The Arduous Walk: Marathon Motor Engineering by Abyssinia Business Network / ABN /

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WE MOVE IT ALL

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Editorial Team MANAGING DIRECTOR Daniel Tiruneh

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EDITORIAL

Edi

Battling Vicious Adversary

It seems that the Ethiopian government has responded swiftly and successfully in tackling both the health and economic crises presented by the pandemic. This problem, however, is different from any the country or the world has faced in recent times. There have to be some interventions the Ethiopian government and its partners can take to address some of these issues. Most African countries, including Ethiopia, do not have the fiscal muscle to provide a social safety net for their citizens in the same way that developed countries have been doing. While Ethiopia is providing food and shelter to protect the most vulnerable, the government must further expand food assistance and social protection programs for its most vulnerable populations. It has been encouraging to see the private sector and citizenry participate in supporting those less fortunate in their communities. While liquidity has been made available to the banks, the impact of such measures can only be assessed in terms of their positive effects

on the businesses they were intended to reach. As investment in and by the private sector has slowed, now would be a good time for increased public sector investment to keep the economy running and mitigate drastic job loss. It is also critical to engage and encourage private sector creditors to participate in debt relief efforts. The government has made some progress in the telecom sector during the pandemic, particularly in digital payments. Recently proposed laws would allow non-financial institutions into the financial services sector for the first time, including telecommunications giant and state-controlled monopoly Ethio Telecom. The government should press ahead in these efforts to bring about muchneeded investment, job growth, critical revenue in the government treasury, and much-anticipated mobile money efficiencies for customers. There does not yet seem to be international political support for an outright Highly Indebted Poor Countries (HIPIC)-like debt relief at the moment. Donor governments such as Canada, China, France, the United Kingdom, the United States, and others should support immediate debt moratorium for 2020 and 2021 so that countries like Ethiopia can use their limited resources to expand social protection for their citizens. As Ethiopian Prime Minister Abiy Ahmed (PHD) penned an eloquent in the Financial Times pleading to the international community on behalf of the African continent on the need for global coordination efforts, “We can defeat this invisible and vicious adversary-but only with global leadership. Without that, Africa may suffer the worst, yet it will not be the last. We are all in this together, and we must work together to the end.” He is right: we are all in this together. Abyssinia Business Network / ABN / 2022

Aklile Tsige

Editor-In-Chief

Aklile Tsige is a journalist, a documentary script writer, director and narrator, movie subtitlemaker and Aviation English Language Rater. His work has earned him numerous recognitions and certificates from various film production companies in the country. Currently Aklile is engaged in freelance writing for different media houses, and also serves as Editor-in-Chief for Abyssinia Business Network/ABN/. He has studied English Language and Literature for his under graduate study and Journalism and Communications,Graduate School of Journalism and Communications Addis Ababa University.

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A F R I C A Getting Image 06

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AU 35th

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Summit

The African Union (AU) is a continental union consisting of 55 member states located on the continent of Africa, and was announced in the Sirte Declaration in Sirte, Libya, on 9 September 1999, calling for the establishment of the AU. The advent of the African Union (AU) can be described as an event of great magnitude in the institutional evolution of the continent. In 1999, the Head of States and Government of the Organization of African Unity issued a declaration calling for the establishment of an African Union with a view to accelerating the process of integration in the continent. African countries, in their quest for unity, economic and social development under the banner of the OAU, have taken various initiatives and made substantial progress in many areas which paved the way for the establishment of the African Union (AU). The vision of a new, forward-looking, dynamic and integrated Africa will be fully realized through relentless struggle on several fronts and as a long term endeavor. The African Union has shifted focus from supporting liberation in the African territories under colonialism and apartheid, as envisaged by the OAU since 1963 and the Constitutive Act, to an organization spear-heading Africa’s development. The African Union operating its multifaceted activities with various organs, including the Assembly, the Executive Council, the Commission, the Permanent Representative Committee, Peace and Security Council (PSC), Pan African Parliament, the Court of Justice, among others. Besides the 40th Ordinary Session of the Executive Council aka Ministerial Session, the 35th ordinary session of the AU Assembly aka Heads of States and Government sessions are held in the fast-growing city of Addis Ababa, on 2-6 February 2022 under the theme “Building Resilience in Nutrition on the African Continent: Accelerate the Human Capital, Social and Economic Development” here in Addis Ababa, capital of Ethiopia, the host of the AU HQ, The summit is also looking into reports of the various Specialized Technical Committees (STCs), 7 in all, particularly those on Infrastructure and Energy, Education, Science and Innovation, Communication, Social development, Agriculture and Women empowerment. All of these issues considered represent development issues contained in the Agenda 2063, for whose execution members should strive. Participants of the 35th AU summit hopefully enjoy their stay in the fast-growing African capital, Addis Ababa where they can have unique experience in visiting new tourism destinations and recreational sites. Abyssinia Business Network / ABN / 2022

ETHIOPIA Africa’s oldest independent country, Ethiopia has until recently remained fastest growing economy today. With a population of over 110 million and an annual economic growth rate of 10% over the past 15 years, it presents a unique opportunity. Currently preventing it from joining the global map of successful economies due to various reasons that include COVID 19 pandemic, foreign socio-political pressures and the ongoing war in northern part of the country, the country is striving hard to recover from its recent economic staggering. The hospitality sector has collapsed as travel bans have gone into effect around the world due to COVID 19 pandemic. As various sources indicate the collateral damage is significant as hospitality accounts for over 8 percent of the total employment in the country. At the same time, Ethiopia’s manufacturing sector a key focus of the government in recent years has weakened due to the disruption in supply chains worldwide. The nation’s capital, the over 130-year old Addis Ababa is in a state of change. Everywhere you look there something new being built, something old being demolished and various socioeconomic developments is underway. Although different projects had been built across the country especially in the metropolis, mesmerizing and exquisite constructions of various institutions and tourist destinations have been developed over the past few years. Getting Image Abyssinia Business Network / ABN / 2022

Participants of the 35th AU summit are amazingly pleased by the new face of the African capital, Addis Ababa, which has recently managed to come up with new beautiful buildings, roads, parks and squares. The Unity Park, the Friendship Park, the African Park, the Mesqel Square, and the various terrific buildings such as headquarters of Commercial Bank of Ethiopia, Nib Bank and Hibret Bank offer extraordinary and breathtaking look. The city’s tourism activity is undoubtedly powered by different activities the participants undertake. This great event brings together various actors, including heads of states, journalists, diplomats, media professionals and other delegates. Hotels, restaurants, transport service providers, banks, souvenirs, gift article shops and the likes have finalized preparation to receive these visitors and offer friendly services. Being the seat of the African Union for over 50 years, Addis Ababa has still remained to be the most pleasant and blissful rendezvous for African brothers and sisters mainly during AU summit. Most importantly, the contribution of Addis Ababa’s residents to the peaceful and effective completion of the 35th AU summit is extraordinarily significant. Federal and local administration officials along with city residents have been exerting relentless efforts to ensure peace and order across the city, and to keep major streets where participants of the summit pass by so clean and attractive. Ethiopians in general and Addis residents in particular welcome all participants of the 35th AU summit.

