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Shaping the Future: The role of professional associations

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Professional associations play a pivotal role in shaping the socio-economic landscape of any nation. In Ethiopia, these associations are increasingly recognized for their potential to drive workforce development, enhance professional standards, and contribute to national progress. However, the journey of professional associations in Ethiopia is marked by both significant achievements and persistent challenges. This interview with Mesganaw Getinet, a prominent figure in Ethiopia’s training and consultancy sector, sheds light on the evolution, challenges, and opportunities facing professional associations in the country. Mesganaw, the founder of MG Consultancy and a key advocate for the Ethiopian Training and Development Professionals Association (ETDPA), shares insights into the sector’s growth, the role of government, and the strategies needed to strengthen these associations. This condensed version of the interview captures the essence of his perspectives, offering a comprehensive overview of the current state and future potential of professional associations in Ethiopia.

Capital: What are the primary goals and objectives of your professional association?

Mesganaw Getinet: The ETDPA operates under Ethiopian government proclamation 1113/2019, focusing on four key areas:

– Enhancing the Profession: Improving standards, practices, and recognition of the training and development sector.

– Maintaining Professional Ethics: Ensuring high ethical standards and a clear code of conduct among members.

– Conducting Research and Volunteer Services: Providing actionable insights for policymakers and supporting community development.

– Fostering Indigenous Training Practices: Promoting culturally appropriate training methods to ensure sustainability and effectiveness.

Through these initiatives, ETDPA aims to create a vibrant, innovative, and inclusive training sector in Ethiopia.

Capital: What role does your association play in advocating for policy changes?

Mesganaw: ETDPA promotes policy reforms through evidence-based advocacy, collaboration, and proactive engagement with stakeholders. We conduct research to identify gaps and opportunities in the training sector, providing data-driven recommendations to policymakers. We also advocate for the integration of indigenous training practices and work with policymakers to enhance professional standards and ethics. Additionally, ETDPA members contribute volunteer services, offering valuable insights to support policy development.

Capital: How can the government better address the diverse needs and objectives of different professional associations?

Mesganaw: The government can support professional associations by fostering collaboration, offering tailored resources, and integrating their insights into policy-making. Establishing regular forums for dialogue, providing funding and technical assistance, and promoting membership in professional associations are key strategies. Additionally, the government should encourage research and innovation, strengthen legal frameworks, and raise public awareness of the contributions made by professional associations.

Capital: How can the association ensure its understanding of government proclamations is up-to-date and relevant?

Mesganaw: ETDPA ensures its understanding of government proclamations is current through capacity-building efforts, such as workshops and seminars led by legal experts. We create user-friendly materials summarizing key regulations and maintain partnerships with legal advisors to stay informed about changes. Regular consultative forums with government officials and other associations also help clarify and disseminate information.

Capital: What is the role of the government in supporting the growth and effectiveness of professional associations in Ethiopia?

Mesganaw: The government plays a pivotal role in supporting professional associations by preparing tailored policies, streamlining registration processes, and providing induction training for new associations. Networking associations with local and international donors, recognizing their achievements, and revising governing structures to align with their unique objectives are also critical. These measures can enhance the growth and impact of professional associations in Ethiopia.

Capital: How can employers make the most of the services provided by professional associations?

Mesganaw: Employers, including SMEs and larger organizations, can gain significant advantages by actively engaging with professional associations. These associations play a crucial role in advancing professions, supporting professional development, and contributing to policymaking and community initiatives that benefit employers. By participating in association activities, employers access valuable resources such as specialized training programs, workshops to enhance workforce skills, and industry insights that help them stay ahead of trends. Continuous professional development opportunities ensure that employees remain competent and aligned with global standards. Additionally, collaboration with associations on research initiatives allows employers to tackle industry challenges effectively, improving efficiency and competitiveness. This partnership also provides access to best practices and innovative perspectives that drive growth. Supporting professional associations enables employers to fulfill their corporate social responsibility (CSR) commitments. By sponsoring or partnering with these organizations, employers contribute to the development of the professional community and society at large, fostering a skilled and engaged workforce. Ultimately, this collaborative approach strengthens the professional ecosystem, promoting shared growth and innovation while benefiting both employers and the broader.

Capital: What are the key challenges and opportunities for the growth and development of professional associations in Ethiopia?

Mesganaw: The growth of professional associations in Ethiopia faces significant challenges, but also presents numerous opportunities for progress and sustainability.

Key Challenges

One major obstacle is the regulatory framework, which mandates that associations providing licensing services must have over 75% of their membership from professionals in their fields. A recent survey indicated that 97% of respondents found this requirement impractical, given the disparities in the professional landscape. Additionally, the federal registration process managed by the Authority of Civil Society Organizations (ACSO) is complicated by parallel certification systems from regional governments, creating inconsistencies and inefficiencies. Directive 849/2021 adds further complexity by not addressing the specific needs of professional associations, particularly regarding the 75% membership threshold. Operationally, high administrative costs and strict donor funding requirements hinder effectiveness. Many associations struggle to secure sustainable funding due to complex donor conditions, which often distract from their core missions. Moreover, low community awareness about the value of these associations limits support and participation, while minimal government backing leaves them without necessary institutional support.

