LAND OF ORIGINS
Hosting Hospitality
Seleshi Girma Chief Executive Officer /CEO/
Tourism Ethiopia
2nd YEAR NO 22
Feteh Weldesenbt
Kumneger Teketel
Benyam Bisrat
Yakob Melaku
President of Ethiopian Hotel and Related Service Employers
Managing Director and Lead Consultant of OZZIE International Hotel Project Consultancy
President of Addis Ababa Hotels Owners Association
President of Ethiopian Tour Operators Association
/EHRSE/
ህዳር 2012 / November 2019
Ethiopia 50.00 birr , USA 5.00 $ , Europe 5 .00 Euro , South Africa 25.00 Rand , Kenya 500 Sh ,UAE 10.00AED
/AHA/
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Editorial Team MANAGING DIRECTOR Daniel Tiruneh
MANAGING EDITOR
Renewing
Getachew Alemu
History
EDITOR IN CHIEF Aklile Tsige Zeima Ahmed
FDRE Premier Dr. Abiy Ahmed
Mekonnen Hailu Ketema Kebede Chacha Hiwot Salelew
The hospitality and tourism industry in Ethiopia has reportedly been growing in a crawling rate; but many argue that an alarming rise should have been witnessed in the sector if key stakeholders and government’s commitment had been as the nation’s desire.
CONSULTANCY STAFF WRITERS
Teshome Fantahun
So far the country’s effort in tourism and related development remains nonmoving and willy-nilly. Expected job opportunities from the sector also remain a dream of distance future and the nation couldn’t reap as much fruit as it needs to have.
REPORTER
Josephine Wawira Kamba Anthony Joseph Oduha
Designer Daniel Tiruheh Photo Sol Image
However we have to recognize and acknowledge the attempts being undertaken by the incumbent government to create and develop tourist attractions across the country. One recent development is the construction, restoration and inauguration of the Unity Park that took only six months for completion.
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The Unity Park as its name implies stands as a symbol for unity among the various nations nationalities and peoples of Ethiopia, as a symbol for rich historical, natural and cultural heritages of the nation, as a symbol for source of inspiration to undertake any project in the country. Once a torture and butchery site, the 20 hectares of the palace compound has now got new face for all ages of visitors; this untouched and confined spot was for long period of time a site people never give a look at, and a site where no one was allowed to take pictures around. Despite the various socio-economic and political crises across the country, we have to appreciate this initiative taken by the FDRE Premier Dr. Abiy Ahmed who has significantly contributed to the realization of the five billion birr project, boosting the number of tourist destinations in the capital Addis Ababa in particular and Ethiopia in general. Most importantly, it appears an initiative that provides a onestop tourist service, showcasing the various natural, cultural, historical and political landscapes of Ethiopians over the past 130 plus years. Renewing our past and shaping our future is like killing two birds with a stone; it adds beauty to the site and generates income to the nation. May the Lord open our eyes to unveil lots of our hidden treasures!
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Hosting Hospitality
By Aklile Tsige The tourism and hospitality operation is a lucrative but volatile business. Concerns about its sustainability require utmost knowledge and skills. Practicable philosophies about people, economics, finance, management, culture, and political ideology are essential. Tireless training of the staff, adequate budgeting and investment on technology, comprehensive technology installation and synchronization (interlinking), in premises operationalization of all tech-installations (technology should not be outsourced), stiff fraudulent monitoring and advanced remedy, team-working, branding within a license and positive discourse market competitions are very crucial to run a safe, secured and prosperous hospitality business Many argue that Ethiopia, despite its immense tourist attractions, has not yet benefited from this gift of God; little attention to structured and organized operation hinders the development of the hospitality and tourism business across the country. Nevertheless, there appears to be promising endeavor being undertaken by different governmental and private organizations working on the development of the sector in Ethiopia.Our Editor-in-Chief AklileTsigespeaks to heads of organizations that are playing key roles in the industry. 06 Abyssinia Business Nework
ህዳር 2012 / November
2019
Ethi pia LAND OF ORIGINS
Abyssinia Business Nework ህዳር 2012 / November 2019
Tourism Ethiopia
in Action
Tourism Ethiopia Chief Executive Officer, Seleshi Girma has earned MBA in Int’l Business, MSc in Wildlife Conservation, and PGD in Tourism Management, and has got 14 years of experience in academics teaching, industry advising and government Leadership; he has alsoworked as tourism development advisor for the Ministry of Culture and Tourism, for Addis Ababa City Tourism Bureau Deputy Head , lecturer at the University of Gondar, and consultant for international organizations working on tourism development.
How could you describe the existing condition of tourism in Ethiopia? Ethiopia has many diverse natural and cultural tourist attractions. Unlike other nations in the continent, the country has competitive tourism resources having high potential to attract tourists. Most importantly it is the leading nation sheltering about 12 UNESCO recognized world heritage sites. Consequently, there has been a growing trend in the sector. What are the main activities your organization is undertaking right now? Basically, 4 major things to do as per the mandate given to the organizationi. Facilitating the tourist destination development, ii. Capacity building of the sector iii. Promote and market the tourism resources and build the Image of the country. iv. Conduct researches on any issues of destination development & tourism promotions.. 08 Abyssinia Business Nework
“
We strongly believe that tourism is equally growing in rural areas as it is in the cities. Agriculture is an input for tourism, and tourists love to experience the life in these areas.
ህዳር 2012 / November
”
2019
Seleshi Girma Chief Executive Officer /CEO/
Tourism Ethiopia
How far governments support the nation’s tourism sector? Government is willing to support the sector by; i. Opening up of tourism studies in universities, ii. Provides incentives to import duty free items such as vehicles for tour operators, construction materials for hotels and even restaurants. iii. Enhance the private sector capacity to promote its business through sharing costs with the government, such as with my office. iv. Though very weak, tried to ensure the conservation of heritages. v. It tries to play a role in securing tourist destinations for visitors. Is tourism in Ethiopia different from other countries worldwide? Eventually Yes, i. The tourism in Ethiopia is highly focused on inbound tourism business. Aimed to receive foreign tourists and has ignored the business of sending out potential tourists from home to the outside world or at least
to enhance the domestic tourism for citizens to move around our beautiful country. ii. Most tourism businesses are owned by locals and it is worth to get more experiences to do tourism businesses and reduce economic leakage/money going outs/. iii. Tourism is a new venture, much younger than agriculture & industry. So, requires more support & follow-up to be competitive. Do you take up activities and projects under bilateral agreements with other stakeholders?
ii. Conference tourism iii. Adventure tourism What are the creative strategies you have adopted? We study trends and designed a strategy to focus on; i. To exploit the opportunity from being headquarter of OAU, we focus on MICE. ii. Knowing tourists are
more environment conservation sensitive, we focus on Ecotourism. iii. Knowing have good recognition for Athletics & long distance running, we focus on Sport tourism such as mountain bicycling, the moves of private sector by Haile Gebreselassie in running the Great Run are also a real creative works. iv. Being a hub for 12 million passengers moving via Addis
We do; We have ongoing projects with the World Bank and MasterCard foundation. This is more of designing national strategies to develop tourism. In the future, we are more interested in the private sector. Recently, we are mandated to raise funds, collect levy and intervene in public private partnership/PPP/ projects. What are the major themes you pursue after signing partnerships with other players? We look for a common agenda and set a shared vision. It is following recommendations from past studies conducted by our organization or based on the tourism development policy objectives. Once we set a clear agenda, we make sure we have the right team comprised of different academic & experiences, key stakeholders… We ensure the possibility of monitoring and evaluating the role of each party is as per the MoU or any form of agreement terms. What are the main types of tourism in Ethiopia? There are many forms; I believe the major once are; i. Leisure tourism
Photo Sol Image Abyssinia Business Nework ህዳር 2012 / November 2019
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Ababa, we focus on Stop-over Tourism to let transits to spend few days in our tourist destinations. v. We are also developing a regional tour package as one East Africa region to be more visible in the global market competition. How far tourism impacts Ethiopian cities and regions? Mainly it has an economic impact. Understanding the economic values, cities and regions are involved in the conservation of their heritages, promotion of the natural and cultural resources, also it is a foundation for the launching and expansion of tourism and hospitality business. Does tourism activity boost national economy benefiting citizens? How? It benefits through its multiplier effect; Creating employment opportunity. To establish and run tourism business ventures. Helps citizens to feel proud of its culture and natural landscape being conserved, promoted and visited by tourists. Moreover, it brings Tax for the government and plays role in tradebalance. What are the tourism plans that accompany expansion of economic projects of huge economic scale? To focus on MICE to bring and organize more conferences & exhibitions. To further enhance cultural tourism promotion to mainly scale up the competitive advantage of our country compared to the neighboring nations and maximize the benefits from the UNESCO recognized heritages. Photo Sol Image 10 Abyssinia Business Nework
What áˆ…á‹łáˆ 2012 / November
2019
are
the
main
areas
of
cooperation with economic sector to enable tourism projects in their activities?
travelers /meet the demands of educational tours & foreign backpackers/.
From now on, we are keen to strongly work on PPP modality. This will happen in any of our future destination development and tourism promotion works.
iv. I personally also believe that opening of tourism and hospitality academy is also essential.
How could tourism in the continent benefit citizen in general and youth in particular in operation and management of tourism activity? Actually, tourism is labor intensive and urges more creative employees. Hence, our youth can create new tourism businesses and contribute much to fill the gap of obtaining skilled manpower in the sector. What is the rate of tourism revenues in Ethiopia? According to the data obtained from the Ministry of Culture and Tourism, it brings more than one billion dollar annually. What are the most significant areas of investment in domestic tourism? Indeed, domestic tourism is yet untapped. Howsoever, I suggest the following areas of investment: i. Opening up of specialist tour operators (Niche operators) focuses on designing and selling tour packages targeting local people. ii. Specialized restaurants offering foreign cuisine that meets demands of visitors of different nationalities/. iii. Establish youth hostels to offer reasonable prices for student
“ Domestic tourism is yet untapped
”
What are the most encouraging potentials for business capital to invest in tourism? The continuous growth of the sector, the incentive packages for the industry operators and the willingness of the government to support the sector (if changed in to commitments) are the key promising facts that give courage. Are there any administrative regulations to arrange and control work performance in Travel and Tourism Agencies? The major mechanisms are: i. Licensing tourism businesses ii. Standardization and labeling of services. E.g. hotels using stars. iii. Regular supervision and monitoring of each business. What about promoting and developing eco-tourism or rural (agricultural) tourism? We strongly believe that tourism is equally growing in rural areas as it is in the cities. Agriculture is an input for tourism, and tourists love to experience the life in these areas. Most importantly, we focus on ecotourism, which happens to be developed in nature areas, be it a mountain or desert. Thereby, we get chance to encourage eco-lodges, eco-camping ventures and any ecofriendly businesses in general.