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New Face of

Addis Ababa Abyssinia Business Network / ABN / 2022

Melkamu Assefa

CEO and Co-Owner of Marathon Motor Engineering

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The 35th AU summit

22 Zelalem Merawi

Girma Yifrashewa

Samuel Tekleyesus

Abyssinia Business Network / ABN / 2022

The Arduous Walk:

Marathon Motor Engineering

By Samuel Teka The automotive industry is a compilation of wide ranges of companies, organizations and SMEs involved in design,development, manufacturing, assembly and selling of vehicles that are run by electricity or gas. One of the largest revenue generating industries, the auto industry does not include industries reserved for maintenance of autos after delivery of products to the end-user such as automobile repair shops and motor fuelfilling stations. The emergence of the auto industry dates back to the1860s with hundreds of manufacturers that pioneered the transition to petroleum fueled transportation. The manufacturing of autos was dominantly carried out by the US,who led the world in total automobile production. The world had 32,028,500 automobiles in use, and the U.S. automobile industry produced over 90% of them by 1929. Car manufacturing involved manual assembly by a human worker. The process evolved from engineers working on a stationary car, to a conveyor belt system where the car passed through multiple stations of more specialized engineers. Starting in the 1960s, robotic equipment was introduced to the process, and today most cars are produced largely with automated machinery. At that time, the U.S. had one car per 4.87 persons. After 1945, the U.S. produced about 75 percent of world's auto production. In 1980, the U.S. was overtaken by Japan and then became world leader again in 1994. In 12

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2006, China took the top spot with 13.8 million units. With 19.3 million units manufactured in 2012, China almost doubled the U.S. production of 10.3 million units, while Japan was in third place with 9.9 million units. [5] From 1970 (140 models) over 1998 (260 models) to 2012 (684 models), the number of automobile models in the U.S. has grown exponentially. By 1950, the USA had produced more than 80% of motor vehicles and in the same time period the UK, Germany and France restarted production. Later in the 60s Japan started auto production and constantly increased its volumethrough the 1980s. US, Japan, Germany, France, and the UK produced about 80% of motor vehicles through the 1980s. In the 1990s South Korea became a volume producer. In 2004, Korea became No. 5 passing France. Later, China increased its production drastically, and became the world's largest producing country in 2009. By the 2010s: India overtook Korea, Canada, and Spain to become 5th largest automobile producer. In 2018, India overtook Germany to become 4th largest automobile producer. Ethiopia’s involvement in the auto industry was nothing more than the sale of built up units and their spare parts. Since its inception until 2019, Marathon motor was importing and distributing full-fledged plus warranty automotive and spare parts, which presented other options to the existing automotive market. In doing so, it has made the industry more conservative. Marathon motor assembled more than 14 different car models. However, this reality was changed when Marathon motor engineering joined the industry in 2019 to assemble cars in collaboration with South Korean auto giant Hyundai. ABN sat down with the CEO and co-owner of Marathon Motor Engineering to discuss the company’s influence in the Ethiopian auto industry, trends and future aspirations.

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Melkamu Assefa

CEO and Co-Owner of Marathon Motor Engineering

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“

Marathon Motor Engineering has a zero-emission policy, which aims to reduce the carbon footprint of its cars through assembly of environmentally friendly electric and conventional vehicles. The policy direction of Ethiopia also promotes such company policies that protect the well-being of the environment.” 14

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As a pioneer in Ethiopian electric car assembly, Marathon Motor Engineering boosted the capacity of the Ethiopian auto industry since officially inaugurated its assembly plant in 2019. Founded in 2008/09 Marathon motor Engineering has constantly performed beyond expectation in its more than decade long run that can be likened to a marathon run course. The engineering company has manufactured 14 different types of car models over the long period of the company’s operation. Melkamu Assefa is the CEO and Managing Director of Marathon Motor engineering. He graduated a bachelor degree in Business Administration from Addis Ababa University. Later, he earned his MBA from UK’s Leicester University with a focus on strategic marketing which he later put to use in his automotive career. “Marathon Motor Engineering started its operation at a time of the global financial crisis in 2008/09. The auto assembly company started out with the vision of becoming the best customer-centric auto retail and also deployed the 3S customer service plus warranty system.” Melkamu had been a participant of multiple international conferences and conventions held around the world. He also got different accreditation and recognition certificates from a plethora of organizations and institutions. Certified by World Business Net program from Japan and the Accelerated training program from UK, Melkamu is also one of the Toyota DNA ambassadors. The CEO has accumulated almost 30 years of work experience starting his profession in Moenco (Toyota) as a sales clerk and progressing through low to high profiles of managerial level careers. Melkamu said there are different kinds of leaders. Some acquire their skills through learning while others are born leaders. It is also evident that some Abyssinia Business Network / ABN / 2022

CEOs lead well-established cash cow businesses with little or no risk and guaranteed profits. Contrary to these individuals, Melkamu's impressive track record shows that he is a CEO who started a business from scratch with limited resources and acheived great feats through the years. His unparalalled leadeship skills shone through on Marathon motor's inaugural year of 2008/9, which was a time of the global recession. The CEO led the company through the rough time capably and now Marathon motor boasts the largest car assembly factory in East Africa. He worked for Nyala motor (Nissan) and rejoined Moenco (Toyota) before establishing auto company named Marathon Motor. It can be said that through his extensive and decades spanning career, Melkamu has taken the stairs rather than use a one way elevator to push himself into the top tier of the automotive industry. As Melkamu explained, Marathon Motor engineering started its operation at a time of the global financial crisis in 2008/09. The auto company started out with the vision of becoming the best customercentric auto retail and also deployed the 3S customer service system plus warranty. With the commitment and tenacity of CEO Melkamu, Marathon motor was able to withstand the financial crisis and become a consistently profitable auto car company. Unlike similar companies that stick to a single vision and mission statement, Marathon motor always modifies its vision to best serve and cater to the needs of the auto industry. 16

After 2 years of its establishment, the company changed its vision statement to “Aiming to be the best customer centric and auto Assembly Company,” and after assembling over 14 different types of car models for the auto maker further pushed the envelope in becoming a trend setter in Africa by launching the first electric car models in 2020. The Ethiopian automotive industry had a different landscape when Marathon Motor first entered the market. As Melkamu explained, many private companies in the automotive industry were involved in the industry at the time Marathon Motor Engineering was established. These companies were rich in their institutional and resource capacities. Hyundai was also one auto brand that had dealership affiliates but their sales and services were limited. As such, the resale value of the Hyundai car models was undermined. But the market share and resale value of Hyundai increased substantially when Marathon motor took on the dealership service and boosted the availability of Hyundai’s products and services. Marathon motor changed this reality by establishing maintenance workshops, importing adequate spare parts and building the confidence of the customer base. It was this dedicated and courageous move of the company that changed the tides of the market for Hyundai in Ethiopia. Since the year of establishment coincided with co-owner Haile G/Selassie’s record breaking marathon win in Berlin, it was befitting that the name of the auto company be Marathon Motor Engineering.

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“Marathon Motor Engineering has a zero-emission policy, which aims to reduce the carbon footprint of its cars through assembly of environmentally friendly electric and conventional vehicles. The policy direction of Ethiopia also promotes such company policies that protect the well-being of the environment.” Currently, Marathon Motor Engineering assembles and distributes cars in 2 categories; passenger and commercial cars. The first category, passenger cars range from small 800 cc cars to luxury SUVs and encompass more than 10 different models). The second category, Commercial cars are in another class of vehicles consisting tone trucks, cargo truck and midi buses that have 12-60 seats. The company’s sales model is based on the 3S marketing model which includes sales of cars, sales of spares parts, and sales of services plus warranty. Melkamu says that an auto company that doesn’t give these three services plus warranty cannot be called customer-centric. Most of the customers of Marathon Motor are the private sector and companies that are engaged in different macro-economic endeavors. A meager percentage of its commercial vehicles customers are governmental institutions that order in bulk quantities. Speaking on how Marathon motor started the assembly of Electric cars, Melkamu recalled that it all began when the CEO of Hyundai motor company (Global) visited Ethiopia for the first time in February, 2019 for the inaugural ceremony of Marathon’s car assembly factory which was to be the largest in east Africa. During his visit, the CEO met with Ethiopian Prime Minister Abiy Ahmed who urged Hyundai to transition its operation in Ethiopia into assembly of electric cars. A year after taking the assignment, Hyundai Motor and Marathon Motor Engineering made all the necessary arrangements to commence electric vehicle assembly and the first model, Ionic was launched. To make the launching a reality, policies and tax exemptions were afforded to omit excise tax by the Ministry of Finance, Ministry of Revenue , Customs Commission , Ministry of Industry and Ministry of Transport and Logistics. Abyssinia Business Network / ABN / 2022

The Transport and Logistics Minister also made necessary provisions in line with its 10 year national transportation policy. The 2nd electric car Model Kona was scheduled to be launched in 2021 but was delayed by 8 months due to the impact of the COVID-19 pandemic and shortage of electric car components globally. Kona’s launching was also accompanied with the introduction of charging stations. In the near future, Marathon motor has plans to extend its assembly services to the public transport sector and availing more affordable cars to the general population. However, these attempts need to be backed by a proper infrastructure that can accommodate such advancements and leaps. Melkamu also stressed on the importance of other auto maker companies to emerge in the market so that they can also take up a good portion of the automotive market share. With regards to the ambitious jump of the company directly to fully electric powered cars, Melkamu responded by 18