Key Opportunities

Despite these challenges, several opportunities can foster the growth of professional associations in Ethiopia. Policy advocacy is a significant opportunity; associations can help shape supportive regulatory frameworks. Capacity building through targeted training can enhance internal operations and effectiveness. Strategic partnerships with local and international donors can provide essential funding and resources. Increasing community engagement through workshops and campaigns can raise awareness about the role of these associations in national development. Additionally, collaboration with businesses on Corporate Social Responsibility (CSR) initiatives can create mutually beneficial relationships that support workforce development. Technological advancements also offer opportunities for improved communication and service delivery through digital tools for training and online forums.

Capital: What are the best practices and lessons learned from other countries that can be applied to the situation in Ethiopia?

Mesganaw: Ethiopian professional associations can learn from other African countries, such as Kenya’s phased registration process, South Africa’s consultative approach to policy-making, and Nigeria’s resource-sharing model. Rwanda’s focus on leadership training and Ghana’s member engagement strategies are also valuable. By adopting these practices, Ethiopian associations can address challenges and enhance their operations.

Capital: How do you see the success of different professional associations in different sectors in Ethiopia?

Mesganaw: The success of professional associations in Ethiopia varies across sectors. Some associations have achieved milestones such as acquiring office spaces, initiating income-generating activities, and providing competency certifications. However, most associations struggle with financial sustainability, membership recruitment, and public visibility. Targeted growth strategies, including capacity building, strategic partnerships, and community-focused initiatives, are needed to enhance their impact.

Capital: What is the impact of being a member of a professional association on the employment outcomes of professionals in Ethiopia?

Mesganaw: Membership in professional associations enhances employment outcomes by providing access to training, certifications, and networking opportunities. Associations offer job boards, career counseling, and advocacy for members’ rights, improving employability and career growth. Membership also enhances professional credibility, making members more attractive to employers.

Capital: Can professional associations contribute to economic growth and social development?

Mesganaw: Yes, professional associations contribute to economic growth by enhancing workforce capabilities, fostering innovation, and setting industry standards. They also engage in community projects and advocate for policies that benefit society. By promoting ethical practices and indigenous knowledge, associations strengthen Ethiopia’s global image and support sustainable development.

Capital: How can professional associations in Ethiopia effectively address the issue of weak enforcement of professional standards and ensure compliance with ethical guidelines?

Mesganaw: Associations can ensure compliance with ethical guidelines by creating and refining professional standards, providing ongoing education, and implementing monitoring and evaluation systems. Advocacy for robust legislative measures, transparency in handling violations, and fostering a supportive professional environment are also essential.

Capital: How can professional associations in Ethiopia maintain their independence and autonomy while effectively engaging with government agencies and policymakers?

Mesganaw: Professional associations can maintain independence by establishing strong governance structures, adhering to non-partisan principles, and promoting transparency. Strategic partnerships and constructive dialogue with government entities, while maintaining a clear distinction between advocacy and policy execution, can enhance their influence without compromising autonomy.

Capital: What are the key priorities for the future development of professional associations in Ethiopia?

Mesganaw: Key priorities include strengthening organizational capacity, expanding membership bases, enhancing professional standards, and engaging in policy advocacy. Fostering transparency, accountability, and professional networking, as well as adapting to technological advancements, are also critical. By focusing on these priorities, Ethiopian professional associations can enhance their impact and contribute to national development.

EIH unveils plans to address government budget deficit in five years

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Ethiopian Investment Holdings (EIH), the entity responsible for managing 34 state-owned enterprises, has announced an ambitious initiative to fully fund the government’s budget deficit within the next five years. This plan comes at a critical time as Ethiopia grapples with significant budget shortfalls exacerbated by various global and domestic economic pressures.

EIH is currently contributing to offsetting the deficit through its profits and projects a substantial increase in revenue that will enable it to close the gap entirely. “Our state-owned enterprises should be the main driving force for economic growth,” said EIH CEO Brook Taye (PhD). He emphasized the importance of these enterprises in strengthening the country’s finances and highlighted past contributions, including a dividend payment of 5.8 billion birr to the government in the last quarter, with plans to increase this to 14 billion birr this year.

The initiative reflects a shift towards an autonomous approach to fiscal management, aiming to reduce reliance on foreign borrowing and create a sustainable financial environment. However, achieving this goal will require significant improvements in the performance and profitability of state-owned enterprises, addressing issues such as operational inefficiencies and governance challenges.

The success of EIH’s plan could have far-reaching implications for Ethiopia’s economy by alleviating the budget deficit burden and freeing up resources for critical investments in infrastructure, education, and health. This initiative also underscores the government’s commitment to enhancing the role of state-owned enterprises as engines of growth within the economy.

