.
“Some people say we are crazy,” Manderscheid said.
“But chances of success are higher than in Europe or the US — small money goes a long way in this growing market.”


Squabbles erupt as G7 leaders open summit in French resort

Updated 25 August 2019

Squabbles erupt as G7 leaders open summit in French resort

  • Disputes on trade, climate may eclipse Macron’s agenda
  • EU’s Tusk warns of lack of global unity, spars with Johnson

BIARRITZ, France: Squabbles erupted among G7 nations on Saturday as their leaders gathered for an annual summit, exposing sharp differences on global trade tensions, Britain’s exit from the EU and how to respond to the fires raging in the Amazon rainforest.
French President Emmanuel Macron, the summit host, planned the three-day meeting in the Atlantic seaside resort of Biarritz as a chance to unite a group of wealthy countries that has struggled in recent years to speak with one voice.
Macron set an agenda for the group — France, Britain, Canada, Germany, Italy, Japan and the United States — that included the defense of democracy, gender equality, education and the environment. He invited Asian, African and Latin American leaders to join them for a global push on these issues.
However, in a bleak assessment of relations between once-close allies, European Council President Donald Tusk said it was getting “increasingly” hard to find common ground.
“This is another G7 summit which will be a difficult test of unity and solidarity of the free world and its leaders,” he told reporters ahead of the meeting. “This may be the last moment to restore our political community.”
US President Donald Trump had brought last year’s G7 summit to an acrimonious end, walking out early from the gathering in Canada and rejecting the final communique.
Trump arrived in France a day after responding to a new round of Chinese tariffs by announcing that Washington would impose an additional 5% duty on some $550 billion worth of Chinese imports, the latest escalation of the tit-for-tat trade war by the world’s two largest economies.
“So far so good,” Trump told reporters as he sat on a seafront terrace with Macron, saying the two leaders had a special relationship. “We’ll accomplish a lot this weekend.”
Macron listed foreign policy issues the two would address, including Libya, Syria and North Korea, and said they shared the objective of preventing Iran from obtaining nuclear weapons.
Trump later wrote on Twitter that lunch with Macron was the best meeting the pair has yet had, and that a meeting with world leaders on Saturday evening also “went very well.”
However, the initial smiles could not disguise the opposing approaches of Trump and Macron to many problems, including the knotty questions of protectionism and tax.
Before his arrival, Trump repeated a threat to tax French wines in retaliation for a new French levy on digital services, which he says unfairly targets US companies.
Two US officials said the Trump delegation was also irked that Macron had skewed the focus of the G7 meeting to “niche issues” at the expense of the global economy, which many leaders worry is slowing sharply and at risk of slipping into recession.
French riot police used water cannons and tear gas on Saturday to disperse anti-capitalism protesters in Bayonne, near Biarritz. A police helicopter circled as protesters taunted lines of police.
The leaders themselves were gathering behind tight security in a waterfront conference venue, the surrounding streets barricaded by police.

Spat over ‘Mr. No Deal’ Brexit
Macron opened the summit with a dinner at the base of a clifftop lighthouse overlooking Biarritz, where a menu of piperade, a Basque vegetable specialty, tuna and French cheeses awaited the leaders.
Adding to the unpredictable dynamic between the G7 leaders are the new realities facing Brexit-bound Britain: dwindling influence in Europe and growing dependency on the United States.
New Prime Minister Boris Johnson will want to strike a balance between not alienating Britain’s European allies and not irritating Trump and possibly jeopardizing future trade ties. Johnson and Trump will hold bilateral talks on Sunday morning.
Johnson and Tusk sparred before the summit over who would be to blame if Britain leaves the EU on Oct. 31 without a withdrawal agreement.
Tusk told reporters he was open to ideas from Johnson on how to avoid a no-deal Brexit when the two men meet.
“I still hope that PM Johnson will not like to go down in history as Mr.No Deal,” said Tusk, who as council president leads the political direction of the 28-nation European Union.
Johnson, who has said since he took office last month that he will take Britain out of the bloc on Oct. 31 regardless of whether a deal can be reached, later retorted that it would be Tusk himself who would carry the mantle if Britain could not secure a new withdrawal agreement.
“I would say to our friends in the EU if they don’t want a no-deal Brexit then we’ve got to get rid of the backstop from the treaty,” Johnson told reporters, referring to the Irish border protocol that would keep the border between Northern Ireland and EU member Ireland open after Brexit.
“If Donald Tusk doesn’t want to go down as Mr.No Deal then I hope that point will be borne in mind by him, too,” Johnson said on his flight to France.
Johnson is trying to persuade EU leaders to drop the backstop from a withdrawal agreement that was negotiated by his predecessor but rejected three times by the British Parliament as the United Kingdom struggles to fulfill a 2016 referendum vote to leave the bloc.

‘Not the way to proceed’
Despite the Brexit tensions, diplomats played down the likelihood of Trump and Johnson joining hands against the rest, citing Britain’s foreign policy alignment with Europe on issues from Iran and trade to climate change.
“There won’t be a G5+2,” one senior G7 diplomat said.
Indeed, Johnson said he would tell Trump to pull back from a trade war that is already destabilising economic growth around the world.
“This is not the way to proceed,” he said. “Apart from everything else, those who support the tariffs are at risk of incurring the blame for the downturn in the global economy, irrespective of whether or not that is true.”
Anti-summit protests have become common, and on Saturday thousands of anti-globalization activists, Basque separatists and “yellow vest” protesters marched peacefully across France’s border with Spain to demand action from the leaders.
“It’s more money for the rich and nothing for the poor,” said Alain Missana, an electrician wearing a yellow vest — symbol of anti-government protests that have rattled France for months.
EU leaders piled pressure on Friday on Brazilian President Jair Bolsonaro over fires raging in the Amazon rainforest.
Even so, Britain and Germany were at odds with Macron’s decision to pressure Brazil by blocking a trade deal between the EU and the Mercosur group of Brazil, Argentina, Uruguay and Paraguay.
A spokesman for German Chancellor Angela Merkel said not concluding the trade deal was “not the appropriate answer to what is happening in Brazil now.”
The UK’s Johnson appeared to disagree with Macron on how to respond. “There are all sorts of people who will take any excuse at all to interfere with trade and to frustrate trade deals and I don’t want to see that,” he said.