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“

Marathon motor is now selling Semi knocked down (Assembled) units which makes it different from companies that sell completely build up unit (finished and imported car sales). Therefore, to take the next leap into completely knocked down units enabling of multiple cottage industries engaged in component manufacturing is vital.”

saying that the transition into electric cars without considering hybrid cars was made after taking into account the potential of Ethiopian to make use of its renewable energy resources. He pointed out the exorbitant expenditure of Ethiopia on petroleum amounts to 2-3 billion dollar for a mere 1.5 million cars. Hence, cutting down on such expenditure by shifting directly to electric powered cars is a sensible approach, since it helps to advance in technology transfer and development of renewable energy systems. In its bid to contribute to environmental protection and pollution mitigation efforts, Marathon Motor Engineering has a zero-emission policy, which aims to reduce the carbon footprint of its cars through assembly of environmentally friendly electric and conventional vehicles. The policy direction of Ethiopia also promotes such company policies that protect the well-being of the environment. He also explained that within the next 2-5 years, 50-60% of Marathon’s produces will be zero-emission and zero-sound pollution cars. The contribution of companies such as Marathon motor to garner the much needed foreign currency is something that should not go unheeded. In addition to the economic gain, skill and technology transfer are the other contributions of these companies. Marathon motor also boasts on its reputation of creating job opportunities and transferring valuable knowledge and technology that will have a long lasting legacy in the Ethiopian automotive industry. The company has also created job opportunities for young professionals, and has aided in stimulating foreign

“ Marathon motor is now working on the human element of business by giving its employees continuous training, providing spares parts and service to its customers when sales show signs of decline”

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direct investment (FDI). Melkamu also highlighted the importance of Marathon Motor in involving in the regional trade relations by saying that the company can also export its products to other African countries, fosters regional cooperative efforts and secure foreign currency in the future. Like any other business establishment the effect of COVID-19 had a magnanimous impact on the operations of Marathon Motor engineering. The company was the first to fulfill COVID prevention protocols. It was also one of the few successful companies to be able to withstand its impact, eventhough the supply of components was lagging and dwindling owing to the fact that auto part manufacturing is carried out in different auto manufacturers hailing from multiple countries. Melkamu also said that some components are still not available as some electric component producers have not yet come back to full operation, holding belief that the effect of the pandemic will last well into the first 6 months of 2022. In order to do that it had been engaged in identifying possible strategic partners, auditing the current operational policy and also trained its workers to equip them very well with necessary skills. The company also restructured and modified its business model so as to use existing resources such as man power and managerial expertise to direct the company’s efforts in a much more amplified area of operation.“Marathon motor is now working on the human element of business by giving its employees continuous training, providing spares parts and service to its customers when sales show signs of decline”, said the managing director.

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“Marathon motor is now selling Semi knocked down (Assembled) units which makes it different from companies that sell completely build up unit (finished and imported car sales). Therefore, to take the next leap into completely knocked down units enabling of multiple cottage industries engaged in component manufacturing is vital.” Social responsibility is an area of engagement that the motor company is well known for. Marathon motor sees fulfilling its social responsibilities more than branding tool. It donates and contributes to national humanitarian efforts and has become the identity of the company. Also, the company considers this responsibility as a mandatory service. Most of the noteworthy social responsibility accomplishments are focused on humanitarian activities. On the 1st year of its establishment the engineering company donated a minibus to be used in aid efforts of homeless individuals. The following year, the company donated 2 mobile clinics to be used for malaria and HIV AIDS testing. This donation was made to the ministry of health and was worth 20 million ETB. On the 3rdyear of its establishment, 100 Korean students visited Ethiopia and rebuilt elderly housings in collaboration with Hyundai. Marathon motor engineering also donated a delivery van for the Grand Ethiopian Renaissance Dam. The company also made significant and generous donation when the COVID-19 pandemic hit Ethiopia by donating 27,000 masks and 2000 PPs to the Ethiopian Health ministry, Black Lion hospital, Hawassa city administration bureau and the Sidama regional government. During the northern Ethiopian conflict the company donated 1.5 million ETB to aid the national defense force in its effort to ensure peace and security. Melkamu highlighted some of the drawbacks that hold the company from achieving further. One of the major shortcomings is observed in its professionals. The CEO said that the lack of skill was a major deterring factor as elements of professionalism such asprofessional discipline and 20

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commitment were lacking. Another limitation is resource limitation observed in adequate foreign currency. “Due to the severe shortage of the foreign currency Marathon is currently operating at less than 10% capacity,” said Melkamu. If conditions were conducive the company could produce at more than 90% capacity. Asked if the current manufacturing setup of the company can accommodate manufacturing of cars from scratch, Melkamu said that Marathon motor is now selling semi knocked down (Assembled) units which makes it different from companies that sell completely build up unit (finished and imported car sales). Therefore, to take the next leap into completely knocked down units enabling of multiple cottage industries engaged in component manufacturing is vital. Marathon Motor Engineering is a leading Ethiopian auto assembly industry and has constantly excelled expectations in becoming one of the best auto engineering companies in the whole of Africa. It aims to constantly extend its customer base in its ambitions to set the standards in becoming a towering auto company. Abyssinia Business Network / ABN / 2022

Ker-Ezhi Ethiopia

Promoting National Image

By Samuel Teka Ethiopia has the largest livestock population in Africa, measured at around 53 million cattle. However, only 50% of the hide and skin potential is currently being utilized. It used to be even lower, which in 2012 prompted the government to start a programme discouraging the export of raw hides in an effort to boost value addition, according to the Ethiopian Investment Commission. The leather products manufacturing sector is one of the leading manufacturing sectors for Ethiopia. Currently, Ethiopia is exporting mainly finished leather followed by growing shoe exports. Other leather items including gloves, bags and small leather articles have a large potential for exponential growth. The recent expansion in leather gloves production is proof of existing capacity as well as the potential to export with a steady growth of volume and value. ABN sat down with Ethiopian-born Zelalem Merawi, CEO and Managing Director of Zelalem Tour and Travel Agent and KerEzhi Ethiopia Leather Manufacturing plc to discuss his involvement in the tourism sector and Ker-Ezhi’s prospects in the future 22

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“

May pleasant things be seen over Ethiopia”

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Zelalem Merawi

CEO and Managing Director of Zelalem Tour and Travel Agent and Ker-Ezhi Ethiopia Leather Manufacturing plc

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Humble Beginning Born in the town of ambo, Zelalem Merawi was raised in the historic town of Addis Alem, located some 55 kilometers away from the capital Addis Ababa. He attended his elementary education in his birth place before moving to the capital to finish his secondary level education at Shimelis Habte high school. Zelalem then went on to join Lion Ethiopia Tourism College to earn a bachelors degree in Tourism Management and has actively been engaged in the Ethiopian tourism industry for the past 20 years. After the decline of the tourism industry due to Ethnic violence and conflicts, he embarked on leather manufacturing that has the potential to change the way Ethiopian leather products are perceived locally and internationally. Zelalem believes that his keenness in the tourism industries began while working as a car mechanic at a local garage in Addis Alem. There was a church and Emperor Menelik’s museum which were visited by tourists. During the time tour companies used to service their cars at the garage and Zelalem got the chance to study how the business of tour and travel operated. After serving 5-6 years as a driver and tourist guide he has established Zelalem Tour and Travel plc. Looking back at the humble beginnings Zelalem recalled the challenging nature of the industry as 24

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it required capital, and a potential to establish relationships. Since he was from a poor family that didn’t have the financial resources to help him with his business, Zelalem had to work multiple jobs as a construction laborer, shoe shiner and a car mechanic. After working diligently and saving up 70,000 ETB, he started Zelalem tour and travel with a single touring car. After 20 years his business has now managed to create job opportunities for 20 citizens while 17 touring cars serving tourists visiting Ethiopia from all corners of the world. However, after social conflicts and unrests became rampant 5 years ago, the tourism industry took a major hit. This necessitated a shift to alternative businesses and Zelalem later established Ker-Ezhi Leather manufacturing. The leather manufacturing firm compensated for the loss registered in the tour and travel business for Zelalem and has been a major success in introducing Ethiopian leather products in a new light. In line with this, Zelalem embarked on Ker-Ezhi Ethiopia tourist magazine and a tourist guide book that were published every 6 months. A website dedicated to the promotion of Ethiopian tourist destinations was also another achievement of Zelalem tour and Travel Company. Launched in 2010, the updated online system serves its users in over 72 languages. The company also made strides by using social media in a professional way. Abyssinia Business Network / ABN / 2022