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Hawassa
to Host Hotel Conference Feteh Weldesenbt is President of Ethiopian Hotel and Related Service Employers’ Federation and the PHD candidate in Hotel Marketing ata university abroad. He also serves as General Manager of Central Hawassa Hotel and working in the hotel and tourism sector for a longtime. He is one of the founders of the National Hotels Owners’ Federation, representing the hotel and related service owners at national level for the first time.He speaks on various issues with ABN. How was established?
your
We had a structural and a representation motive to establish the federation. You may be aware that just two or three years ago there was only which association which represents the specific place and there was no any national representation for the hotel and tourism sector. According to proclamation 377/96 and the International Labor Convention 87, more than ten single employers can establish an association; more than two associations can establish a federation and more than two federations can establish a confederation. In the context of Ethiopia the employees established their federation for long term and they have worked to protect their members’ interest strongly. Next to tell you this background, as more associations are established most associations are representing their members in the stages of the negotiations of their interests with the government and the employee delegates. To this end the sector needs its own national representation and the 11 regional and city hotel owners associations have met and established this national federation two years ago and now we all have a national representation and workon 12 Abyssinia Business Nework
“
organization
No doubt it needs more and more improvement on these issues. We heard the surplus of the educated and trained employees in the country.
ህዳር 2012 / November
2019
”
Feteh Weldesenbt President of Ethiopian Hotel and Related Service Employers
/EHRSE/
behalf of hotel and related service owners. How do you describe the hotel industry in Ethiopia? Hotel sector in Ethiopia is an untouched sector and dramatically growing sector when compared to others. When you see the influence of the sector and the attention given to it by the government and the stakeholders, there are more and more works to be done in the sector. Ethiopia possesses all rounded tourist destinations like religious (Christian and Muslim), cultural and natural attractions. The sector has created hug amount of job opportunity for women and youths, it becomes the good source of foreign currency for the national economy. How do hotel investment and tourism go together? It’s no doubt that hotel and tourism go together. Tourism is described asthe movement of people from one part of the world to another; it can be locally or internationally. It means you leave your residence
Photo file /EHRSE/ for some unspecific or specific days. So when you move out from your place you need the basic human needs like shelters, food and recreational activities which you missed at home and expected by your movement. So to fulfill this need the only place you need to have is hotel and related service providers. So if you want to move you need hotels. The other thing is people move from place to place to attend meeting and conferences; at this point the tourism destinations need to have facilities like hotels. Both hotel and tourism are inseparable. Many argue that the hotel industry is saturated as the number of tourists visiting the country is on the decline. What’s your impression on this?
I don’t agree with this. As you know most of thehotels which are appropriate to tourists are found in Addis Ababa. When it comes to hotels around the tourist destinations, it can be said that there are insufficient hotels. And also the number of expected tourists is not as it’s required; this may be due to different factors like the advertisement strategy being implemented, we need to bid and bring different MICE events which have high number of participants. Even we should work to unleash the potential of the number of population we have by promoting the local tourism.
Do you believe that government’s policies and strategies are conducive for hotel and tourism sector? I can say yes with some limitations. As you may be aware of the fact that the government considers this sector as a priority sector through the provision ofincentives like duty free privilege, tax holiday, land for hotel projects, promoting the country tourist destinations by high level of the leaders and the like. As a country we are still not capable of providing proper and quality hotel finishing materials and equipment.So this should be taken into consideration for hotel projects; we believe that some people abuse the privileges given by the government. We stand with government to avoid these issues.
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What are the challenges the sector faces this time around? There are so many challenges. The first one is the government and the leaders do not well understand the sector. The hotel and tourism sector has great potential in creatingjob opportunities, and generating high foreign currency source. The others challenge is lack of getting foreign currency for purchasing finishing materials as well as the deteriorating peace and security in some part of the country. Moreover, at sectorial level we are not working together as a private sector. Our federation has been creating platform to bring about change in the sector. What about the prospects ahead? We are working to solve those challenges and to use the opportunities. As you know we have organized the 1st National Hotel and Tourism Conference in collaboration with the Ministry of Culture and Tourism. This conference aimed to discuss the position of this sector by comparing with other countries and expected stage with the government and the partners. The conference was so successful. We raised different questions and recommendations to the government by considering the sectorial challenges and the government was represented by the deputy Prime Minister, Ministers, Regional Presidents and City Mayors. Tell us briefly about the upcoming the Hotel and Tourism conference to be held in Hawassa?
Photo file /EHRSE/ 14 Abyssinia Business Nework
áˆ…á‹łáˆ 2012 / November
2019
The pushing factor and plan to organize the hotel and tourism conference is the declining of the hotel and tourism activities in Ethiopia, which is mainly due to different unrest and lack of peace following the reform in the country. As well known lack of peace firstly affected the hotel and tourism sector. It aims to motivate and to witness that the cities are peaceful and comfortable for tourists by rotating the conference to Hawassa,Bahir Dar, Mekele and Oromia
following the Addis Ababa conference. On November 1-3, 2019, all star hotel owners, tour operator’s owners, consultants, hotel operators, high level government officials and the like will be in Hawassa to attend the conference and undertake different social activities. On this conference questions are expected to before warded to the government and responses will be given to participant; there will also be presentations on different issues; there will be open discussion with high level government officials. It will be the most memorable experience for the sector owners and partners. For this, the regional government and the city administration are working closely for the success of this conference. What’s expected from the conference? Many good things are expected from the Hawassa conference. Firstly, it activates the city hotel tourism activity that has been stagnant due to instability, and to show how peace and stability is restored in the city so that the city is ready for tourist and MICE activities. In the meantime hotel owners from all corners of the country will motivate hotel owners in Hawassa and share their experiences. It will create the socialization within the owners. We are following the official response from the specific Ministries. What is your general assessment on the quality of manpower and technology
“ One of the
challenges of the hotel sector is lack of establishing reliable and well-designed records.
”
used by hotels and tourism sector players? No doubt it needs more and more improvement on these issues. We heard the surplus of the educated and trained employees in the country. But when you come to the reality there is a shortage of employees in the sector. When you see trained employees, they have no exposure for what they do. The training focuses on theoretical aspects; there are no practical trainings because of shortage of infrastructures. In this regard hotel owners should cooperate with training institutions in providing practical trainingopportunities. Can you supply data on current number of hotels, rooms and beds in Ethiopia as a whole? One of the challenges of the hotel sector is lack of establishing reliable and well-designed records. Our federation is planning to get detail information of 1-5 star hotels in the country in 2012 E.C. and it will continue in other. So instead of giving unconfirmed data it’s
better to wait and release the exact one in the near future. How do you describe the relations you have with concerned government organs? Frankly speaking, there was no proper and good relation with the government until the national federation was established. All go here and there alone and the voice of the sector was not strong. After the federation was established the sector has begun to be well represented at the national level and work closely with the government and with partners. One of the witnesses for this is, organizing the 1st Hotel and Tourism Conference with the ministry. And also the hotel rating was conducted with us and we represent the owners in star-rating committees; we were involved in every activities of the government which were focusing on hotel and tourism sector. In sum, we have established good communication with the governments. Anything you want to add? We would like to invite all owners in the sector to be a member of the federation and to strongly project our voice. If we stand together we can make a change to sector. We should be together for the development of the sector. Taking this opportunity, I would like to thank the Ministry of Culture and Tourism especially to the Minister H.E Dr. Hirut Kassaw and all staff for their unreserved support to stand with us for the sectorial development. I also would like to thank the committee of the conference. And also we thank you for you giving a chance to express our ideas and wishes. Together we make the difference.
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MICE/Meetings, Convention Bureau and International Hotel Investment : New Approach The term “MICE” in the context of travel is an acronym for Meetings, Incentives Travel, Conferences/ Congress and Exhibitions/Events. The MICE market refers to a specialized niche of group tourism dedicated to planning, booking, and facilitating conferences, seminars, and other events, which is a big money maker in the travel industry. The acronym has slowly been falling out of favor in recent years, as some industry professionals hope to move away from the affiliation with rodents. Instead, many now refer to this niche market as the Meetings Industry or Events industry in tourism. However, using MICE to refer to this industry is useful in that it encompasses every component of this particular travel market. Whether you’re looking to organize a group outing for your company’s employees (incentive) or you want to organize a big event focused on the latest innovations in your field (conference), MICE travel agents can help you book your itinerary. Kumneger Teketel - Managing Director and Lead Consultant of OZZIE International Hotel Projects Consultancy , Award Winner of African Tourism Legend 2018 & MICE ICON 2017 has recently been appointed by concerned government body as Director of Addis Ababa Convention Bureau for the purpose of establishment phase which is currently under Tell us about the recent Exhibition of 8th Hotel Show Africa 2019 Hospitality and Tourism International Investment Tradeshow OZZIE have organized at the Millennium Hall. With all challenging environment, we try all our best level and unexpected issues always create major problem especially 16 Abyssinia Business Nework
convincing International investors . Honestly we faced big loss in connection to external challenges and supports. Similarly, we faced serious damage and same happened on others international expo and forum organizers. We’re tryed to communicate the concerned bodies and I hope they understood the issue and take necessary measures.
