Investing in Ethiopia

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Ethiopia’s private sector is increasingly connecting to foreign markets. Export is promoted, foreigners are encouraged to invest here and joint ventures have become preferred business modalities. Tourism is promoted and the number of visitors from abroad is expected to increase. A growing number of investors, traders and producers are thus entering complex value chains that cross borders and continents, trying to meet demands in terms of quality as well as quantities, while keeping risks at a minimum. Production modalities, therefore ,need to be able to meet these demands and be geared for quantity production, while the consistency of quality is maintained. This requires organization and management but it can be done. 
Ethiopian and foreign business people also need to interact more often and intensely. They need to understand each other well. The chance that things go wrong here is real and present. Different interpretations, different approaches, or different expectations may cause business deals to go sour, spoil relationships and result in the loss  of opportunities we so desperately look for. These differences arise mainly from peoples different cultures. African, West European, Asian, North American and South American people all differ in the way they relate to other people and to their environment. People from different cultural backgrounds will find it difficult to understand each other’s ways, but learning more about the ways and manners of the people we deal with is necessary if we want to prevent things from going wrong. Being aware of other’s cultures will help in doing business with them. For example, there are different interpretations of concepts like time and contracts. Other topics of interest for the business owner include negotiations, communication, information, motivation, trends, product development and many more.
As we are moving into more complex and border crossing value chains, we need to realise that the world is indeed becoming smaller. Business transactions are increasingly taking place over the internet, replacing the way we used to do business and demanding supportive infrastructures in order to connect to the rest of the world. Telephone and fax is no longer sufficient anymore as more and more information needs to be shared, information that requires fast and reliable internet connections. The slogan of the Ethiopian Telecommunications Corporation, written on the opening page of their email services, “Connecting Ethiopia to the future”, is inspiring in this respect. Fact of the matter is that the future is already here and we need to make the most of the opportunities that the global internet and email services have to offer. It is here where businesses in Asia, most notably India and China have made tremendous progress and have learned to take full advantage of the potential that the internet offers. That is why it became possible for American and European companies to begin outsourcing some of their work, for example. And what began with outsourcing routine work some years ago has resulted in intensive and essential business partnerships, while finding complementarities between companies and their employees across continents.
Supportive to these developments in Asia was the realisation that in order to be able to take on outsourced work from other parts of the world, and to enter into complementary business partnerships, education has to step up to prepare a new generation of people who are able to communicate with the rest of the world and have the ability to measure up to the required levels to compete internationally. There is work to be found in the global village for those who are able to join the playground that is becoming more level by the day.
Let us go back though to Ethiopia and try and see where we can go from where we stand today. Looking at the current population growth rate, we see the population growing with some 1.5 million people or more every year. That means we will be well over 100 million in the next 20 years. That is how many mouths will need to be fed. In other words, jobs need to be created, millions of jobs!
Supporting local investment and attracting investors from overseas as is being done is therefore a welcome strategy as they will create jobs for many workers. And with it comes the need to invest in education and vocational training for the multitude of youth to be able to join the working forces and take up employment.      
In his book “The World is flat”, Thomas L. Friedman suggests that developing countries need to focus on four issues. The first is the right infrastructure, including cheap internet bandwidth, mobile telephone networks, modern airports and good roads. The second is education, aiming at getting more people being able to innovate and compete at global level. The third is facilitation by government in terms of policies and effective bureaucracy and services. And finally the environments, as countries that preserve their natural environment are more likely to continue to attract investors and innovators, who can make the decisive difference in turning a developing economy into a developed one.
I like to think of Ethiopia as such a place and challenge all of us to step up our efforts and ask ourselves what contribution we can make to make this happen.

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