Special provisions such as online payment and booking systems, that were non-existent before in the Ethiopian tourism sector, were made available. “As production levels increased and the number of workers reached 6’s and 7’s the need to shift into a manufacturing platform arose. Currently, after a scale-up of the production level, Ker-Ezhi has over 65 workers and 7 shops located in tourist and conference hotspots.” In addition the tour and travel company, Zelalem established the Ker-Ezhi Ethiopia Tour guide magazine and website directory team that is well organized with marketing, IT, and content creation teams. The Website directory had over 400 tour operators and up to 1000 hotels in its data repository that aims to link tourists and service providers within the tourism sector value chain. As such it had a magnanimous impact in benefitting all stakeholders with in the tourism sector. 26

The launch of the website directory was so successful that close to 7.5 million tourists visited the site as Zelalem explained. For his efforts in promoting Ethiopian tourism, Zelalem received international awards from the US, Houston and Switzerland (Century international quality award) which awards nominees by taking into consideration their market linkage, social responsibility and job creation efforts they brought about into their respective areas of engagement. But the success of Zelalem tour and travel were curtailed in the wake of social conflicts, the pandemic and other shortcomings that the country faced over the past 5 years. These challenges combined to a devastating impact on the tourism sector which is finding it hard to recover from. As a result, tourists were apprehensive to visit the country since they cannot be guaranteed travel insurances while travelling to a country under a state of emergency.

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Paradigm Shift In a counteracting move to recover from the impact of the downturn in the tourism business, Zelalem shifted his focus to the Leather industry which has tangential connections with tourism. He has recently established Ker-Ezhi Ethiopian leather manufacturing plc. Ker-Ezhi is the name of Zelalem’s son, and means “Let pleasant things be seen over Ethiopia”. The phrase was selected as it resonates with image building efforts. The manufacturing company was established in response to the poor quality of products in tourist shops in Addis Ababa. It also had the vision of tapping into Addis Ababa’s huge MICE industry potential. Prior to the establishment of Ker-Ezhi Tourists had to resort to buying souvenirs imported from other African countries such as Kenya, Tanzania and even South Sudan since there was a lack of homemade artefacts and souvenirs. At Ker-Ezhi’s inception stage, international experiences from the US, India, Europe and other countries were taken in order to get up-todate knowledge in the industry. The manufacturing workshop started operation with 2 female workers making leather products from home since the time was on the onset of the COVID-19 pandemic. Some of its leather products are Belts, Wallets, Bags, Travel bags, Car Seats, Clothings, Shoes and many more. As production levels increased and the number of workers reached 6’s and 7’s the need to shift into a manufacturing platform arose. Currently, after a scale-

up of the production level, Ker-Ezhi has over 65 workers and 7 shops located in tourist and conference hotspots. “We believe that updating the knowledge of its workers is essential. To this end, we regularly invite international leather experts from Belgium, Italy, India and China to give voluntary trainings. We also value the skills and expertise of its workers by paying optimum wages tantamount to the services at the company.” Said Zelalem. Ker-Ezhi has multiple destinations and markets in different countries around the world. It is also the first Ethiopian franchised brand working with partners in Kenya, South Africa, the UK and the US. The company is also working to launch a leather pavilion at Ethiopian Airlines where there is a high tourist traffic. The pavilion is projected to garner over 1 million USD in revenues annually. Speaking on the major contributions of Ker-Ezhi, Zelalem stressed that the company is the first to promote the image of Ethiopia through leather products besides the tourism sector. Another achievement is the branding in a bid to join the international fashion industry. It is also a major Ethiopian fashion brand to sell its products in Seattle airport that serves 60 million travelers every year alongside other brands such as Chanel, Louis Vuitton, and Gucci. Zelalem also noted the sense of confidence that KerEzhi created in the Ethiopian leather industry by asserting that Ethiopian leather products can be a success and competitive internationally. Abyssinia Business Network / ABN / 2022

“Ker–Ezhi relies on the efficient logistics services of the Ethiopian airlines. Zelalem believes that using the airlines as the go to logistics resource gives the company immense benefits. But when it comes to man power, the Ethiopian leather industry has limited number of personnel that graduate from distinguished leather institutes.” To be more productive involvement of stakeholders of industries in policy making would have a positive impact on the sector’s development; banking sectors not interested to give loans, leather cities need to be established, sole and leather product accessory factories need to be attracted to this end; mojo leather city need to be more professional, organized and product specialization needs to be created to have standardized finished products. This is beneficial as the vast majority of cash resource in the leather industry flows through finished products not on raw or semi-finished products. Logistics and man power are the key if success is to be guaranteed in the leather industry. According to Zelalem, Ker–Ezhi relies on the efficient logistics services of the Ethiopian airlines. Zelalem believes that using the airlines as the go to logistics resource gives the company immense benefits. But when it comes to man power, the Ethiopian leather industry has limited number of personnel that graduate from distinguished leather institutes. Graduates of leather technology and skilled laborers need to be combined to deliver high end products as Zelalem contends. Without them promotional works will be toothless. Zelalem also reiterated that there are multiple cross-cutting collaborations

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that Ker-Ezhi is carrying out such as working with AU, Ethiopian airlines and other continental organizations. Noting that the company cannot go further without collaborative work, it has organized and trained more than 20 SMEs to integrate their quality standards with Ker-Ezhi so as to outsource bulk orders to these small establishments. The CEO also noted some of the major bottlenecks in the industry such as raw leather unavailability, illegal exportation and other unsolicited illegal acts. These should be stopped in their tracks if Ethiopia is to benefit from the leather industry. Another area of improvement lies in tax-free accessories importation. Zelalem believes that tax-free importation of end product materials is necessary to stimulate the productivity of the leather industry. Ker-Ezhi uses brand ambassadors as part of its brand marketing. Indeed other major companies have used influential celebrities as brand ambassadors. But Ker-Ezhi’s selection criteria of its brand ambassador is combined their social media and mainstream popularity. Hence, its current brand ambassador has more than 1 million social media followers. This created the opportunity to grab the social media audience and secure international market linkage. Abyssinia Business Network / ABN / 2022

Girma Yifrashewa:

The Classical

Music Maestro By Samuel Teka Today, there are dozens, if not hundreds, of masterful pianists and music composers from all parts of the world. Ethiopia has given birth to most influential music composers such as Mulatu Astatike, the 90 plus-year old Emahoy Tsige Mariam Gabbro, Samuel Yirga and the likes. Most notably, Saint Yared, a composer and a choreographer who lived in Aksum in the 6th Century AD, is credited for inventing the melody /zema/ of the Ethiopian Orthodox Tewahdo Church. Depending on the composition, a performance may benefit more from a certain type of pianist. Also, it’s not the same when a pianist plays during a solo performance and with an entire symphonic orchestra. Finally, as time goes by, the very nature of piano playing changes. New generations of players bring their own sensibility to the tradition. Girma Yifrashewa, a Bulgarian-trained pianist is one of the few Ethiopian composers who has been promoting his country worldwide through his magnificent music performance; Girma has spent a considerable part of his career perfecting his relationship to the canons of Chopin, Debussy, and other classical pianists, hoping to someday perform in conjunction with a full symphony orchestra. Nonetheless, he has not let the structure often associated with classical music to interfere with the development of his own imagination and ideas, which are inherently Ethiopian as he grew up in Addis Ababa, the country’s capital. ABN has taken time to talk to the renowned classic music guru, Girma Yifrashewa, on overall professional development and related issues. 30

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Girma Yifrashewa classical pianists