ህዳር 2012 / November
2019
Kumneger Teketel Managing Director and Lead Consultant of OZZIE International Hotel
How do hospitality and tourism stakeholders view the concept of MICE? Regarding the issue of MICE or Meetings Industry , 6 and 7 years back, no one was familiar with the concept and I personally faced challenges to create awareness among the general public and concerned authorities. As a consulting firm, and voluntary organisation to support the nation’s vision in connection to tourism, we try to take some analysis on challenges and catalize the sector to guarant the return on investment of some of International Standard Hotel Projects and upcoming Convention Centres. On top of that , nowadays MICE or Meetings Industry is a serious agenda of the government and all stakeholders. This is Big Step. Offcource we need to create deep understanding through education, forums and practical actions. My Organization stands till on MICE industry movement which has not
yet begun with deep practical actions . Understanding is the First step. The future of tourism business in Ethiopia depends on in-depth understanding of the sector and commitment of true players in the sector. We’re witnessing on some important steps these days which was looks encouraging like establishing Addis Ababa Convention Bureau and Ethiopian MICE Tourism strategy . Personality, I will try my level best to push the sector in advanced way. With your continued and relentless effort, you’ve managed to see the establishment of the Addis Ababa Convention Bureau at a Capital City level. What does it have to do with hospitality and tourism? Honestly, Addis Ababa City Administration has recently taken the first initiative. This is an important milestone for MICE Tourism. Once, the Bureau efficiently functional, Our city will enjoy and benefit from the sector especially in hunting International meetings and exhibitions, controlling and monitoring the quality of the meetings and events, handling proper information and securing foreign direct investments especially securing measurable and reliable source of Hard Currency. On the other hand, at the National level, Ethiopia needs strong Ethiopian National Convention Bureau at a Federal level. I hope this will happen soon. Establishing the Bureau only is not the final goal, rather powerful, active and trained Ethiopian team should be on board. The fruit will be realized soon. We have learnt that you serve and head the Addis Ababa Convention Bureau as a volunteer at the Capacity of Executive Director; do you believe you would properly manage the center without any payment? My plan and appointment is not to run
bureau permanently , rather to establish properly and handover to a permanent team that to be assigned by the Administration. I personally believe that all Professionals in different sectors should contribute something to the his beloved Nation as a Volunteer. It costs me too much however, I should sacrifice my time and benefit somehow. I hope the main Bureau will run properly in less than 6 months as per our master plan we set. Then we can support the Bureau at higher level.
working on International Hotel and Resort Projects and develop New Concepts. How many Projects are on Pipeline and how do you see it?
My vision is to put Addis Ababa City as one of the Top 3 MICE Tourism destinations in Africa in less than 3 years.
OZZIE International Hotel Projects Consultancy is one of the leading consulting firms in Ethiopia, especially dealing with international chain hotel projects and development of new Concept for MICE Tourism. We are handling now over 40 hotels and processing over 28 International Hotel Projects on pipeline that are secured. As a nation with other leading consulting firms, we secured over 45 signed International Chained Hotels and Resorts Projects. In connection to Technology transfer, development of Human Capital and creating platform to use the resources by local Hotels, it will create big impact on the Sector in a few years. OZZIE also has lots of conversion or rebranded local hotels to international chain brands that will give them a leverage to join international market. On top of that we submitted other International MICE destination project proposals to the concerned body . We will officially announce such projects soon.
What exactly does the country need to unleash its potential in the hospitality and tourism sector?
What about the level and quality of manpower and technology in achieving the objectives of MICE and Hospitality Sector?
Definitely Education and Exposure is vital. We should take some best practices from advanced countries. Hospitality is a dynamic business model than other sectors. As a nation, Professionals should be on board to use the potential of our country. OZZIE Consultancy is strongly
That’s why I mentioned education is the key element. Universities should start programs on specific subject. Using proper latest technology benefits the sector. So Education, Exposure and Technology support Ethiopian Tourism Sector to advanced level.
What are the challenges to go forward with the Challenges of Bureau? Actually it is not a challenge in negativeway. We set up action plan that will solve the “Challenge” . I hope the Administration will take it seriously and with favourable environment, we can handle the Projects in proper manner. What is your vision concerning the Bureau?
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AHA: Seeing Hospitality
Academy
Benyam was a primary driver in the restructure of the Addis Ababa Hotels Owners Association/AHA/. He serves on the board of AHA as a chairman. Studying Corporate Finance and Business Management at York University in Canada, Benyam returned to Ethiopia to head the hospitality division of Jupiter Business Group in 2006. Currently, the group manages two hotels, but it is developing numerous Coffee Retail Shops throughout the continent under the hadero brand. Tell us about the Addis Ababa Hotel Owners Association? Our association was established in 1997 E.C as a non-profit employers’ association under the name Ethiopian Hotel and Restaurant Employers’ Association. The Founders’ goals were to establish an association that would support the industry with high quality service and product offerings. Due to the rapid growth in the sector over the past decade, the association felt the need to renew itself to meet the growing demand and needs of its members and the city. This’s why we reinvented and rebranded ourselves in 2012 E.C. Today, the newly rebranded Addis Ababa Hotel Owners Association (AHA), is governed by a seven-member board of 18 Abyssinia Business Nework
“
If we are truly talking about transforming our tourism, we have to have exceptional accommodations, not just here in Addis, but throughout the country.
ህዳር 2012 / November
” 2019
Benyam Bisrat President of Addis Ababa Hotels Owners Association
/AHA/
directors and employs a-12-member fulltime team. Our association has 125 star rated member hotels and we represent the member hotels’ interests in Addis Ababa on various public and private platforms. Can you provide data on the number of hotels, rooms and beds in Addis Ababa? The hotel segment in Addis Ababa is growing exponentially. In the past decade we exhibited an opening of one brand new hotel every month in Addis and expect another 100 plus hotels coming into the supply by 2025. Number of rooms is set to double to 20,000 keys by 2025 G.C from the current 10,500 as well. So evidently, we are getting quite good at growing the supply. Are these all local developers? Growth is coming from both local and international players. We are seeing existing local hotel owners expanding their portfolio holdings by adding new properties. But also new local investors are coming into the sector and most of the recent local and global international developments are a result of these initiative.
Photo by Daniel Tiruneh “Homegrown hotels need to invest on training and development and work on empowering their team as this is the deciding factor in determining who will be the survivors of this industry going forward.” Many argue that the number of hotels is higher and the majorities don’t have business as they expect. What’s your impression on this? We
as
an
association
are
contentiously faced by this imbalance and we have been working on demand creation for quite some time now. So supply is definitely outpacing demand and we could do a lot more to sustain and support the currentdisparity. As an association our main objective is to promote Addis Ababa and Ethiopia as a destination. Thus, to this end we are currently participating in many international MICE (Meetings, Incentives, Conferences/
Conventions, Expo) exhibitions, to attract and bring in events that can cater to the rising appetite. And we believe Addis Ababa, as the ‘medina’ of the Continent, has the ability to be more competitive in the African meetings industry as a result of its increased trade and economic growth, political stability, and of course, growing infrastructure. What about the lack of quality hotel rooms in the market? Is service standard of the local hotels up to par with the global competition?
Abyssinia Business Nework ህዳር 2012 / November 2019
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The lack of quality had initiated the current boom and this has attracted global players to enter and leverage their respective brands. Currently, Addis Ababa has more than 30 global international hotels under development with over 5,000 numbers of keys. And these figures do not account locally-owned, independent properties under construction or in the planning. So definitely, service is improving but there is always room for improvement. In your view, do you think global brands are a threat to local independent hotels? Not in my view, as long as they 20 Abyssinia Business Nework
are here to play fair game, transfer knowledge and ultimately add value to the development of our country. We can absolutely coexist and grow the pie together.
empowering their team as this is the deciding factor in determining who will be the survivors of this industry going forward.
What is expected from local operators to thrive in the current market?
How are you assisting member hotels on this?
We need to continue to focus on service and become more strategically service oriented and guest focused than any of our competitors. I could not have stressed this more; however, we local hotels need to work on elevating our offerings and service standard immensely. Homegrown hotels need to invest on training and development and work on
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Generally, not having a welltrained human capital in the service industry has been the Achilles heel of the Ethiopian tourism and we have been trying to address it in a short and long - term manner. We have been offering several short-term trainings, for various department heads and general managers to manage the gaps. However, mid to long-term strategy is a formation of full-fledged of a
hospitality academy in partnership with the local government. “If we are truly talking about transforming our tourism, we have to have exceptional accommodations, not just here in Addis, but throughout the country.” When do you expect the academy to be built? The establishment of an academy of this caliber represents a significant, multi-million dollar investment. We are forging for a publicprivate investment partnership arrangement. The association will take a lead role by raising up to 50% of the overall investment as a show of commitment, with government matching the raised funds and allocating appropriate size plot for construction. Why public-private? It is a preferred vehicle because it allows for such initiative to be a possibility, while ensuring efficient timeline for completion. This model will also allow us to concretely respond to the country’s need for high quality hospitality education needs. Further, the industry is now an important source of employment and has consequently been identified as one of the avenues to end poverty. What strategies and directions do you set to push forward in the sector? As a board member of the Tourism Board, we work with other private and public sector stakeholders in championing the Ethiopian
Next to Oil, Coffee is the second biggest commodity in the world today and over 3 billion cups are consumed daily Tourism cause. Currently we are advocating the government to change the current incentive scheme that treats investors that are willing to invest in our
destinations in the same manner. If we are truly taking about transforming our tourism, we have to have exceptional accommodations, not just here in Addis, but throughout the country. Unfortunately, the current boom, for most part is only here in Addis and this is not helping our cause by itself. Going forward, the regional governments need to put forward an incentive scheme that is worthwhile of the investor’s effort. Lastly, tell us a bit about your business group? Our Hospitality group was founded a little over a decade ago with a passion and purpose to build an organic strong African brand against the backdrop of other long existing multinational players. As part of our growth strategy, we have been exploring opportunities in the coffee sector and we have now officially launched a coffee flagship brand for the Continent. I really believe that we have a great value proposition, and it is t time that we as a private sector and a country take a leading role in commercializing coffee, not just as green coffee, but as value-added commodity. Why Coffee and what is the inspiration behind the brand name hadero? Well, how much time do you have? [..laughing]Next to Oil, Coffee is the second biggest commodity in the world today and over 3 billion cups are consumed daily. As the originator of coffee and largest exporter of green coffee in Africa, we are on the bottom of the supply chain and we at hadero aspire to change this for the better. Hadero is a small town located Southern Ethiopia and our brand is inspired by the craftsmanship of the remarkable stallholder coffee cultivators of the region.
