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A national consultancy firm is calling on the government to support local companies since they are competitive in most areas and the majority of revenue from the consultancy services currently goes overseas.
Three weeks ago the Addis Ababa Chamber of Commerce and Sectoral Association facilitated an event where issues related to consultancy service in Ethiopia were discussed.
Several challenges in the sector were raised, including lack of understanding and demand from Ethiopian consultants in the private sector. Currently the government is the major client for consultants.
“Very few seek advice from consultants which is a problem,” Aynalem Abayneh (PhD), one of the presenters at the event, expressed.
Invited experts who presented their evaluation about consultancy service in the country concurred that if the government helped improve the sector it would save unnecessary expenses. This includes things like poor supervision when clients don’t have a firm understanding of the bidding process or how to draft requests for proposals (RFP) or terms of reference (ToR).
“People, who prepare in the bid document, are purchasing specialists and not procurement specialists, so purchasing specialists cannot understand the scope of the consultancy in detail which makes it hard for them to obtain the desired results,” an expert said.
“The RFP has to include the scope of the consultancy clearly. It is one of the major problems in the Ethiopian context,” Tilaye Kassahun (PhD), General Manager of PRIN International Consultancy and Research Services PLC, told Capital. He said that currently most of the bids fail to properly include the scope.
The government has to give prior attention to the sector and give training for experts in the procurement body.
The other issue that concerns the local actors is the trend of focusing on international firms as opposed to local supervisors.
“The public institutions’ need for consultants is growing in Ethiopia, but most of them go to international firms,” an expert said.
Tilaye explained that many of those international firms turn around and sub-contract local consultants anyway.
Experts said that there are different options like partnerships with international consultancy firms. They say economic growth will be better supported through strong and capable local consultancy firms as opposed to awarding all projects to foreign based companies.
“If the local companies are able to get projects the country will save a huge amount of hard currency allocated for international consultants,” experts added.
The capacity of the local consultancy firms has grown, except in some technical sectors.
The market share of the local consultancy has not been studied but according estimates it does not exceed 10 percent.
According to experts, to expand transparency and quality work the consultant business needs to be harmonized.
Tilaye said that standardization has to be implemented in the process of hiring a consultancy firm to tackle the misdemeanor acts on the selection of the consultant and to obtain quality service.
In his presentation Tilaye said that the sector is vulnerable to corruption so it needs adequate attention from the government.
“If the bid invited second level consultants, their price offer will not have a huge difference and even the awarded firm will provide standard service as per the cost and demand of the client,” he told Capital.
Experts said consultancy is not regulated in Ethiopia so the country needs a regulation policy for the sector and incentives that are provided for other sectors.
“The government is the major client in the country for every sector including consultancy service,” an expert said.
The sector actors said that the growth of knowledge intensive sectors such as industry and service is crucial so it needs knowledgeable partners.
Six hundred consultancy firms are members of the city chamber. A strong consultancy association has been listed as a need.