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Girma Yifrashewa's musical career began when he started playing Kirar, a harp like Ethiopian traditional instrument, during his time at elementary school. Born in Addis Ababa in 1967, Girma was introduced to the Piano at the age of 16 when he joined the Yared School of Music in Addis Ababa. A strong willed musician since his tender age, Girma attempted to join the famous Yared Music School when he was in 6th and 8th grades before eventually succeeding in his third attempt when he was a 10th grader. Girma is renowned and venerated for his years of expertise in classical music composition. While playing with the traditional instrument Kirar, which is an easily accessible instrument, he was never aware of any music school in Addis Ababa, Girma recalls. After being informed of Yared Music School, Girma relentlessly tried to enroll in which he later succeeded. After completing his study at Yared Music School, Girma continued his studies at the Sofia State Conservatory of Music in Bulgaria. However, he was forced to lose his scholarship after only three years due to the fall of the Bulgarian Communist regime in 1989. He then immigrated to Italy where, his talent and desire to return to his studies in Bulgaria was discovered by the Christian Brothers under the care of Caritas. Through his newly found benefactors’ support, Girma returned to the Sofia Conservatory in 1991, where he graduated with a Masters in Piano under Professor Atanas Kurtev. While attending Yared music school, Girma was interested in studying the piano which is different from other musical instruments such as cello, violin and other classical music instruments. Dubbed as the king of musical instruments, the piano is different from other instruments because it can either be an orchestral instrument by itself or used as accompanying instrument in a symphony. It has also more musical repertoires written based on it more than any other musical instrument. 32

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The fundraising event-“ Ethiopia: Our Motherland” “ Ethiopia: Our Motherland”

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“The culture of consuming classical compositions among the mainstream audience is very much limited. In order to change this reality, professional discipline in the music industry is vital and working conditions need to be conducive.” He showcased his music talent in Bulgaria in which he made an impact as a solo pianist performing the works of famous composers Schumann, Schubert, Chopin and Debussy, throughout the country until his return to East Africa in 1995. He had a good knack for and reference to the classical compositions of Mozart and Bach. Yifrashewa returned to Ethiopia in 1995, teaching piano at the Yared School of Music until 2001. He received scholarships for shortterm specialization courses from the British Royal Academy of Music in London (1997) and German Government at the Hochschule fur Music Und Theater in Leipzig (1999). Currently, Yifrashewa works to promote Ethiopian and Classical Music throughout the continent and beyond. Girma has held many concerts both in Ethiopia and outside not only on his international tours (solo tour and with Ethiopian vocalists), but also on separate invitations sent to him (Egypt, Djibouti, Rwanda, Burundi, Kenya, Uganda, Mauritius, Mozambique, Zimbabwe, Namibia, Lesotho, South Africa, Seychelles, Zambia, Malawi, Bulgaria, Italy, Germany, United Kingdom, France, Australia, USA). 34

Regarding the new generation of musicians, Girma expressed his skeptic views about their commitment and zeal to classical music composition. This is due to the intricate nature of classical music and the long hours and time it takes to master. To avoid the long practice hours most youth professionals tend to resort towards electronic and dance music, as Girma said. He also bemoans Ethiopian culture of classical music composition, as it is not developed. The culture of consuming classical compositions among the mainstream audience is very much limited. In order to change this reality, professional discipline in the music industry is vital and working conditions need to be conducive. Additionally, formal music schools are important to develop and nurture the talent of artistically gifted students. “To this end, basic knowledge of western classical instruments is essential and we need to fuse it with the classical music”, Girma pointed out. He also recalled that He had to learn the basics of classical music composition so as to fuse it with melodies and style of the Kirar which does not have many repertoires written based on it before. For his contribution in classical music, Girma received various international recognitions and awards. In 2014, he was the recipient of the Bulgarian National Medal for being an influential music composer in Bulgarian

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classical music industry. Girma says he regards this award highly since he received it from a country that gave him a scholarship. Other awards he received are from the UCLA department of Ethnomusicology, Azusa-Pacific University for his participation, and other organizations. The Washington post, New York Times, and the Irish times gave him appreciable reviews on his albums exalting his promotion of western Classical music by fusing it with African traditional music. “The fund-raising event-“ Ethiopia: Our Motherland” is different from other events in that it involves painters, musicians, writers, theatrical actors, and film professionals in coming together for a common cause of standing together at a time of need.” In October 2009, Yifrashewa was invited for the International Symposium and Festival in The USA “Africa Meets North America” at the University of California Los Angeles (UCLA). He returned to the United States in the summer of 2013 for concerts with Issue Project Room in Brooklyn and Non Sequitur in Seattle, thanks in part to support from Unseen Worlds Records, which garned Girma a positive review from The New York Times. Girma is now organizing a fundraising program for the war torn regions of Ethiopia during the northern Ethiopia war. Speaking about his fundraiser titled “Yegna enat” meaning “Ethiopia: our motherland”, he said the aim of

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the event is to send a message to the international community, and express that Ethiopia is a country of unity, not a bad example of a fragile state. The fund-raising event“Ethiopia: Our Motherland” is different from other events in that it involves painters, musicians, writers, theatrical actors, and film professionals in coming together for a common cause of standing together at a time of need. It will raise funds through YouTube streaming and the collected funds will go to internally displaced people in the northern region. Girma mentioned what makes this event different from other similar events held across the

country. He said that this fundraiser event will present the art of music in a different way by bringing celebrities and public figures from different disciplines, and show that we Ethiopians can stand together despite the divisive attempts by western countries. This will in turn create a sense of unity from different perspectives and negates individualism. The fundraiser aims to raise 1 million birr during the performance day. Girma said that Arts TV station is working with the organizers of the event as a partner and also said that non-attendees can also contribute to the cause and help increase funds beyond the target of 1 million birr.

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He also said that many of the music shows he performed at are created through the relationship he has with music institutions in European countries and not through the Ethiopian government. This has to be changed and the contribution of the government must be more pronounced if musicians are to showcase their skills and talent to the wider public. Understanding of classical music should be developed so that Ethiopia can tap into the potential of youth musicians. Wrapping up his views, Girma said that artists and professionals in the art and entertainment sector should not be remembered at a time of conflict and hardship but should always be valued. Art should be supported sustainably and consistent efforts must be exerted to revamp the skills of musicians to create quality contents.

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The 35th AU summit: Reinforcing Health System The 35th AU summit is held amid recovery endeavors for economies affected by Covid-19 pandemic. The summit is held on 5-6 February 2022 under the theme “Building Resilience in Nutrition on the African Continent: Accelerate the Human Capital, Social and Economic Development” here in Addis Ababa, capital of Ethiopia, the host of the AU HQ, The session of the heads of states has been preceded by the virtual 43rd Ordinary Session of the Permanent Representatives’ Committee (PRC). The PRC session started on the 20th of January with a minute of silence in memory of the victims of Covid-19 among which some AU Member State embassies lost diplomats and collaborators while the AU Commission lost staff members. Addressing the Ambassadors in his opening remarks, the Chairperson of the AU Commission (AUC), H.E Moussa Faki Mahamat reiterated his hope that this year will be marked by stronger collaboration between the Commission and the PRC, in the continuation of a successful practice that has been strengthened in recent times. He saluted the cooperation and support by the Chair of the PRC, H.E. Jean Léon Ngandu Ilunga, during the disruptive effect of the COVID-19 pandemic. On the issue of the prevailing pandemic, the Chairperson of the AUC underscored that the covid-19 pandemic, beyond its disastrous health and socio-economic effects, has above all shed light on the structural weaknesses of health systems in Africa. 36

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“I hope that your deliberations, as usual and better than before, will afford the hierarchical organs a new opportunity to welcome the fine performance of the Permanent Representatives Committee.” Faki noted.