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ETOA: Gaining Momentum
Yakob Melaku President of Ethiopian Tour Operators Association
/ETOA/
Established in 2003, the Ethiopian Tour Operators Association (ETOA) is a non-for profit organization representing Tour Operators based in Ethiopia. It envisages the nation’stour and travel sector become a major economic sector that plays its important role in economic and social development of the country and Eastern African Nations through cooperation and sustainable tourism practices.Yakob Melaku ETOA Head reacts with ABN questions. What are the objectives of the Ethiopian Tour Operators Association /ETOA/? ETAO is established with the following main objectives: • To protect legitimate interests and benefits of its members • To contribute towards improving tourism services and products to international standards • To help build good relationships among stakeholders deployed in the tourism sector • To promote tourism destinations and resources to the global market and by so doing to build the national image of our country • To build relationships with domestic and international associations and tourism-related institutions. • To learn from best practices around the world and strive 22 Abyssinia Business Nework
to include these practices in policies and legal frameworks of our country. • To create tourism awareness, among decision makers tourist destination communities and the general public. • To conduct research and development activities in the travel and tourism sector. • To continuously build the capabilities of members. What is the most rewarding part of being a Tour and Travel Association? The most rewarding part of being a Tour Operators Association is the Association serves as an information and communication hub among governmental and non-government institutions at regional, national and international levels in order to promote and develop the tourism
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industry. The Association communicates with a lot of stakeholders in its efforts to get solutions to pressing problems of the industry. In addition, It offers opportunities to promote tourism resources of Ethiopia and that of East Africa. It also serves as an effective platform to support and advise policy makers. “We have established links with tourism Boards of Kenya, Tanzania, and Dubai. We organized B2B events in Addis Ababa during the last 2 years. In addition, our Association was invited to attend B2B events in Zanzibar.” How do you describe your relationship with concerned bodies like local cultural and tourism offices and the like? Our relationship with Federal Tourism authorities can be described as good partners who are striving to change the situation of the travel and tourism sector. We also work closely with Culture and Tourism Bureaus of the Regional States and other tourism related institutions. What are the main challenges tour and travel agents face at the moment? Currently the Travel and tourism sector of Ethiopia is faced with numerous challenges.
Among the challenges, taxation on tour operation activates, utilization of duty-free vehicles imported to offer services to tourists, existence of poor infrastructure at tourist destinations, weak policy and legal framework, lack of organized tourism data, undeveloped domestic tourism, absence of electronic payment systems and lack of competitive human rescue are among the challenges faced by the sector.
enormous since tourism has been recognized as one of the main economic sectors by government recently. Ethiopia’s tourism resources are very huge compared to other well preforming countries. Do you have strategic plan that paves ways to better improve the operation of the agents?
Yes, we do. The plan encompasses four major pillars: advocacy, marketing and promotion, capacity What are the efforts your building and networking. All our association exerted to solve those activities are anchored on the four challenges? What about the strategic pillars. prospects ahead? Do you have links with related Our Association has been exerting international institutions? If so, a lot of efforts to address the above who are they, and what do you do issues. It has been communicating with them? with various ministries and government authorities in its efforts Yes, we have established links with to mend solutions to longstanding tourism Boards of Kenya, Tanzania, problems. The prospects are and Dubai. We organized B2B
events in Addis Ababa during the last 2 years. In addition, our Association was invited to attend B2B events in Zanzibar. The Association and its members attended at the B2B event. In Addition, Dubai Tourism Board conducted three B2B events in Addis Ababa and they invited our Association and its members to attend at a familiarization trip and B2B forum in Dubai. The Association and some of its members attended at the FAM trip and. B2B. We have also established links with Kenyan, Indonesian and US Tour Operator Associations. Describe the relations you have with hotels at regional and national levels? Our tour operators work very closely with hotels, lodges and restaurants situated all over the county. We also closely work with hotel Associations at national and regional levels.
Photo file ETOA Abyssinia Business Nework ህዳር 2012 / November 2019
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Ethiopian to Resume Flight to Athens
E
thiopian Airlines, the Largest Aviation Group in Africa and SKYTRAX Certified Four Star Global Airline, proudly announces the resumption of its flight to Athens, Greece effective Dec 13, 2019. Ethiopian has resumed the service to the city of Athens after 18 years.Athens marks Ethiopian’s 20thdestination in Europe. Filled with incredible historical sites, Athens is one of the oldest cities in the world and Europe’s historical capital where democracy was invented. The thrice weekly flight to Athens will be operated by the ultramodern B787 Dreamliner.
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Regarding the flight service to Athens, Group CEO of Ethiopian Airlines, Mr. Tewolde GebreMariam, said “We are delighted to return to Athens, Greece with direct services.With our direct flight, Greece will be closer to Africa than ever before and to the rest of our Global network. Athens will serve as a key destination on our ever-expanding European network and offersglobal tourists an opportunity to explore the majestic country. As one of the world’s oldest and historic cities, the city enjoys a high level of tourism from visitors across the world. Hence, the resumption of the service to Athens will help meet the exponential demand from global tourists, as well as provide them with more connectivity options within our extensive global network.” With the inclusion of Athens, Ethiopian Airlines’ international network reaches 126.
Abyssinia Business Nework ህዳር 2012 / November 2019
TRADE AND
DEVELOPMENT REPORT 2019
By Staff Writer
U N C T A D
Seventy-five years ago, in the cool mountains of New Hampshire, the international community came together to forge a new world order with one central aim: to constrain financial markets and empower states in their place. The immediate goals of the Bretton Woods institutions were to deliver full employment, keep trade flowing, regulate speculative capital and prevent imported deflation. The system would promote policy coordination in support of global economic stability and discourage beggar-thy-neighbour policies that could upset that stability, while leaving policy space for sovereign states to pursue their national priorities. Forty years ago, market forces struck back. From the early 1970s, a series of hard economic hits unsettled the post-war policy consensus and triggered political strife. As the decade came to a close, a newly elected British prime minister promised to bring harmony and hope by freeing markets and releasing entrepreneurial energies; and to emphasize that doing so would require a clean break with the Bretton Woods era she instructed her Cabinet colleagues to brush up on Friedrich Hayek’s The Constitution of Liberty. Mrs. Thatcher was joined six months later by a kindred spirit in Washington who – less attuned to the ruminations of the Austrian school of economists – succinctly captured the shifting ideological mood by proclaiming that “government is not the solution to the problem, government is the problem”. A coterie of academics and think tanks, on both sides of the Atlantic, were ready at hand with market-friendly policies for every economic problem, both real and imagined. Theirs was a simple message: that everything had a price and, if markets were free to determine that price, prosperit and social harmony would follow. The debt crisis of the early 1980s provided an opportunity to spread the message to the developing world, joined shortly thereafter by the collapsing centrally planned economies of Eastern Europe.The attrition of the public realm went global. But while economic ideas were the spark plug of the neo-liberal project, the newly liberated financial sector was its engine. Setting capital free from the constraints of government regulation and oversight opened up rent-seeking opportunities for an energized banking sector, while a new set of trade rules (covering financial services, investment and intellectual property rights) extended greater protection to footloose capital. Alan Greenspan, a one-time disciple of neo-liberal scribbler Ayn Rand, had no doubt that the expansion of crossborder finance along with a new generation of innovative financial products would turbocharge the global economy by improving the worldwide allocation of scarce capital, unbundling and dispersing risk and boosting hedging opportunities. This was, he claimed, Adam Smith’s invisible hand working at the international level; “unregulated global markets do clear” he opined and, “with rare exceptions, appear to move effortlessly from one state of equilibrium to another”. Things did not turn out quite as smoothly as Greenspan anticipated. Booms and busts punctuated the economic landscape, culminating, in 2008, in the deepest economic crisis since the 1930s, and revealing the darker side of a world driven by private credit creation, underregulated banks and financial chicanery. Prospects for the global 26 Abyssinia Business Nework
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Good times, bad
times
economy are currently shrouded in a fog of international trade tensions and geopolitical disputes. But, the bigger story a decade after the G20 stepped in to contain panic in markets and salvage a battered financial system, is that growth has failed to find a firm footing. The United States is in its longest recovery on record but it is also one of the weakest, and the impact on incomes has been subdued. The pick-up since the 2017 tax cut is fading, with little sign of the promised investment boom. Elsewhere in the developed world, the pick-up has been even more short-lived. The eurozone is slipping back towards stagnation, with the German economy showing clear signs of fatigue; and while Brexit is an unwanted distraction for the entire European economy, the United Kingdom looks set for a particularly traumatizing 2019. There is a good deal of speculation that recessionary winds will blow the advanced economies, and with them the global economy, off course in 2020. Monetary normalization has already been put on hold by leading central banks but there are growing concerns that even another round of quantitative easing will fail to provide the needed boost to overall demand. Whether or not pushing down on the monetary accelerator would again help emerging economies is also an open question. The slowdown this year, 2019, is apparent across all developing regions, with Latin
America particularly hard hit. Talk of “decoupling” and “convergence” which briefly united the chattering and investor classes after the global financial crisis (GFC), as developing (including so-called emerging) economies bounced back quickly, has gone quiet. The BRICS economies, which as a group saw average annual growth over 10 per cent immediately after the GFC, grew at 6.3 per cent last year.
tensions are one likely source of increased friction. Trade has stalled with the weakening of global demand; growth in the first quarter of 2019 relative to the corresponding quarter of 2018 is estimated at just 0.4 per cent. Unilateral tariff increases by the United States, which began in early 2018 on specific products and have subsequently been extended on a broader range of imports from China, have not helped. Retaliation has followed in a number of countries.
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With debt levels higher than ever across the developing world, totalling around $67 trillion, keeping interest rates on hold would ease servicing pressures. But financial markets are fickle and under the wrong circumstances can turn feral; against a backdrop of rising uncertainty and investor anxiety, a flight from emerging markets to the relative safety of the United States could still trigger a self-reinforcing deflationary spiral. Not surprisingly, policymakers everywhere are scanning the horizon for possible shocks. Heightened trade
While the impact to date has been contained, a resumption of tit-fortat tariff increases could prove very costly if combined with a further slowdown in investment. There are other dangerous currents beneath these already troubled economic waters. There is a growing awareness that the dispute between the United States and China is less about tariffs and more about the technological ambitions of a middle-income developing country. Accessing foreign technology helped today’s advanced economies climb the development ladder and efforts to kick that ladder away by further reducing their policy space will face resistance from
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developing countries. This could add to the already diminished levels of trust in the multilateral system, with further damage to global economic prospects. Currency movements are adding to the sense of economic anxiety. These have become much more volatile in the era of hyperglobalization with the financialization of currency markets. The Morgan Stanley Emerging Market Currency Index rose significantly at the beginning of 2019 but fell sharply between mid-April and late May, only to climb again thereafter. Three factors are behind this volatility: sharp fluctuations in crisishit countries such as Argentina and Turkey; the volatility of capital flows to emerging markets resulting from policy uncertainty in the developed countries and weaker growth prospects in emerging markets; and more generalized pressure from the United States Administration to keep the dollar “competitive”. In an international financial system still heavily dependent on a predictable role for the dollar, turning that role long recognized as an “exorbitant privilege” into a source of economic ordnance could bring more destabilizing consequences. An immediate worry for many developing countries is that 28 Abyssinia Business Nework
any sharp loss of confidence in their own currency coming after a rapid increase in external debt could expose them to much deeper deflationary pressures, as has already occurred in Argentina and Turkey. Commodity markets have been on a rollercoaster ride since the financial crisis; these are now in a softer phase, with prices well below post-crisis highs. While depressed demand underlies the absence of price buoyancy in many commodity markets in recent months, medium-term volatility has been influenced by the wide fluctuations in oil prices, by the financialization of commodity markets and by the concentration of market power in a small number of international trading companies. The UNCTAD commodity price index fell from 134 in October 2018 to 112 in December that year, and since then has risen to reach a level in the neighbourhood of 120. Fuel prices drove the fall in the index in the last quarter of 2018, with the index of fuel prices
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falling from 149 in October to 115 in December. The subsequent recovery has been partially on account of higher oil prices affected by sanctions on Iran and partially because of mild buoyancy in the prices of minerals, ores and metals. A spluttering North, a general slowdown in the South and rising levels of debt everywhere are hanging ominously over the global economy; these, combined with increased market volatility, a fractured multilateral system and mounting uncertainty, are framing the immediate policy challenge. The macroeconomic policy stance adopted to date has been lopsided and insufficiently coordinated to give a sustained boost to aggregate demand, with adjustments left to the vagaries of the market through a mixture of cost-cutting and liberalization measures. Ephemeral growth spurts and financial volatility have been the predictable results. But there are deeper challenges ahead that are truly daunting for people and the planet.
