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There are a number of programmes and organizations, which aim to contribute towards the enhancement of export of Ethiopian products. Programmes are typically funded by bilateral or multi lateral donor organizations and it is encouraging to see that synergy is beginning to form among donors and the Government’s efforts in promoting the private sector. Programmes include training in export, ITC and marketing, all important aspects of the value chain, which begins with getting the raw materials and ends with selling the goods. Design, production, quality control, packaging, marketing and transportation are equally important links of the chain in between both ends.
It is said that a chain is as strong as its weakest link. The same applies to the value chain. If for example the packaging of an otherwise high quality and well marketed product does not provide the required protection for the product, it will end up damaged on the receivers’ shelves. If perishable goods like fresh fruits and vegetables are not transported in time and cooled at the right temperature on the way to a foreign market, they will end up spoiled and rejected at the auction at the other end. In other words, producing for export is a complex set of activities, which all need to be managed very well. Any programme therefore, aiming to enhance export, in my opinion needs to address each of the links in the value chain. And with Ethiopian entrepreneurs only beginning to works towards exporting their goods, a lot of work needs to be done.
What needs to be done then in development programmes that support and promote exports from Ethiopia into foreign markets are activities that directly contribute to achieving a goal. And that goal, let us be clear about it, is for Ethiopian exporters to make profit by selling their goods in foreign markets, with the assumption that their profit will boost the Ethiopian economy and create more employment. Exporting by itself is not enough. The goods must be sold at the other end with a profit. And this is not an easy thing to achieve. By the time a product has reached the shelves of a shop in the USA or West Europe, its value has undergone an up mark of a factor 6 or even more. In other words, if a product costs USD5 to produce here, it will be sold there for USD30. And if consumers there are not willing to pay USD30 for that product, making profit becomes difficult. Production costs here must therefore be kept as low as possible, which requires effective and efficient quality and quantity production. It is here where I am getting worried. A lot of effort needs in my opinion to go into technical assistance for actual product development and design of the production process, aiming to support entrepreneurs to produce quality goods for which there is a market and to produce the goods efficiently enough to bring the production costs down. What the entrepreneurs need in other words is support from people who are actually in the business, who have hands on experience in developing products, in designing them for the export market, adjusting them to the ever changing fashions, trends, colours and shapes. And who know how to design a production process which keeps costs as low as possible in order to be able to sell at competitive prices. Mind you, all the other links of the chain, crucial as they all are, only become worth their effort if you produce goods that will sell.
As mentioned above, the goal is to make profit, not just once but over a period of time, so that the business sustains itself. And so the goal of programmes that support the development of the private sector in general and export in particular must be to make a substantial contribution to entrepreneurs to make profit from their sales. Any activity of such programme must therefore contribute to that goal, producing results in sales and profit over time and so that donor funds are used effectively.