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“The PRC and the Commission, committed to the values of solidarity, empathy and African unity, decided to maintain its presence in Addis Ababa. Everyone realizes that it was a good choice.” He reiterated the need for the AU Member States together with the Africa CDC, to reinforce this sector. The PRC Session considers draft agenda and draft decisions of the 40th Ordinary Session of the Executive Council and agenda of the 35th Ordinary Session of the AU Assembly, took place 2 - 3 and 5 - 6 February 2022 respectively. Addressing participants, Faki said, “I am pleased to present, in these first weeks of the New Year 2022, my best wishes for health and prosperity to you, your families and your respective States and Governments. Furthermore, I hope that this New Year will be marked by stronger cooperation between the Commission and the PRC, in the continuation of a successful practice that has been strengthened in recent times.” In this regard, he commends the wise leadership of H.E. Jean Léon NGANDU ILUNGA, Permanent Representative of the Democratic Republic of the Congo and Chairman of the Permanent Representatives Committee. Abyssinia Business Network / ABN / 2022

He also wishes to thank and congratulates the chairperson on the excellent work he has done in these difficult times, especially as the disruptive effect of the COVID-19 pandemic, already baffling despite the strong response actions, has been compounded, in the last months of 2021, by a security threat in the host country. The PRC and the Commission, committed to the values of solidarity, empathy and African unity, decided to maintain its presence in Addis Ababa. Everyone realizes that it was a good choice. Faki goes on to say that it is with great satisfaction that he has noted the significant importance he has given to the issues of audit and multilateral cooperation. These two points determine, in a way, the smooth running of our Union. The audit induces the implementation of accountability and guarantees a rational and responsible use of our both human and financial resources. “The management of our relations with partners, within the framework of multilateral cooperation, will have to take greater account of our interests, identified upstream in a concerted effort, in order to present a coherent posture to the partner articulated on common positions. Have we not often said that Africa must speak with one voice?” he asked. “I hope that your deliberations, as usual and better than before, will afford the hierarchical organs a new opportunity to welcome the fine 38

performance of the Permanent Representatives Committee.” He further noted that participants will have to consider the Reports of the various Specialized Technical Committees (STCs), 7 in all, particularly those on Infrastructure and Energy, Education, Science and Innovation, Communication, Social development, Agriculture and Women empowerment. All of these issues considered represent development issues contained in the Agenda 2063, for whose execution we should strive. The recommendations of the STC on Justice and Legal Matters will enable decisions concerning the ongoing Institutional Reform to acquire the necessary legal and political force for the phase of their operationalization. The COVID-19 pandemic, beyond its disastrous health and socio-economic effects, has, above all, shed light on the structural weaknesses of our health systems in Africa. He stated that the attention Mr. Chairman of PRC will have to give to the modalities of operationalization of the Africa CDC, to the partnerships in the manufacture of vaccines and to the quantitative aspect of the instruments of ratification for the establishment of the Africa Medicines Agency (AMA), will certainly facilitate the initiation of a break from the currently dominant pattern and to place Africa in a renewed approach to health issues. Institutional expansion, although

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The 35th AU summit

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it responds to a concern for operational efficiency, needs a more critical analysis to guarantee its compatibility with the budgetary constraints imposed by a sluggish economic situation, both internally at the level of our Member States and at Continental and international levels. He stressed the need to consider the Report of the African Union Commission on International Law. At a time when international relations seem to be reconfiguring around a worrying rise in unilateralism, saying members must reaffirm our position that of multilateralism built on the crucible of common efforts, the only guarantee of the advent of a robust security and peace regime and shared prosperity, adding that other more specific issues on your agenda will receive the attention they deserve. “I hope that your deliberations, as usual and better than before, will afford the hierarchical organs a new opportunity to welcome the fine performance of the Permanent Representatives Committee.” Faki noted. “For my part,” he continued, “I will never tire of commending your commitment to finding innovative solutions to the challenges you are facing that will enable the Agenda of Africa to become clearer and visible.” He eventually called upon all participants to better focus on the issue of streamlining meetings, as the PRC Chairman reminded all, and on how to resolve this contradiction between the desire to lighten our agendas and the plethora of documents. Abyssinia Business Network / ABN / 2022

AFCFTA for Inclusive

growth and Prosperity The African Continental Free Trade Area is one of the ﬂagship projects under Agenda 2063 of the African Union, which includes various targets related to sustainable and inclusive growth. One of the objectives of the African Continental Free Trade Area is to “Promote and Attain sustainable and inclusive socioeconomic development, gender equality and structural transformation of the State Parties”. The AFCFTA can be addressed through complementary interventions and partnerships, inclusive exploitation of potential benefits, which include economic diversification and stronger resilience; an increase in the trade shares of women, youth and locally owned enterprises; and support for the graduation of informal ventures to small and mediumsized enterprises. AU’s discussion underscores the strategic role of the African Continental Free Trade Area in unleashing equal export opportunities for all actors in support of inclusive growth and development. High levels of unexploited trade potential reveal opportunities for inclusive growth under the African Continental Free Trade Area. However, this can only be achieved if implementation is accompanied by coherent trade policies and strategies that focus on reducing commodity dependence 42

in the region and that promote fair trade. The effectiveness of such policies is contingent on the quality of institutional mechanisms, both for monitoring implementation and for dispute settlement, and partnerships that support the realization of the African Continental Free Trade Area. Key stylized facts include the following: On average, the proportion of households in Africa with an income or consumption level at below $1.9 per day (purchasing power parity) declined from 40.2 percent in 2010 to 34.4 per cent in 2019. With regard to inequality, countries in Africa have a Gini Index ranging from 27.6 per cent (Algeria) to 63.3 per cent (South Africa). The pandemic risks jeopardizing many of the growth gains made in recent years, halting the decline in poverty while exacerbating inequality. Inclusive growth includes elements of income-related inclusive growth and multidimensional inclusive growth; the former, across all segments of the population, as illustrated through growth incidence curves, has been inclusive (that is, growth that reduces poverty and inequality) in only 17 countries in Africa;

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poverty-reducing but inequalityincreasing in 18 countries; and noninclusive (that is, growth that does not reduce poverty or inequality) in 14 countries. The total untapped export potential of intra-African trade is $21.9 billion, more than one third of which is due to trade-related frictions. The remaining $13.3 billion is driven by GDP and population growth that is expected to translate into increased supply and demand on the continent. Partial tariff liberalization by 2025 under the African Continental Free Trade Area is expected to increase the intra-African export potential by an additional $9.2 billion. The scope of the African Continental Free Trade Area for strengthening regional value chains can increase the resilience of countries in Africa in the postpandemic period, in particular with regard to medical supplies and food products. This may also be relevant with regard to renewable energy because different countries have different energy resources and more intense trade can support the diversification of the energy mix and harness complementarities. This may be important in Africa given the growing prominence of a green growth agenda as part of post-pandemic scenarios.

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To further increase the inclusivity of intra-African trade, it is necessary to facilitate the participation of domestic and women-owned enterprises. Facilitating market entrance and reducing the costs of starting a business, as well as strengthening productive linkages between exporters and the domestic economy, are critical for more inclusive growth. Ongoing trade-related frictions, including non-tariff measures, infrastructure gaps and inadequate market information, pose particular burdens on small and mediumsized enterprises and marginalized groups. Firms experience business constraints differently and access to inputs and productive capacities is not equally distributed. Addressing the dominance of a few market actors and structural and regulatory barriers to entering domestic and foreign markets requires longterm cooperation in investment and competition policies. Moreover, some trade barriers entail fixedcost elements and smaller actors are therefore disproportionately affected, notably with regard to nontariff measures. The effective implementation of coherent policies and strategies and the harmonization of trade rules is important and policy sequencing is key in delivering on the potential of the African Continental Free Trade Area Agreement.

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Challenges related to the dispute settlement mechanism of the African Continental Free Trade Area Agreement, including both financial and political costs and capacity constraints, should be addressed, to

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empower small and medium-sized enterprises to raise their voices and protect their rights. Policy Frameworks The African Continental Free Trade Area can support postpandemic recovery and inclusive growth across the continent through job creation, the expansion of business opportunities and the promotion of regional value chains for trade in goods and services. With appropriate policies, it can help to create a conducive environment for small-scale traders and often-marginalized businesses to produce and trade goods and services fairly in intraAfrican markets. The inclusive benefits of the African Continental Free Trade can materialize if trade reforms and the necessary complementary interventions are efficiently implemented and the costs of compliance minimized. The multidimensional characteristics of the Agreement suggest that achieving this will entail cooperation to optimize synergies among the various stakeholders. This, in turn, will require reforms to be implemented in an integrated manner that ensures not only coherence among regional and national regulatory and policy frameworks but also alignment with multilateral agendas. Technical barriers to trade and sanitary and phytosanitary measures that have the objective of ensuring food safety and protecting human, plant and

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animal health could help to improve sustainability. In addition, compliance with non-tariff measures can help build consumer confidence and trust and thereby help to reduce transaction costs. However, such compliance can often be costly and burdensome, in particular for small and mediumsized enterprises with limited resources. In Africa, challenges related to nontariff measures are compounded by overlapping trade schemes and heterogeneous rules, with several countries belonging to more than one REC. The situation makes compliance with trade rules costly and has impeded trade within RECs. Efforts are being made to harmonize trade rules among RECs, for example through the tripartite free trade area agreement between the Common Market for Eastern and Southern Africa, the East African Community and the Southern African Development Community. The African Continental Free Trade Area can also contribute to these efforts. If the proliferation and heterogeneity of trade rules across the various regional trade agreements continue unchecked, a situation that is likely to prevail in the short term, compliance with nontariff measures under the Agreement may be costly for businesses, particularly small and mediumsized enterprises that constitute the bulk of the private sector in Africa. The coherence of policies is essential, to reap the benefts of a free trade area, since national interests may tend to incentivize the 46