Sign
o’
and private financial institutions.
the times
Financial insecurity, economic polarization and environmental degradation have become hallmarks of the hyperglobalization era. These are, moreover, closely interconnected and mutually reinforcing, in ways that can give rise to vicious cycles of economic, social and environmental breakdown. This threat coincides with a worrying erosion of political trust, as income gaps have widened across all countries and the policy agenda perceived as catering to the interests of the winners from hyperglobalization, with scant attention paid to those who have seen limited gains or have fallen further behind. Even after the GFC, the rules of the game that had generated high levels of inequality, insecurity and indebtedness prior to that crisis have remained largely intact, adding further layers of resentment, often aimed against outsiders, and widening political divisions. This breakdown in trust has occurred at the very moment the collective actions needed to build a better future for all depend on a greater sense of shared responsibility and solidarity. The SDGs, agreed at the United Nations in 2015, were designed as a guide to that future. But with their delivery planned for 2030 already behind schedule, frustration is growing across different policy communities and at all levels of development. The perceived problem is a shortage of finance to achieve the scaling-up of investments on which the 2030 Agenda ultimately depends. With government finances burdened by increased debt levels and a fractured politics impeding long-term planning, pushing the financial envelope from billions to trillions of dollars each year will, it is claimed, have to rely on tapping the resources of high-wealth individuals
At first glance the signs are encouraging. Global corporations are sitting on an estimated $2 trillion cash pile, while high net worth individuals have access to more than $60 trillion in assets. The OECD estimates that institutional investors in member countries hold global assets of US$92.6 trillion and while figures for institutional investors in developing countries are harder to come by, estimates for the assets held by Brazilian pension funds exceed $220 billion and some $350 billion for combined African pension funds. Redirecting a relatively small portion of these resources to meet the SDGs should, the argument goes, be able to solve the financing challenge facing the 2030 Agenda. A string of measures, marshalled under the call to “blend” and “maximize” finance, have been proposed that would channel public money into “de-risking” big investment projects while employing securitization and hedging techniques to bring in the private investors. If only things were that simple; the evidence suggests that blended finance fails to mitigate risk and instead boomerangs back to the public purse and the tax payer. In fact, vast amounts of public resources have already been used to save banks (and other financial institutions) that proved too big to fail after employing these same techniques to indulge a frenzy of speculative activity in the run-up to the financial crisis. Moreover, underpinning the vast trove of private assets is a tangled web of financial funds and debt instruments. Channelling a portion of these assets
into long-term productive investment, whether in the public or private sectors, is not a matter of appealing to the better nature of those managing such funds nor establishing a more welcoming environment in which they can do business. In reality, too many governments, at all levels, have for decades been extending incentives and protections to international finance in the hope of boosting capital formation. Instead, they have been sucked in to an unstable financial world geared to short-term trading in existing assets, prone to boom and bust cycles, with baleful distributional outcomes and large debt overhangs that act as a persistent drag on the real economy. Re-engineering financial stocks and flows to support productive investments (whether private or public) will not happen without a fundamental change in the rules of the game. The current global economic environment where austerity is the macroeconomic default option, liberalization the favoured policy tool for affecting structural change and debt the main engine of growth is heading in the wrong direction when it comes to delivering on the ambition of the 2030 Agenda. Accordingly, this year’s Report seeks to make an alternative case for delivering the 2030 Agenda through a Global Green New Deal with a leading role for the public sector.
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Banking on
the public
Banking stopped being boring during the financialized transition to a globalized world, and it also stopped serving the needs of the productive economy. The transformation of banking into a high glamour, high paid, globalized industry came with financial deregulation and a surge of cross-border capital flows. As a result of deregulation, retail banking activities blended with investment activities to create financial behemoths operating with an “originate-and-distribute” business model whereby loans were securitized and a range of financial services boosted the rents they could earn. The resulting shift to packaging, repackaging and trading existing assets created a system in which the bulk of transactions involved other financial institutions, predatory practices became acceptable and contagion effects were aggravated. The fragility of this system was exposed during the GFC as an estimated $50 trillion was wiped off asset values. But the social cost that followed the bailout of banks that had become “too big to fail” was, if anything, even more corrosive. At the same time, the damage to the environment and the cost of mitigating this is becoming more and more visible and is also serving to weld together a broad coalition seeking a new way forward and more responsible practices from the world of banking, alongside other spheres. The 2030 Agenda requires the biggest investment push in history and banks will be called upon to do their bit. Banks can offer the benefits 30 Abyssinia Business Nework
of scale and reach because of their ability to create credit and their modus operandi of forming partnerships with other financiers and investors. But despite the use of taxpayers’ money to bail out the banking system and the recognition that current practices work against them serving the productive economy, serious banking reform has not taken place since the crisis. This is raising new questions about how to make banks work for people and the planet, with growing attention to the potential role of public banking, because it is distinctively different or should be from private banking. The important distinction is that public banks’ goals include social and developmental objectives, and this is the case as much for public banks operating along commercial lines as it is for development banks. They can fulfil these objectives best when operating within an articulated system with other banks and in close alignment with government policy objectives and instruments; however, even where this articulation is lacking,
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recent history shows public banks are expected nonetheless to be able to leap into action. They are the first line of defence in times of crisis when credit becomes scarce, providing countercyclical and additional finance to mitigate the economic effects of a shock. For the Global Green New Deal, the task is more of a marathon than a sprint. Here public banks have another advantage, because they have a more diversified portfolio and broader geographic reach to underserved areas and segments of the economy and (especially development banks) take a longer-term approach. By contrast, private (and especially foreign) banks are known for avoiding such lending as they pick profitable cherries elsewhere. The paradox is that, just as governments are calling out for much more long-term investment, they are at the same time exhibiting little willingness to give their public banks the tools for the task. Banks need to be able to scale up, to lend in the desired directions, and to be evaluated by performance metrics that fit their developmental mandate. However, these three things do not often come together.
initial application as compared to one or even two years for the big multilaterals. While some banks in the North have similarly upped the ante, a lot more is needed in order to meet the vision of the Global Green New Deal.
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The lead shareholders in the large multilateral financial institutions are underwhelming in their support for capitalizing these banks, and continue to divert significant revenues when profits are made rather than reinjecting them into the equity base. Instead, scaling up is being promoted through securitization and balancesheet optimization, which potentially bring a whole new set of problems. Southern governments have been much more willing to take the lead in expanding the role of public banks, in part out of a sense of frustration with the inadequate response from the North. They have established new public banks, and expanded existing ones, scaling up so quickly that even though they only started to become actively engaged since the early 2000s onwards, they have surpassed the older multilateral banks. The stock of outstanding loans made by the China Development Bank was $1,635 billion in 2017, much larger than the total loans by the World Bank (for 2017, the net outstanding loan of IBRD and IDA are $177 billion and $138 billion respectively). Southern-led multilateral initiatives have been just as significant the BRICS countries’ New Development Bank and the Asian Infrastructure Investment Bank have been in operation for just a few short years but are already making their presence felt. These Southern-led
The stock of outstanding loans made by the China Development Bank was $1,635 billion in 2017, much larger than the total loans by the World Bank (for 2017, the net outstanding loan of IBRD and IDA are $177 billion and $138 billion respectively). banks are well capitalized with reliable funding sources, which permits them to have a longerterm horizon and thereby finance long-maturity projects such as infrastructure, which more commercially oriented banks may not be so ready to support. They have also shown speedier response, taking on average six months to approve loans from
Some encouraging noises are being heard from the different levels of the banking ecosystem, including central banks, which may have more space than is sometimes envisaged to resume their traditional role of creating and guiding credit to the areas of the economy where it is needed most. Indeed, central banks played this role in several of the successful examples where countries managed to transform themselves from agricultural to industrial economies. It is only in recent years, under the rubric of “independence”, that the traditional interlinkage between banks and government development goals has been cut. The extent to which governments provide support to “their” development banks is an important factor in their success. Many governments require their banks to maintain high credit ratings typically AAA, even if this is higher than the rating of the sovereign itself. This gives banks two masters: they must please credit-rating agencies and also meet their developmental goals, which by definition include riskier projects. If governments were perceived by credit-rating agencies as being more willing to “stand by” their banks, a more favourable rating would ease their costs of borrowing and free up hundreds of billions of dollars for development lending.
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Ironically, governments themselves are facing falling credit ratings thanks to the entirely predictable failure of the austerity policies that were designed, in part, to please credit-rating agencies’ expectations. This mess reveals once again that the notion of “independence” between governments and the banks they own is an illusion and not a desirable one. UNCTAD has in the past called for a review of the power of creditrating agencies and today’s challenges reinforce this. It is perhaps time to design a new metric for evaluating large public investment projects that more accurately assesses their social and
standard internationally designed regulatory framework adopted by virtually all countries around the world, similarly need to be more flexible. At present they treat all types of banks the same, and hence penalize institutions with long-term or riskier exposures which is the usual terrain chosen for public and particularly development banks. Moreover, although Basel rules are adopted by national jurisdictions, they also affect multilateral and regional development banks, at least indirectly.
possible route is to align better with Sovereign Wealth Funds, which are currently holding at least $7 trillion of assets by recent estimates, but typically not directed towards developmental lending.
