Ethiopia looks to young technocrats to lead ambitious reform drive

By (Tom Wilson)

Prime Minister Abiy Ahmed has broken with tradition in Ethiopia by appointing young technocrats with international experience to important economic jobs as he seeks to turn the country’s tightly controlled, state-led economy into a competitive free market powered by private capital.

The officials, including Eyob Tolina at the finance ministry, Abebe Abebayehu at the investment commission and Mamo Mihretu in the prime minister’s office, are leading the most ambitious aspects of Mr Abiy’s promised reforms, investors said.

Since taking office a year ago, the reformist leader has promised to overhaul the Ethiopian economy and open previously blocked sectors, such as telecoms and energy, to foreign investment.

To succeed, his youthful appointees must push through reforms to Ethiopia’s sprawling bureaucracy and navigate conservative political officials in the ruling coalition, many of whom remain suspicious of relinquishing too much control of the economy after 28 years of state-led growth.

For Mr Eyob, a former private equity executive and now state minister at the ministry of finance, the ruling party has no choice but to evolve. “We had public-led economic growth and it did run its course, it was obvious,” Mr Eyob told the Financial Times in an interview in Addis Ababa.

“If you didn’t make some pragmatic decisions and shift the course, it would have been a full-blown crisis so you needed to avert that.” In 2016 and 2017, thousands of Ethiopians poured on to the streets, many of them frustrated by the lack of employment generated by an economic policy that had favoured infrastructure over job creation.

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At the same time, Ethiopia was facing a fast-approaching debt crunch. Much of the economy’s double-digit growth in the past decade was driven by borrowing — largely from China. Although Ethiopia’s debt was low as a percentage of gross domestic product, compared with regional averages, its ability to service that debt with export revenue had become precarious, the IMF said in December.

In response Mr Abiy halted all non-concessional borrowing. “There was a need to pause, to finish what we already had, not to jump into new projects,” Mr Eyob explained. Having stemmed the bleeding, the focus in the next fiscal year would shift to attracting investment and boosting revenues, he said.

The first step is a privatisation programme, headed by Mr Eyob, which will include the sale of what is likely to be a large minority stake in Ethio Telecom, the state-owned mobile operator. Mooted ever since Mr Abiy took office, Mr Eyob rejected suggestions the telecoms sale was already behind schedule.

The government had undertaken a detailed market study, including researching regulators in 25 countries to understand the best model for Ethiopia, he said. The “fully-fledged process” would start in no more than a month, he said.

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Mr Abebe, commissioner at the Ethiopian investment agency, said the prime minister had commissioned similar studies for the energy, rail, industrial parks and logistics sectors to identify how best to sustain growth, boost export revenues and create jobs.

“[Mr Abiy] is extremely interested to see a strong private sector that can generate jobs for the millions of youths that are currently unemployed,” said Mr Abebe, 38, who worked at the World Bank before Mr Abiy asked him to join the commission. “And I think that is consistent with the whole economic reform agenda.

For so long economic growth has been fuelled by state investment and now the state should cede space to the private sector and play its natural arbiter role as a regulator,” he said. “In a country where almost 70 per cent of the population is youth, it is only fitting that the administration reflects that age group,” he added.

For some Ethiopians, the talk of private enterprise is an abrupt departure from the developmental state envisioned by its architect, former prime minister Meles Zenawi, where the government controlled the economy’s commanding heights.

But other observers say the shift is subtler. Cepheus Capital, an Addis-Ababa based private equity firm, argued that, as it was under Meles, the government would still prioritise growth and was likely to continue to take an interventionist approach on issues related to land, industry and finance.

The objectives for policymakers were expected to remain the same and it was the “tools” and timeframes that were being modified, Cepheus said in a recent report. “We see economic policy shifting its attention in three areas — from public to private activities, from capital to current spending, and from debt to equity,” the report said.

Mr Eyob said those changes were imperative to creating the jobs the Ethiopia population craved. Ethiopia’s population has doubled since 1992 to at least 105m, according to the World Bank, and is expected to reach 190m in 2050, by some estimates.

About 25 per cent of those aged 15 to 29 are already underemployed “I am not worried at all, especially with this reform and the right thinking,” said Mr Eyob. “We have significant assets, and as we open up, and as more private sector investment comes, this country can achieve a major breakthrough.”


AU’s Pan African Youth Forum Launches ‘1 Million by 2021 Initiative’

By Lionel Tarumbwa

With 75% of its population under the age of 35, the African Union has to realise Africa’s demographic dividend may be more important to its future than its natural resources.