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protection of domestic industries and thereby may jeopardize regional integration efforts. For example, the experience of the Southern African Development Community shows that the regional integration agenda has been hindered by conﬂicting national trade and industrial policies. Countries in the region have used non-tariff barriers in order to protect national industries despite the commitment to a regional industrialization agenda, such as by banning the imports and exports of products from other member States, such as cement, maize, poultry, salt, sugar and timber. In some instances, such national policies are legitimated by imperatives to protect infant industries. In recognition of this, the protocol on trade in goods of the African Continental Free Trade Area Agreement allows up to 3 per cent of tariff lines to be excluded from the tariff liberalization scheme, thereby giving room to countries willing to do so to protect infant industries. States Parties to the Agreement should avoid instituting national policies or any action that could limit intraAfrican trade. Finally, recurrent border closures resulting from trade disputes or non-trade matters often impede trade ﬂows across the continent. If national policies and trade frictions continue to undermine regional integration, gains from the African Continental Free Trade Area cannot be achieved. Realizing greater inclusiveness of trade A key obstacle to greater

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Getting Image intra-African trade is the low complementarity of regional trade, which can be overcome through greater market access under the African Continental Free Trade Area. Reaping the benefits of the Free Trade Area is hindered by several market distortions and trade frictions. Set out below are the ways in which regulatory and structural barriers to bilateral trade are an impediment to inclusive participation in trade, and insufficient and unequal access to productive capacities, as the main challenge to the ability to contribute to inclusive growth in Africa under the Free Trade Area, is also addressed. Greater regional integration offers more opportunities to climb the technological ladder than do exports outside the continent, given that intraAfrican exports are technologically

more advanced, as indicated by a larger share of medium- and high-technology manufactures. Moreover, intra-African trade consists of a higher share of processed goods (41%) than exports to the rest of the world (17%), and it is much more diversified in terms of traded products. Despite the advantages of greater intraregional trade for export diversification, the level of intraregional complementarity in Africa is below that of the Americas, Asia and Europe, which currently limits the potential of the African integration process. Africa’s export profile does not correspond as much with its import basket as in other continents, which partly explains why the level of intraAfrican trade is not higher. Low

complementarity of intra-African trade is rooted in a narrow export basket, limited diversification, regulatory and structural barriers to trade and overlapping trade strategies (International Trade Centre, 2019). Rising demand through GDP and population growth triggers high import demand and guides countries in Africa towards greater economic diversification. A simulation of the potential for additional exports, by combining information on import demand with potential export supply, is set out below. Currently untapped trade opportunities, explained by trade frictions and expected growth, and additional opportunities that could arise through tariff liberalization under the African Continental Free Trade Area are also identified.

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Empowering informal actors Informal employment and trade play a large part in terms of livelihoods on the continent. It is estimated that informal employment constitutes a large share of total employment,with 72 per cent of non-agricultural employment and 98 per cent of agricultural employment being informal. In many countries in Africa, the informal economy, albeit in gradual decline over the past 30 years, remains pervasive and constitutes a significant share of the total economy, ranging from a low of 21 per cent in Mauritius to a high of 59 per cent in Zimbabwe in 2018. A practice predating modern Africa, informal cross-border trade contributes to job creation, especially for women and young people, and food security through the trade of agricultural goods and economic growth; it is therefore a key pillar of intra-African trade integration. The role of informal cross-border trade for inclusive growth and poverty reduction, inasmuch as it functions as an employer of last resort and can be a survival strategy for vulnerable groups for which formal employment opportunities are not available. There is no streamlined definition for informal cross-border trade, given that it covers an array of activities, from formal to informal production and trade. The diverging conceptual approaches to informal cross-border trade have posed difficulties for the collection of data on the activities of informal cross-border traders within RECs and at the national level. 48

Informal cross-border trade is sometimes wrongly equated with smuggling, given that both practices evade duties and regulations, but the difference is essentially motivational, in that informal cross-border traders avoid formalities for more legitimate reasons, such as the higher costs associated with formal trade and/or a lack of skills or knowledge to be able to comply with trade regulations. A distinction should also be drawn between informal cross-border trade and illicit trade, whereby illicit trade refers to the trade in illegal goods, such as arms or drugs, or trafficking in persons, which are criminal and deemed socially undesirable. Although informal trade is also unreported and can fail to comply with regulations, the products involved are not illegal to trade or use. In this regard, institutions such as the World Bank and the Common Market for Eastern and Southern Africa use the term “small-scale cross-border trade” to distinguish between illegal activities and informal cross-border trade. Trade facilitation measures can be a means for informal and small-scale traders to scale up their activities and graduate from the “informality trap” to improved economic inclusivity. Trade facilitation measures that target the better integration of informal cross-border traders into formal trade, such as the simplified trade regime and cooperative enterprise model, in particular the implementation of simplified trade regimes in the Common Market for Eastern and Southern Africa and the East African Community, are considered below. A continental simplified trade regime from which the African Continental

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Free Trade Area can draw concrete lessons and on which it can build during its implementation, is recommended. Future Trends Future research and policy amendments should assess the domestic income distribution effects of the African Continental Free Trade Area, to help support those who may benefit less. Such analyses could also examine the differential impacts of initiatives on women and men. Ongoing tariff negotiations with regard to sensitive products should follow a rational framework that is empirically based, to determine the commodities that should be included. In this regard, it is important to monitor preference utilization, to determine the preferential regime that is utilized the most along key corridors, as this could inform future negotiations on potential improvements in provisions on rules of origin and non-tariff measures. Additional research is also needed on the determinants of sustainable market entrance for new firms and how the firm-level concentration of exports from both international and domestic companies may be a structural barrier to reaping inclusive benefits. Policymakers need to understand the market structure and power of established firms, to either increase competition through support for market entrance or, in instances of high sunk costs and economies of scale, be aware of potentially anticompetitive behavior. There is no one-size-fits-all solution. The analysis in this report can be used as a toolbox by countries in assessing the inclusiveness of trade patterns and how trade agreements can promote the economic participation of marginalized groups in labor-intensive and high value added .

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Striving Ahead

with Persistence By Staff Writer Ethiopia’s forefront communications company, Ethiotelecom, is a 128 yearold corporation that has been connecting Ethiopians residing in and out of the nation for several decades. It has managed to stay competitive and relevant through the good and bad times. Steered by its management team which has been instrumental to the successful run of profit and growth, Ethiotelecom was able to record high numbers through the years. The telecom company recently publicized its first half business performance report the 2021/22 fiscal year. The performance was reviewed by a board of experts and higher management team and regarded as an outstanding execution given the fact that Ethiopian has been in the midst of a political conflict. By taking into consideration the various roles of Ethiotelecom in Ethiopia’s economic progress and prosperity endeavors, the corporation undertakes a wide range of projects and operations, devising strategic plans annually to expand telecom infrastructures and systems, improve quality of service and increase the outreach benefits of various communities in Ethiopia. It has particularly been performing commendably amidst the current national conflict to become competent and preferred telecom service provider in the fast and dynamic telecom market to meet the growing demand for telecom services and infrastructure. The telecom company started the 2021/22 50

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budget year by implementing the three year BRIDGE growth strategy along with the last half of 2020/21 annual plan to realize its aspiration to become a preferred telecom operator among customers and partners. To this end, it has carried out extensive improvement and reform activities that will potentially enhance customer experience and satisfaction. These reform activities include deploying new and enhancement of infrastructure and systems, service availability, quality and affordability; effective resource utilization and enhancing financial capacity, leadership and staff capacity building and empowerment and building reputable brand. As the first half of the 2021/22 budget year comes to an end, Ethiotelecom has been able to record 28 billion ETB revenue which amounts to 86.4% of its intended target and a 6.7% increment as compared with last year’s first half year plan. This feat was attributed to network optimization works to enhance customer experience and satisfaction by offering 23 new and 19 revamped local and international products and services. The network optimization work was also able to generate 78.8 million USD from international business and scoring 89.3% of the target. Cost optimization strategy was also

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put in place and it has saved over 1.2 billion ETB over the first half of the annual plan. Even though this was an appreciable achievement, 3.67 billion ETB was still lost due to the national conflict as 3,473 BTS were not functional. Restoration works in areas where BTS recovery was possible cost the company as much as 328.9 million ETB but there are still numerous regions remaining including Tigray region where the conditions and status of the corporation’s telecom infrastructure still remains unknown.