The banks that suffer most are the smaller regional banks that end up holding too much capital for the total of loans they provide. At the same time there is the paradox that, even as regional developmental needs are so severe, the banks that serve such regions are often dismally small. There is, therefore, an urgent need to find ways to capitalize such banks so that they can support national country needs and also regional projects. One
ll this requires rejection of the notion that markets always know best. There is a growing acknowledgement of the idea that governments should underwrite risks, staunch leaks and fill gaps left by private banking but public banking in the past has proved to be catalytic and game-changing; the current situation offers opportunities to play this role again.
Others include increasing the pool of resources by bringing in new countries as shareholders; or seeking a more integrated approach between such financial institutions and regional capital markets, whose potential has, to date, been underexplored.
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economic dimensions, rather than being based on narrow financial measures and ideological biases. What is also important is the wider regulatory environment in which public banks operate. Global rules need also to be refigured in light of the new needs. The need to review trade and investment agreements that bind the ability of policymakers to use capital management policies was suggested above. The Basel norms and rules, a 32 Abyssinia Business Nework
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Nokia to revolutionize Technology By staff writer The renowned Finnish multinational telecommunication, informationtechnology,Nokia Corporation, and consumer Electronics Company signs Memorandum of Understanding (MoU) with Ethiopia’s top Technology Institutes. The Company signed the MoU with the Addis Ababa Science and Technology University (AASTU) and Addis Ababa Institute of Technology (AAiT) to partner in promoting digital skills and innovation in Ethiopia.
“We are excited to support the universities in Ethiopia in their objectives to play a leading role in setting standards in the quality of engineering education, research, innovation and business incubation. We look forward to helping students acquire the necessary skills in the latest technologies, such as 5G, cloud computing and data analytics.”Daniel Jaeger, Head of Central East and West Africa Market Unit at Nokia, said. Dr.-Eng. Getahun Mekuria, FDRE Minister of Innovation and Technology and Ville Skinnari, Finnish Minister of Development and Trade witnessed the signing ceremony of the MoU.
The MoU was signed by Dr. Dereje Engida, President of AASTU, Dr. Engineer Isaias Gebreyohannes representing AAiT and Daniel Jaeger, Head of the Central, East and West Africa Market Unit at Nokia Corporation.
On the occasion the Ethiopian Minister briefed Skinnar on the broad activities being undertaken in his country in the innovation technology sectors.
According to the agreement, Nokia Corporation will arrange training on the latest technologies and experience sharing programs for both AASTU and AAiT. The collaboration will support the students in acquiring the right competencies and the necessary skills to succeed in a fast-changing labor market.
Ville Skinnari for his part pledged to invite Finnish investors to take advantages of the investment opportunities in Ethiopia. It’s to be noted that Headquartered in Espoo, in the greater Helsinki metropolitan area, Nokia Corporation was founded in 1865.
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Solar: Ethiopia’s
Future Energy By Samuel Tekleyesus (The writer has MBA in Finance; he’s a lecturer, researcher and business consultant)
Ethiopia has an abundance of potential renewable energy sources that, ifpursued, could significantly change the nature of Ethiopia’s current energy sector which heavily dependson the use of traditional source towards a future of country wide electrification.Ethiopia’s Growth andTransformation Plan (GTP)considers renewableenergy as one of theleading new drivers of economic growthin the country.Under GTPII, the countryplans to increase the current electricity generation capacity to 17 GW by 2020. As per the report of the Ministry of Water Irrigation and Electricity, in Ethiopia 90 % of the population use traditional biomass for cooking and 70 % use kerosene for lighting.According to sources, around 45% of Ethiopia’s populationcurrently has access to electricity grid. To bridge thegap between abundant resources with the needs the country launched theNational Electrification Program(NEP) in 2017 in collaboration with the World Bank by outlining a plan to reach universalaccess of electricity by 2025. In 2018 the Ethiopia ElectrificationProgram (ELEAP) was launched by thecountry’s government together with theWorld Bank to directly support the NEP.For the millions of people living in remote rural areas of Ethiopia who lack access to the power grid or cannot afford electricity, solar energy can be an important first alternative on the energy access basket. Ethiopia’s power generation mix consistsentirely out 34 Abyssinia Business Nework
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of renewable energysources. The country currentcapacity is 4.5 GW excessively dependent on its hydropower plantspower generating capacity which came from 14 hydropower plants, whichaccounts for more than 85% of the total capacity. Other large hydro plants are also currently under development including the massive Great Ethiopian Renaissance Dam (GERD), the Koysha Hydropower project and the GenaleDawa III project.Other thanhydropower, the country also has threewind farms, collectively generating 324MW, and a few diesel plants, generating143 MW, with the rest being generated bysolar power (14 MW), geothermal power(7.5 MW) and other renewables. Based on the Ministry of Water Irrigation and
Electricity, there is an abundant solar irradiation which can be utilized as source of Electricity. The national annual average irradiance is estimated to be 5.2 kWh/m2 /day with seasonal variations that range between the minimum of 4.5 kWh/m2 /day in July to a maximum of 5.6 kWh/m2 /day in February and March with a higher annual average irradiance well above 6 kWh/m2 /day in rift valley regions, Western and Eastern lowlands of the country. Even thoughover the past five years Ethiopia’s solar PVcapacity
has almost tripled, the solar energy sector in Ethiopia is still in its earliest stages of developmentrepresenting 0.3% of the country’s totalenergy capacity. Ethiopia has prioritized construction of large-scale solar projects in the regions of Afar, Somali, Oromia and Tigray, onPublic Private Partnership (PPP).In 2016, the state-owned Ethiopian Electric Power (EEP) launched the country’s first solar tender for the 100 MW Metahara and Italian energy company
Enel renewable energy was selected, the constructionis scheduled to come online by the end of 2019. The second tender was launched in 2017 for the constructionof two 125 MW solar facilities in Gad and Dicheto which a Saudi Arabia’s Power firm, ACWA has won it with the record low tariff rate in Africa. In January 2019, the newly formed Public Private Partnership (PPP) Board has approved six solar energy projects at a cost of USD 795 million with capacity to generate some 750 megawatt of electricity.
Abyssinia Business Nework ህዳር 2012 / November 2019
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Capacity (MW)
Project Name
S/N
Estimated Project cost
Region
(USD Million)
1
Metehara Solar
100
120
Oromia
2
Gad Solar Scale (Phase I)
125
150
Somali
3
Dicheto Solar Scale (Phase I)
125
150
Afar
4
Mekele Solar
100
120
Tigray
5
Humera Solar
100
120
Tigray
6
Welenchiti Solar
150
165
Oromia
7
Weranso Solar PV
150
165
Afar
8
Metema Solar PV
125
150
Amhara
9
Hurso Solar PV
125
150
Dire Dawa
Source: Own compilations from different sources In conclusion, Ethiopia has a large population with a rapidly growing economy and very low level of electrification. Ethiopia is doing very well withregards to generating electricity throughhydropower butthe current capacity is extremely small for a country with such rapidly growing energy demand and needs to be supported by alternating sources such as wind and solar.Underlying solar energy with a potential to be used in both small- and large-scale electrification measures, currently it only takes up a small part of Ethiopia’s power mix. On the other hand, the country’s ambition on massive industrial complexes and agricultural farms create a big opportunity for investors 36 Abyssinia Business Nework
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as the government considers private and foreign direct investments in renewable energy sector is critical to the success of the plan.This shows a large potential to invest significantly in energygeneration and transmission.
ህዳር 2012 / November
2019
The high degree of solar PV potential in Ethiopiaoffers an extremely profitable opportunity for investors in the development of solar PV projects.
eTrade for Women masterclass For the masterclass, Ms. Angelovska will be joined by instructors from companies such as Booking.com and Seos.si. Sessions will cover the ins and outs of growing an online business, such as search engine optimization and social media marketing, and how to turn raw data into digital intelligence. But the participants will also learn how to voice their concerns to government officials so that new policies affecting e-commerce make it easier for women to do business online. “Overall, the eTrade for
Celebrating the value of cotton You are rarely too far from something made of or containing cotton. In clothing, linens, furniture, mattresses, vehicles, dollar bills and much more, cotton is always around us. It’s the most abundantly produced natural fibre in the world, yet we rarely celebrate it. That is set to change on 7 October, when UNCTAD and its partners will mark the first World Cotton Day in Geneva, Switzerland, in a global celebration of cotton’s
Women initiative wants to promote women’s digital economic empowerment,” said Torbjörn Fredriksson, in charge of UNCTAD’s ICT policy section. “One way to do this,” he said, “is to inspire more women digital entrepreneurs. The other is to give women digital entrepreneurs a bigger voice in policymaking.” UNCTAD is organizing the masterclass with the finance ministry and the Macedonian E-commerce Association. The association’s secretary general, Victor Stojkoski, says they believe that a better future for North Macedonia can be created “by embracing digitalization and becoming a smart society.” In integral part of building such a society, he says, is helping women entrepreneurs build the
contributions to people’s lives, both as a fibre and a source of livelihood. “Cotton’s many industrial applications make it an ideal foundation for upgrading and diversification strategies that allow producing countries to benefit more from trade,” UNCTAD Secretary-General Mukhisa Kituyi said. Incomes for 100 million families
digital knowledge and skills they need to succeed. The masterclass in North Macedonia will be followed by similar sessions in China, Côte d’Ivoire, Indonesia, Iran, Mexico and Rwanda, delivered by the other six UNCTAD eTrade for Women advocates. The eTrade for Women initiative is financially supported by the Dutch government. Approximately 26 million farmers grow cotton, in 75 countries. Growing cotton and processing it into, for example, textiles and apparel, provides jobs and incomes to approximately 100 million families worldwide. Cotton is a drought-resistant crop, providing reliable income to farmers in areas where agriculture is under serious threat from climate change and/or recurrent drought. Cotton occupies just 2.1% of the world’s arable land, yet it meets 27% of the world’s textile needs. It is also one of the most important traded commodities, with an annual traded value of approximately US$8 billion. The cotton value chain is long, with multiple processing steps, leading to investment, job creation and industrial upgrading.
