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Micro and small enterprise owners asked Prime Minister Hailemariam Desalegn on February 4, 2015 for more credit money availability and some months of tax exemption until they get established in the business.
The enterprises made the request to the prime minister at a recognition ceremony held to honor well achieving enterprises. The business owners lamented of some impediments that affect their productivity. Expensive construction machine lease, lack of efficient technical support from regional offices, a sluggish credit dispensing procedure to start a business, insufficient supply of textile and leather row materials, and power interruption were the repeated complaints presented from the enterprises.
Feleke Desta , a small enterprise from Afar says, “Most of our money goes to the machine owners who receive a lot of money by renting the machines. In addition to that, not getting the credit from the macro finance institutions makes it more difficult for us to own our own workshop. The government should look at this shortcoming seriously if it wants small enterprises to have a big impact on the Ethiopian economy.’’
Another participant from Bahir Dar demanded the government to give a tax relief to new enterprises in order to let them accumulate a good capital. “When new enterprises start off, the tax is a heavy burden that sometimes derives them out of the market.’’
He also added that the continuous interruption of power and the low supply of manufacturing goods like leather and textile inhibit business from producing a higher amount.
Hailemariam accepted that the problems the enterprise owners raised are real but he stressed that the majority of these problems are rooted in lack of efficiency and knowledge.
“We are beginners and as a result what we can achieve in the past ten years gives us a hope to do more. The main problem in the sector is knowledge based the inability to carry out much work with the limited recourses.’’
The prime minister said that there is a huge skill gap between Ethiopian and foreigners. “Last time, we gave the same task as the Ethiopians to a German mason we brought here. The German dressed the cement onto the wall within two hours without dropping the cement but the Ethiopians dropped many cement balls while dressing, and it took them six hours to accomplished the task.’’
“What we understood from that comparison is that our workers who assumed they have enough speed and skill are not skillful enough. We have to know more in order to do things professionally and effectively.’’
The prime minister informed the enterprisers that the Development Bank of Ethiopia will soon start leasing machineries to enterprises. However, he rejected the idea of permitting a tax exemption.
“New enterprises must know from the beginning they have to pay tax. Otherwise, we’ll end up creating enterprises who do not want to pay tax’’ he said.
Enterprises also stressed that the government should start entrepreneurship education in colleges, which is currently restricted to Adama, Addis Ababa, Mekele, Hawassa and Bahir Dar Universities.
A total of 243 Small Enterprise Associations that created more jobs, innovated new products that substitute imported material were recognized for their effort and they were awarded by the Prime Minister. Vocational colleges and government bureaus who gave professional support to the businesses were also acknowledged for their contribution.
Ethiopia is hopeful that small businesses and industries can contribute to its economy in significant proportions.
Currently, the sector creates jobs for 2.7 million Ethiopians, who are mostly young people and the sector is worth a capital of 6.6 billion birr.