The second edition of the African Union’s Pan African Youth Forum is kicking off on Tuesday in Addis Ababa, Ethiopia. The forum will be running under the theme Africa Unite for Youth: Bridging the Gap and Reaching African Youth.

The forum is aimed at leveraging and harnessing on the power of the continent’s growing youth population. It represents a paradigm shift in the AU as it moves towards broader recognition and support of the continent’s youth in order to harness their potential.

The forum brings together over 400 young people from across the continent to co-create solutions on the main problem areas that are hindering the youth from achieving their potential. Development partners, the private sector, institutions of higher learning and the civil societies will also be in attendance as part of the aim to have a broader engagement with all stakeholders.

The chairperson of the African Union Commission (AUC) Moussa Faki Mahamat will officially launch the 1 million by 2021 Initiative, which targets direct investment in millions of African youth on the four key elements of employment, entrepreneurship, education and engagement (4Es).

Africa is expected to experience a demographic dividend as young people make up the bulk of Africa’s total population, with an estimated 75% of the continent’s population below the age of 35. The demographic dividend has been acknowledged by African leaders and decision-makers as a strategic basis for focusing and prioritising investments. Investments into Africa’s youth will contribute towards sustainable development, inclusive economic growth and to build an integrated, prosperous and peaceful Africa.

For African countries to capitalize on this demographic dividend, the future workforce must be educated, trained, and have adequate employment and innovation opportunities. Putting all the pieces in place will not be easy.

This will be achieved by building capacity for quality education and skills improvement, health and wellbeing, good governance, human rights and accountability, employment opportunities, leadership skills, empowerment and entrepreneurship. This is the basis for prioritising youth development by the AUC, as evidenced by the 2017 theme of the year: Harnessing the Demographic Dividend through Investments in Youth.

In data gathered by the Ibrahim Index of Africa Governance over a decade, there were reflections that African governments are in danger of squandering the continent’s demographic dividend by failing to create enough jobs.

Mo Ibrahim, the Sudanese businessman whose foundation produces the index, said, “Our gross domestic product has grown by a considerable amount over the past 10 years, but we haven’t translated that into a sustainable economic opportunity.”

According to a report by Brookings on Increasing Employment Opportunities in Africa’s complex job market, even some of Africa’s largest economies such as Nigeria, Kenya and South Africa struggle with high unemployment. This is a challenge that may persist as more youth begin to enter the workforce if not more investments are made into education and skills creation. The report by Brookings noted that investments into “human capital” more generally will help African countries to fulfil their broader development missions.

The AU Commission launching the 1 million by 2021 Initiative demonstrates a focused commitment on young Africans. The main objective of the initiative is to concretely provide opportunities in the 4Es for millions of African youths by the year 2021.

Source The African Exponent

Meet The Youngest Tech Pioneer in Ethiopia

By Thomas Lewton

Ethiopia, despite nearly 20 years of steady economic growth, still has one of the lowest GDPs per capital in the world. While the majority of the country contributes to its agriculture-based economy, growing sectors of tech-savvy youths are forging a new path.

And Ethiopia isn’t alone. As start-up hubs sprout all across Kenya, Nigeria, South Africa and Ghana – often backed by A-list investors – a new generation is turning its attention toward innovation. The idea is simple: create local solutions to local problems through tech.

Betelhem Dessie, 19, is one of the youngest tech pioneers in Ethiopia. Over the last three years, in addition to patenting several software programs, she has travelled the country teaching students how to code and conducting innovation workshops. So far, she has reached more than 20,000 young people.

“In developed countries, technology is creating a comfort or a convenience.” she says. “Whereas in Ethiopia it’s creating a necessity.”

Source BBC

Mekele Set To Provide Jobs For 23,000 Youth in Ethiopia

Featured photo credit: SOS Youth Facilities

Mekele, the Capital of Tigray Region of Ethiopia provides land for investors who are set to create jobs for 22,900 youth.

The 222 investors who secured the land have registered a total capital of 13.6 billion birr (about $483 million). The investors who secured land from Mekele City Administration on Saturday will be engaged in manufacturing and service sectors, according to Fana Broadcasting.

Increasing Mekele City Administration has been providing land after evaluating investment proposals of the investors.

The report indicated that Dr. Debretision Gebremichael, Deputy Head of Tigray Region said that when more investment comes to the region, more youth will get jobs.