Abyssinia Business Nework ህዳር 2012 / November 2019
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Africa: Upcoming
Mobile
Market
Credit: Josephine Wawira
According to a Mobile Report for Africa released by Jumia, Africa’s leading e-commerce platform, the continent’s real output growth is expected to reach 4.1% by the end of 2019; from an estimated 3.5% in 2018. The growth is expected as a result of improvement in macroeconomic conditions in the continent.
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In 2018, Africa had 255 million smartphone connections, which is equivalent to 36% of the total population. This is against a 444 million mobile subscriber base in the continent by 2017. By 2025, they are expected to be approximately 690 million smartphones in Sub-Saharan Africa, equating to a connection of about 66%. Although affordability of the smartphone has been quoted as a major challenge for a part of the population, Jumia - Africa’s leading e-commerce platform has reported a decreasing average price of smartphones over the last three years.The average amount spent to purchase a smartphone on
The Mobile Economy contributed USD 110 billion to Africa’s GDP (7% of the total GDP) in 2017 and is expected to generate more than $150 billion (approximately 7.9% of GDP) by 2022. The mobile technologies and services industry further supported 3 million jobs in 2017. ህዳር 2012 / November
Other factors that have driven much of Africa’s growth in mobile subscriptions include more affordable smartphones, declining mobile data plans, the efficiency brought about by smartphones including online shopping/ purchases, mobile payments as well as searching for information. Nevertheless, the growth of mobile will remain uneven, as the 54 African countries record varying performances, both in their respective mobile markets and the entire economies.
Africa is judiciously positioned to be the next big mobile market, enviously eyed by global investors for its enormous growth opportunities. 2019 is undeniably the year to prioritize investments in Africa’s mobile market, to leverage this monetary opportunity.
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A growing population of 1.28 billion people (42% of which are in cities), a snowballing middle class expected to reach 1.1 billion out of the 2.5 billion Africans by 2050 - leading to a higher purchasing power - are among the considerations for Africa’s mobile explosion.
2019
Image source: Gallo/Getty. the platform in 2016 stood at 99 USD, which reduced to 96 USD in 2017 and 95 USD in 2018 respectively. However, the rise of affordable entrylevel devices from price-focused brands remains a key driver of smartphone adoption in Africa. Among the top mobile brands on Jumia in 2018 included Infinix (which has been thee top brand for the last three years), Samsung, Xiaomi, Tecno and Fero.
2G will have dropped to just 14% of the total connections. Rwanda’s Mara Group has recently launched two smartphones, describing them as the first “Made in Africa” models and giving a boost to the country’s ambitions to become a regional technology hub.
Besides, while affordability of mobile data in Africa is improving across the board, the cost remains high, with the price of 1GB averaging around 8.76% relative to monthly income in 2017.
The Mara X and Mara Z will use Google’s Android operating system and cost 175,750 Rwandan francs ($190) and 120,250 Rwandan francs ($130) respectively.
Sub-Saharan Africa is experiencing a high migration rate to mobile broadband-capable connections, with 5G connections expected to launch in Africa in 2021. In 2018, 4G stood at 6%, 3G at 35%, while 2G dominated at 59%. By 2025, 5G will account for 3% of the total connections, while 4G will rise to 24%. 3G will be dominant at 59%, and
They will compete with Samsung, whose cheapest smartphone costs 50,000 Rwandan francs ($54), and non-branded phones at 35,000 Rwandan francs ($37). Mara Group CEO Ashish Thakkar said it was targeting customers willing to pay more for quality.
“This is the first smartphone manufacturer in Africa,” Thakkar told Reuters after touring the company alongside Rwanda’s President Paul Kagame. Companies assemble smartphones in Egypt, Ethiopia, Algeria and South Africa, but import the components, he said. “We are actually the first who are doing manufacturing. We are making the motherboards, we are making the sub-boards during the entire process,” he said,and added, “There are over 1,000 pieces per phone.” Thakkar said the plant had cost $24 million and could make 1,200 phones per day , and Mara Group hopes to profit from the African Continental Free Trade Agreement, a pact aimed at forming a 55-nation trade bloc, to boost sales across Africa.
Abyssinia Business Nework ህዳር 2012 / November 2019
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Aspects of property management service Addis Ababa
For many years, and in all areas of the world, wise investors have relied on real estate and rental properties to help them build wealth – it’s a great investment strategy. However, for many rental property owners, properties soon become a source of major headaches because of all the time and attention they require. This issue is particularly compounded for property owners who own investment properties in Addis Ababa but do not live here. Roc Spaces was originated from the principle of treating our clients’ properties as it is Abyssinia Business Nework
ours. As Owners, we know what it means to need responses quickly to problems, to have transparent and accurate accounting, to want our property to be clean and well maintained, and to have to budget for what we want and need. Roc knows how to do all of this in professional way. By combining high quality of service and caring with our expert knowledge of property management, we create a rare combination in the Property Management industry. This makes us stand out from others and positions us as one of the fastest growing property management companies in Addis Ababa.
ህዳር 2012 / November
2019
A great many of our current clients are not full-time investors, they have other full-time professional employment. Thus for them, to personally deal with tenants, repairs, evictions, advertising, collections, maintenance, etc… doesn’t make sense nor they have the time and energy to do so. Our goal here at ROC, is to help our clients bring in as much revenue as possible from their properties. Time is a valuable resource, so when investors see what we charge for professional asset management and compare it with what it would cost them in terms of time and effort to do it on their own, acquiring the services of a property management company becomes a very easy decision to make. The success of the company has largely to do with the expert knowledge the team possesses, along with a caring culture that understands what it means to be an owner and what it takes to make clients satisfied. Though there are many management companies, not all are created equal. Scan the QR code below for some aspects to consider when looking for a different or new property management company in Addis Ababa. Scan here for few suggestions to consider when looking for Property Management Company www.rocspaces.com
CREATING UNIQUE AND PERSONALIZED WOODWORK OUR APPROACH
MEASUREMENT
PRODUCTION
DESIGN/CAD
INSTALLATION
QUOTATION
PAYMENT & ORDER
APPROVAL
Showroom: Meklite Tower, 22 Mazoriya Megenagna Road Workshop: Mekanisa Sround Germany Square +251 93 551 5151 +251 91 121 3333 +251 91 356 4030
P.O.Box 4645 info@fassilo.com www.fassilo.com Abyssinia Business Nework ህዳር 2012 / November 2019
41
“
?
በዳንኤል ጥሩነህ
”
እሙን በጣም ነው የምወዳት ፣ ሙሉ ህይወቴ ለሷ የተመሰረተ እስኪ መስለኝ ። የዕሙም መውደድ ግን ከናፍሯ ላይ ከኔ በተሻለ ነው ። ሆዴ … ዛሬ ሙሉ ቀን የት ነው ጠፍተህ የዋልከው ? እንዴት እንደናፈከኝ ፣ ስትጠፋ እኮ ይጨንቀኛል ። ያነጋገር ለዛዋ ከዜማ ጋር የታጀበ ስለሆነ እንዴት ደስ እንደሚል ። ከእሙ ጋር የተገናኘ ነው ተቀጥራ በምተሰራበት ሆቴል ውስጥ
42 Abyssinia Business Nework
ለመዝናናት በሔድኩበት ሰዓት ነው ። የመጀመሪያ ቀን ያየኋት በዩኒፎርም ሲሆን ፣ ሆኖም ግን የለበሰችው አጭር ቀሚስ ልዩ ውበት ሰጥቷታል በደንብ እንዲታይ የሰውነት ቅርጿ እድሉን አመቻችቷል። እሙ ብዙም ቆንጆ ባትባልም ሆኖም ያላት የሰውነት ቅርፅ አቤት ፣ ወዴት ? እንድትል በሩን ክፍት ነው የሚያደርግው። ዓይኖችህ ማረፍ እስኪያቅታቸው ድረስ ነው ሰላማቸውን የምትነሳቸው። የአፍንጫዋ አቀማመጥ ብዙም ባይባልም እኔ ስለወደድኩት ለኔ ተውልኝ ። ብቻ የውስጤን ምን እንደነካችው ባላውቅም ነገረ ስራዬ ሁሉ የሚያስበው እሙን ነው ። የኔ እንደዛ መሆን ለእሙ…ሌላው ቢቀር ስለመፈጠሬም የምታቀው ቦታው ላይ ስገኝብቻ ነው ። የትኛው ዘመን
ህዳር 2012 / November
2019
ነው፣ እንደዚህ ነገሩ ሁሉ የህሊና ቀርቶ የዳቦ የሆነበት?። ከየትም አቅጣጫ ይምጣ በየትኛውም የድምጽ ቃና ብቻ የሷ ስም ይሁን እንጂ ሁሌም መልሷ ወዬ ነው። ታድያ ወዬ ያመጣብኝ ጣጣ ። የካሮት እድገት ሆኖብኝ ይሄው ዓመት አስቆጥሬያለሁ ከወዬ ጋር፣ በመሃከል በተዋወኳት ሶስተኛ ወሬ ይመስለኛል በሳምንቱ የመጨረሻ አንዱ ቀን ልጋብዛት ፈለኩና ምን ማድረግ እንዳለብኝ ከራሴ ጋር ማውራት ጀመርኩ ። እንዴት ግን ትወደኛለች ? ስል የመጀመርያ ጥያቄ ለራሴ ጠየኩ ። ለምን አልጋብዛትም ብዬ እራሴን ደፋር አደርኩት። አድራሻዋን አንድ ትሰጠኝ ጠየኳት ከቢል ጋር አብሮ መጣልኝ ። እስከምደውል እንዴት ሰዓቱ ይሂድልኝ የአመት ያህል ነው የራቀብኝ ። መድረሱ አይቀርም ረፋዱ ላይ ደወልኩላት። ከእንቅልፏ እየተንሳች ነበረና ድምጿ ትንሽ
ወፈር አለ ቢሆንም ግን ለኔ የትኛውም ይሁን ማናገሬን ብቻ ነው ያሰብኩት ሆኖም ግን ስወጣ ልደውልልህ ብላ ብዙ ሳታዋራኝ ስልኩን ዘጋችው ። ስልኬ በጮኽ ቁጥር የሷ እየመሰለኝ እደነግጣለሁ ። የሷ ስልክ ግን የውሃ ሽታሆነ ! አላስችል አለኝና ደውልኩ እዛ እንገናኝ አለችኝ የስራ ቦታዋ መሆኑ ነው ። ሰዓቴን ጠብቄ ሄድኩ ። ሰላም ነው አባት ብላ ሞቅ ባለ ሰላምታ ከሰጠችኝ በኋላ ምን ላምጣልህ ስትል ጠየቀችኝ ቡና አልኩ አፌ ላይ የመጣው እሱ ስለነበር ። የፈለኩት ግን ቡና አልነበረም ። እሙን ነበር ውስጤ የፈልገው ። እሙ ፈጥና ቡናውን ይዛልኝ ስትመጣ ያለኝን አቅም አስባስቤ ውጭ ምሳ ልጋብዝሽ ፈልጌ ነበር ስል በፍርሃት ጠየኳት የእሙም መልስ
ፈጣን ነበር ። ምንም ችግር የለውም የት ስትል ቶሎ ለመመለስ ጠየቀችኝ ፡ አንቺን የተመቸሽ ቦታ ፣ ሳሮን 7ሰዓት እንገናኝ ብላኝ ወደ ስራዋ ተመለሰች ። ደስታዬ ወደር አልነብረውም ። ወደ ቤት ለመሄድ በጣም ነው የቸኮልኩት ። እሙ ሂሳብ መታ እስክትወስድ አላስቻለኝም አቁነጠነጠኝ ። እሙ ሳትመጣ መሄድ ስለሌለብኝ በተቻለኝ አቅም ጠበኳት እሙ ግን ልትመጣ አልቻለችም በአይን ምልክት ሰጥቻት ወጣሁ ። የሌሊቱ ርዝመት ለኔ ለመጀመሪያ ግዜ ነው ። እሙን ላገኛት ስለሆነ ብዬ ግን በትዕግስት አሳለፍኩት የማይደርስ የለም ሰዓቱ ደረሰ ደስ አለኝ ። እሙ አልመጣችም ! የሴት ነገር ስትቀባባ ይሆናል ብዬ ፣ 30 ደቂቃ ጠበኳት አልመጣችም ሰዓቱ መቁጠሩን
ተያይዞታል 45 ደቂቃ አለፈ እሙ አሁንም አልመጣችም። ስልኳ ላይ ልሞክር ብዬ ስሞክር ስልኳ አይሰራም ምን ሁና ይሆን ብዬ ተጨነኩ ። ደጋግሜ ስልኳ ላይ ደውልኩ ዝግ ነው ። 1፡20 ደቂቃ ያህል ከጠበኳት በኋላ ወደ መጣሁበት በመጣሁበት እግሬ ተመለስኩ ። አላስችል ስላለኝ የመጨረሻ ብዬ ስሞክር ስልኳ ሰራ ደስ አለኝ ። እየተንተባተብኩ እሙ በሰላም ነው ብዬ ጠየኳት …የእሙ መልስ ግን ፣ ተመሳሳይ ነበር ይቅርታ ማን ልበል አላወኩህም?