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The network optimization work was also able to generate 78.8 million USD from international business. Abyssinia Business Network / ABN / 2022

The total number of subscribers reached 60.8 million thereby achieving 100% of subscriber base target and an increase of 20% from the previous budget year of similar period. The number of mobile voice subscribers reached 58.7 million while Data and internet users was recorded at 23.8 million, fixed services 923,000 and fixed broadband users amount to 443,000. The density of telecom services also reached 58.5%.

financial services. This service, surpassed the industrial trend, and has reached over 13 million subscribers within such a short period and with a total transaction value of 5.1 Billion ETB engaging more than 46,000 agents and over 11,000 merchants so far.

Ethiotelecom is now executing various projects on infrastructure and system capacity expansions and enhancements with the aim of revamping the network coverage capacity and quality of service in 136 cities. At the time of this writing, the expansion of 4G/LTE was completed and the service is already launched in 136 cities. The enhancement of Next Generation Business Support System (NGBSS) was also another area of operation, in which the company was able to boost its Billing and Customer Relation Management Systems and also release different new products and services.

As part of its Corporate Social Responsibility efforts, Ethiotelecom has continued to have a positive impact on society, environment, and all stakeholders. Its community service projects have focused in strengthening communities by targeting the fundamental drivers of long-term development such as education, health, agriculture, environmental protection, greening and beautification of cities. In the first half of the 2021/22 budget year, it has contributed more than 253.4 Million Birr in kind, in service and in cash to address pressing societal challenges. The staff of the corporation has also participated by voluntarily mobilizing more than 14.7 Million ETB for humanitarian works. Also, their material, blood donation and in-service support has been enormous.

“Telebirr” was another provision of Mobile Money business with the aim to meet the country’s growing demand for digital

All the achievements of Ethiotelecom have been met by adverse challenges. The company had to battle with the impacts of

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COVID- 19, the crisis in the North region and as well as in some other parts of the country. These hampering conditions have resulted in service outage, infrastructure damage, compromised project execution, supply chain, increasing operational costs and revenue impacts. In addition, fiber and copper cable vandalism, commercial power acquisition delay and power interruption, many relocation requests, and delay in land acquisition for new sites deployment were among the main challenges. In summary, it can be said that the company’s semi- annual performance for the 2021/22 budget year is appreciable even though the company had to perform well against all the odds posed by COVID-19 and the security issues in some part of our country. The achievement was only made possible because of the commitment of the company’s leadership and employees to make Ethio telecom a preferred telecom service provider, and a forefront Ethiopian pride in continental and global landscapes.

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Ethiopian Origin coffee tasting house

ild coffee invites the diaspora community to taste authentic origin coffee at Wild Coffee. The attractive design of the coffee house along with its exceptional hospitality service by well-trained professionals make the coffee shop stand out from its peers in the business. Wild coffee serves different variety of coffee origins namely; Yirgacheffe, Guji, Limmu, Jimma, Sidama, Nekemt, and wild blend, making it a lucrative place of tourist destination. On the occasion of "The Great Ethiopian Homecoming", the coffee tasting house has prepared a special house blend specifically designed for the Ethiopian diaspora community. It is also one of Addis Ababa's recommended stop over destinations by Ethiopian Holidays. Wild Coffee is delighted and ready than ever before to serve members of the diaspora community in this special event. The coffee house warmly welcomes all travelers during the event and invites participants of this national homecoming to enjoy Ethiopian origin coffee and introduce the rich coffee varieties of Ethiopia to the international community by purchasing export standard roasted coffee in foreign currency, thereby contributing their part to the Ethiopian economy. 54

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ABN By Samuel Teka

ABN 1. Tell us about yourself? I am Samuel Tekleyesus. I was born and raised in Dessie. I attended my elementary and high school educations there before coming to the capital Addis Ababa to attend my higher level education. After coming to Addis Ababa, I joined St Mary’s University to study Accounting and I graduated with a very great distinction. I also hold an MBA degree in finance from Leadstar College of Management and Leadership in collaboration with Ashland University, USA in cross-border mobility education program. Currently, I am engaged in conducting trainings in business, personal, and professional development areas. Previously, I worked as a university lecturer and trade and investment advisor for various embassies and organizations. ABN 2.What is your current profession? Currently, I am a full time business consultant and part time life coach. I work with different companies and organizations by conducting public trainings for individuals and youth groups. ABN 3.How did you get into business consulting and life coaching? The driving force behind business consulting is my educational background. After graduation I was a part time lecturer in my university which gave me the opportunity to read and grow both professionally and personally. I also worked as a full time professional for different companies (Banks, governmental and non-governmental int’l organizations, finance officer) and this 56

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Samuel Tekleyesus Business Consulting and life Coaching

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gave me practical knowledge. Therefore, working in academic institution and other organizations positioned me well to master theoretical and hands-on skills. This motivated me to kick-start my consulting career. I also felt that there is a need to share my life experiences and knowledge with the youth community. For this, I studied online courses that can help me engage in training the youth and went on to become a life coach. ABN 4.Can you mention some of the awards, certification and recognitions you obtained? I received many certifications and recognitions. One of these is the one World Food Program /WFP/ gave me for my training on supply chain and logistics. I am also certified on capital market. A personal development company named Breakthrough also awarded me for my trainings and inspiration. Hope Ethiopia Initiative was also another institution that has given me recognition for similar works. Other than that, government offices, public and private organizations awarded me multiple recognitions and certifications for the work I have done so far. ABN 5.What is the benefit of pursuing such a career? One of the benefits of becoming a life coach and business consultant is that it gives me the opportunity to grow as a person and professional. It is also a blessing to have something to give and the satisfaction that comes with it is something I receive as a reward. It gives me great pleasure to training and consulting companies and individuals to be the best at what they do. ABN 6.How do you evaluate the Ethiopian business sector and its progress over the years? 58

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We are currently living in the information era and the government is looking to digitalize the economy. Knowledgeable and skillful business leaders are at the forefront of the industry, and the government aiming to become competitive in the global market and hence it can be said that business in Ethiopia is performing well. But there is a lot of room for improvement as entrepreneurial ideas and new attempts to start businesses should be promoted and encouraged. This is a gap I observed in the business sector. I hope that with the right vision and commitment, the business sector will realize its full potential if managed well by experts and professionals. ABN 7.What are some of your noteworthy achievements? My biggest achievement is being a life coach, since it enables me to train, teach and grow myself and others. The Ethiopian economy is now bracing to welcome the capital market and equipping myself with knowledge and skills this market requires is an achievement. To this end, I have taken courses and trainings that help me become a certified capital market expert. Being a family man is also another achievement that I am proud of. Another achievement I can mention is my consistency in maintaining a successful path in what I do.

be successful should prepare themselves and as a society the first stakeholder for change is individuals. Others stakeholders are professionals and public figures. The government is another stakeholder that is responsible to create platforms that can help the youth get information and histories that they can learn from. Media is also another responsible stakeholder in growth as they are essential in spreading positive attitudes, thoughts and information. ABN 9.What should the future of the business industry look like to bring about major changes? In my view, opening the capital market will help in planting new ideas and thoughts. However, we should embrace the influence and shock that comes with it. There is a huge prospect for the business

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industry but we should be well prepared and competitive so as to reverse the importexport imbalance to become a major player in the local and continental economy. ABN 10.What do you envision to accomplish in the next 5-10 years? My aim is to be an example for the youth and a source of guidance to find their purpose in life and accomplish it. I am trying to grow every day and in the next 5-10 years I aim to be an impactful person from whom people can get valuable lessons, perspectives and ways in which I manage myself. In doing so, I will be able to impact many lives and change them for the better.

ABN 8.How should different stakeholders involve in changing the attitude and life view of youths in Ethiopia? I believe that change comes from within as people who want to Abyssinia Business Network / ABN / 2022

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