In recent years youth unemployment in Ethiopia has been a major concern. For some cities the unemployment rate is estimated to reach up to 30% though the official data says that the national unemployment rate is around 24%.

The growing rural to urban migration and the imbalance between the number of graduates coming from schools every year and the number of jobs the country is providing, have increased the unemployment rate in cities including Mekele.

The December 2016 report of the World Bank on employment in Ethiopia suggested that the government needs to address major obstacles in the labor market to enable the country accelerate structural transformation, ensure inclusive growth and lead to poverty reduction.

Entitled, ‘5th Ethiopia economic update: why so idle? – wages and employment in a crowded labor market, World Bank’s report offers five policy recommendations to enhance urban labor markets:

– encourage firm creation and firm growth that creates jobs for non-graduates;

– increase labor productivity in the low-skill population segment by addressing constraints faced by firms in accessing capital (financial and physical) to ensure that the marginal product of labor increases above the nutrition-based wage;

– invest further in job training and technical training programs to build the skills of those in the job market: both for low-skilled workers to increase their productivity and for those with higher levels of education to increase their skill base;

– introduce targeted urban safety nets and labor market programs to invest in skills of low skilled employees and the unemployed, and provide financial support to enable their job search;

– enhance the use of information communication and technology (ICT) to provide information on job vacancies throughout the city and reduce the cost of job search.

Source New Business Ethiopia

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Ethiopia Bans Alcohol Commercials on Media to Protect Children and Youth


Ethiopians Parliament on Wednesday has passed a new law that bans alcohol commercials on broadcast media.

The new law aims to protect children and the youth from being seduced by the commercials of liquor and become addicted and unproductive. It also plans to address the consequences of alcohol consumption on the health of individuals and over economy.

Reports show that most of drunkard drivers are among the causes of road traffic accidents in Ethiopia, which cost the country about 5,000 lives and millions of dollars property damage every year.

In Ethiopia liquor manufacturers and importers including beer factories have been major sponsors of broadcast programs. To minimize the impact of the ban on the income of the broadcast media, which are also significant in democratization of Ethiopia, government institutions should figure out how to work with the broadcasters for better good causes, according to the Minister of Health of Ethiopia Dr. Amir.

“…But as Minister of Health and my mandate, no matter what the consequence I support efforts to protect the health of the public,” he told Sheger FM this morning.

Primarily the draft law was suggesting transmission of alcohol adverts after the children sleep – after 9:PM. Meanwhile during the later discussions and public hearings, it is decided that alcohol advertisements have to be banned. Finally the 547 members parliament banned the commercials on broadcast media by over 400 majority votes.

The new law, which aims to protect the health of the public also involves articles related to tobacco and drug uses, among others.

Currently there are two wineries and several breweries while dozens of companies are engaged in import and distributions of liquors.

Source New Business Ethiopia

Ethiopia: Employment sought for Sri Lankan youth in African continent

Employment has been sought for Sri Lankan youth in the African continent.

The Embassy of Sri Lanka in Ethiopia celebrated the 71st Anniversary of National Day of Sri Lanka with the Addis Ababa based Diplomats, senior officials of the Ethiopian Government and the African Union Commission, Ethiopian entrepreneurs and members of the Sri Lankan community, at the Sri Lanka House.

The official ceremony commenced with the hoisting of the national flag by Ambassador Sumith Dassanayake followed by singing of national anthems of Sri Lanka and Ethiopia, observing two minutes of silence in remembrance of national heroes and lighting of traditional oil lamp by the invited guests, the Embassy of Sri Lanka in Ethiopia said.

The National Day messages of the President, Prime Minister and Minister of Foreign Affairs were read out in Sinhala, Tamil and English languages.

Addressing the gathering, Ambassador of Sri Lanka to Ethiopia and Permanent Representative to the African Union Commission Sumith Dassanayake outlined the significant achievements of Sri Lanka since independence and requested the Diplomatic Corps and other foreign guests to make use of the opportunities available in Sri Lanka in the fields of trade, tourism and foreign investment etc.

The Ambassador also acknowledged the positive contributions made by the Sri Lankan expatriate community in Ethiopia and Africa for economic development in Sri Lanka. He also requested them to contribute further and find more employment opportunities for Sri Lankan youths in the African continent.

At the end, a short video featuring Sri Lanka’s tourist and cultural attractions was screened to the audience.

Source MenaFM