ወዬ ማን ልበል አላወኩህም ?
Abyssinia Business Nework ህዳር 2012 / November 2019
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ABN
10
Questions
?
BY AKLILE TSIGE
Zelalem Merawi
General Manager Zelalem Tour and Travel Agent, and Ker Ezhi Leather
Born in Ambo, West Oromia Regional State, Zelalem Merawi grew up there until the age of six, he then moved to different parts of Ethiopia, including Addis Alem and eventually to Addis Ababa where he had completed his secondary education at Shemeles Habte Comprehensive Secondary School. Zelalem had gone through various rigorous hardships to reach where he is now; at very young age he has worked at a garage and as a shoe shine boy to sustain his own and family’s life. Having completed his secondary education, he had begun working as a driver for his uncle’s vehicle with a monthly salary of 300 birr; and later he was employed by a tour and travel company .As a child Zelalem was highly inspired by local guides who used to help visitors at Addis Alem town where there are tourist attractions like Emperor Menelik Palace and Saint Mary Church. This had opened doors toZelalem to follow his childhood dreams, to establish his own tour and travel, and superior quality leather products sale companies. AklileTsige, ABN Editor-in-Chief speaks to General Manager and Owner of Zelalem Tour and Travel Agent, and Ker Ezhi Leather products Sale, Zelalem Merawi on his life path and business matters. 44 Abyssinia Business Nework
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ABN: How did you begin your business in tour and travel business? Zelalem: While growing up in Addis Alem where many tourists used to visit the tourist attractions such as the Menelik Palace and Saint Mary Church, I had the chance to get insight into what tourism mean, what local guides were doing. Moreover, I was working at a garage where vehicles of tour operators had been fixed. This also had an impact on my interest in tourism. Then I was hired by a tour and travel company; while working at this company I continued my education on tour operation supervision in extension program.I had worked only for two years here. When tourists made attempts to tip me I used to tell them that I would have my own tour and travel company, and you would help me then. I first ran a car rental business; then I decided to start operating my own tour and travel Company in 2008.This’s how all began. ABN: So, how did it go?....I mean how was the business then? Zelalem: You know I was well aware of the fact that Ethiopia,
despite its abundant and unique tourism potential, it doesn’t properly unleash these sources. This was really annoying and disturbing me at that moment. I had to investigate the needs of visitors regarding quality and standards of good tourism operation. So my job was to upgrade the ways and approaches in the business through recruiting well-trained professionals for Zelalem Tour and Travel Agent. ABN: What about the job opportunity your company has created for citizens, and the vehicles the company is using? Zelalem: Zelalem Tour and Travel Agent has created job opportunity for nearly twenty five permanent and freelance employees working with not less than eighteen different quality and up-to-date vehicles the industry currently require. ABN: You are also well-known for your contribution to the promotion of the country’s tourism sector. Tell us about this. Zelalem: Of course, I was strongly motivated to promote the nation’s tourism potential at the outset; so I had to launch a sister company
called Courage Ethiopia in 2013. This initiative was accompanied by a portal web site tourism directory which was visited by 7.5 people and also tourist guide book which had a twenty thousand circulation per edition. This tourist guide book or magazine had been in publication for nearly four years until 2017. The tourism industry needs a sustainable and effective promotion so that the country could benefit from the sector. As it’s called a smokeless industry, it is the only economic sector that the country could earn good foreign currency without spending money on it. I strongly believe that we have done our level best to promote the country’s tourism. “We are now mainly producing different superior quality leather jackets, gym bags, travelling bags, ladies bags, hand bags toilet bags, cosmetics bags, various male and female wallets, and other products.” ABN: What honors and awards have you received so far for your effort in promoting and doing tour and travel business? Zelalem: I have, indeed, received various recognitions and
AWARD
Abyssinia Business Nework ህዳር 2012 / November 2019
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acknowledgements both at home and at an international level. I have got honors from the FDRE Ministry of Culture and Tourism and Ethiopian Tourism Organization at different times. I have also received Century International Quality Award which is an internationalgold award, and also Quality Service and quality management Award in Geneva, Switzerland. ABN: Have you ever engaged in discharging your social responsibility, or any community development activity? Zelalem: yes, our company has been participating in various social activities. For instance, we have managed to develop green areas in a bid to participating in the national environmental protection endeavor; places such as Meskel Square and in front of the newly inaugurated Unity Park have been rehabilitated by our company, and tried to change the ugly faces of the areas. Furthermore, we have managed to plant various indigenous trees at Entoto Botanic Garden. Wehave also donated blood in connection with our tenth anniversary. Regarding capacity building, we did our best to cover the training cost of at least fifteen young Ethiopians who have finally run their own tour and travel agents. ABN: How do you assess the existing situation of the country’s tourism sector? Zelalem: Oh, right now while you and me are holding this interview the situation is worsening. During this high season the political instability is jeopardizing the sector. As a result, significant numbers of tour and travel schedules have been 46 Abyssinia Business Nework
“
I’m dreaming of establishing a globallyknown huge leather industry that produces uniquely Ethiopian leather products for the international market.
”
canceled. The government has to pay due attention to maintain peace and stability across the country; the path we are taking this time around is not good. The image we have built for a long period of time seems to be ruined, and it might take long to rebuild a destroyed image. Ethiopia is endowed with all types of tourist attractions in all types of seasons; we don’t have to lose the opportunity to unleash the potential in a sustainable manner. So I could say that the Ethiopian government and the people need to take peace as a significant
ህዳር 2012 / November
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input for all development agenda. “I think the current chaos and socio-political turmoil in our country will pass. So I’m dreaming of establishing a globally-known huge leather industry that produces uniquely Ethiopian leather products for the international market.” ABN:What other business do you run? Zelalem: I haven’t been stuck only with the tourism business. I had to search for another feasible business which is directly or indirectly related to the sector. I have learnt that there is a gap in leather and leather product market in Ethiopia. I have also learnt that Ethiopia’s hides and skins are of superior and good quality to produce leather products that could attract both local and global shoppers. A good number of foreigners are coming to the country for regional and continental and international conferences and tourism purposes here in the capital, Addis Ababa; these are tourists who could buy quality Ethiopian leather products. Then I decided to get into leather business. First we have changed our Tour and Travel bureau nearby Monarch Hotel at Bole into leather show room. We have begun with only two machines, changing semi-finished leather products to finished leather products, and found it was a feasible and profitable business. “When the going gets tough the tough get going, that’s what I believe” We are now mainly producing
different superior quality leather jackets, gym bags, travelling bags, ladies bags, hand bags toilet bags, cosmetics bags, various male and female wallets, and other products. Nearly thirty five professionals are currently working at this unit. We do have three showrooms in the capital, and one at Kuriftu Water Park in Bishoftu, and preparation is underway to open our fifth branch at the new terminal of the Addis Ababa Bole International Airport;every showroom sells products for at least 400 to 500 USD per day. I think our company is making
a difference in the quality of leather product.
opportunity to attract various tourists across the globe.
ABN: What technologies do you use for your business marketing?
ABN: What’s your vision? Zelalem: By the way, I usually see light at the end of the tunnel amidst of difficult situation. When the going gets tough the tough get going, that’s what I believe. I think the current chaos and socio-political turmoil in our country will pass. So I’m dreaming of establishing a globally-known huge leather industry that produces uniquely Ethiopian leather products for the international market. Regarding tourism, I want to see a company that makes use of world-class technology, and helps the nation’s tourism sector generate significant amount of foreign currency.
Zelalem: I have been to 27 countries across the world where I had the chance to experience different technologies. This exposure helps me to launch online reservation, online booking, and online payment system on our website. In addition, we have been the first in Ethiopiato launch a portal website that can be translated into 72 international languages. This technology is a great
Photo file onetour peace fashion Photo file zelalem Abyssinia Business Nework ህዳር 2012 / November 2019
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