In a related development, EIH is set to acquire a stake in Scandinavian company Ethno Mining, which has commenced gold production in Ethiopia’s Akobo district. This strategic move marks a significant expansion into the gold mining sector and reflects EIH’s broader goals of diversifying its investment portfolio.

ESL achieves record financial results amid regional challenges

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Ethiopian Shipping and Logistics (ESL), the state-owned logistics giant, has reported impressive financial results for the first half of the 2024/25 budget year, exceeding its revenue targets and achieving significant operational milestones.

Despite having to concentrate on feeder services for Ethiopian cargoes stored at nearby ports, ESL generated over a quarter of a billion dollars in foreign currency earnings from its cross-trade operations during this reporting period.

In a further demonstration of its strong financial health, the company paid a dividend of three billion birr to its parent organization, Ethiopian Investment Holdings (EIH).

According to the report, ESL recorded total income of 46.8 billion birr, surpassing its target of 44 billion birr by 106%. Expenses for the period were 37.5 billion birr, closely aligning with projections.

The company’s gross profit for the six months exceeded expectations by 50%, while its pre-tax profit reached 9.3 billion birr, significantly higher than the anticipated 6.2 billion birr.

Berisso Amallo, CEO of ESL, attributed this success to macroeconomic reforms that established a market-based exchange system, as well as growing revenues from cross-trade activities. He also noted that resolving challenges in the Red Sea region could further enhance cross-trade commerce.

One of ESL’s notable achievements was its performance in cross-trade operations, generating USD 271 million—16% more than its goal of USD 234 million for the specified time frame.

The logistics company prioritizes the cross-trade sector due to its capacity to generate substantial hard currency revenue. Over the fiscal year ending July 7, 2024, ESL secured USD 421 million from this business segment.

As the only deep-sea vessel operator on the African continent, ESL primarily focused on feeder services for Ethiopian cargoes during this period, as its partner vessel operators avoided the Red Sea for security reasons.

ESL’s vessels transported goods from ports such as King Abdullah in Saudi Arabia and Salalah in Oman to Djibouti, Ethiopia’s main maritime outlet. The company currently operates a fleet of ten vessels.

Experts note that ESL’s ability to achieve significant foreign currency earnings underscores its strategic adaptability and operational efficiency, even amid the constraints of focusing on feeder services. ESL’s cross-trade business, which involves transporting goods between foreign ports, has become a key revenue driver, significantly contributing to its overall financial success.

However, ESL has faced operational challenges due to the ongoing Ukraine-Russia crisis and hostilities in the Red Sea region involving Ansar Allah, also known as the Houthi militants of Yemen.

Despite facing obstacles, the company has successfully maintained its operations and achieved significant milestones.

One of the key accomplishments during the reporting period was the completion of audit reports for the past five years, a task that had previously been challenging for the corporate division. “We have completed the four-year audit report, starting with the 2019/20 fiscal year. We are now finalizing the audit report for the previous fiscal year in accordance with international standards,” said Berisso.

He emphasized that these audit reports would allow the company to expand into various sectors and uphold its global standing.

In addition to its financial achievements, ESL transferred three billion birr to its parent company, EIH, during the review period. EIH, a sovereign wealth fund, owns 34 large and strategically important public enterprises. This dividend payment follows a similar payout of three billion birr in the previous fiscal year.

Operationally, ESL transported over two million tons of freight in the first half of the budget year and successfully moved approximately 60,000 TEU containers using multimodal transportation.

Looking ahead, the company aims to handle 819,877 tons of cross-border freight and 4.3 million tons of import marine freight by the end of the fiscal year, as announced by the CEO in July of last year.

ESL’s strong performance underscores its critical role in Ethiopia’s logistics and trade sectors, even amidst regional and global challenges. With its continued focus on operational efficiency and strategic growth, the company is well-positioned to maintain its leadership in the maritime industry.

Global Bank launches innovative digital banking center

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Global Bank Ethiopia has officially launched a state-of-the-art digital banking service center aimed at enhancing customer experience and streamlining operations. The new center will offer 24/7 banking services, including account openings, deposits, withdrawals, foreign exchange transactions, and bill payments. Additionally, it features a video conferencing room for enterprise customers to access remote video banking services.

CEO Tesfaye Boru emphasized the bank’s commitment to technological advancement and customer satisfaction, stating that this initiative is designed to increase efficiency and better serve its growing customer base of 1.7 million. The bank has experienced significant growth recently, reporting a pre-tax profit of 757.6 million birr this year, attributed to strategic branch expansion and technological innovation.

Global Bank is also focused on meeting the minimum capital requirements set by the National Bank of Ethiopia and expanding its reach across the nation. With total deposits exceeding 20.6 billion birr and total assets surpassing 26.6 billion birr, the bank is well-positioned for further growth.

In a move to solidify its status as a leading financial institution in Ethiopia, Global Bank plans to construct a new headquarters on a 5,550-square-meter site acquired from the Addis Ababa City Administration. This ambitious project is expected to enhance the bank’s operational capacity and service delivery.