Capital - Ecbp was established with the aim of strengthening the private sector, a traditionally weak sector in Ethiopia. What have you achieved so far and what plans do you have for the future?
Yared Fekade - Ecbp has started interventions in various fields from concept development up to practical interventions at company level. For example, through Value Chains we have been upgrading the capacity of both private and public institutions. Value Chain analysis identifies bottlenecks, looking at the whole chain from the raw product (e.g. sheep skin) to the final consumer product (e.g. handbag), looking at company, at sector levels and at rules and regulations that govern a sector. It therefore leads to direct practical improvements for the businesses involved.
What kind of methods do you use to upgrade the capacity of these companies?
Dr Michael Nebelung - One of the major methodologies we use is the stakeholder workshop, bringing together private companies, universities, associations and government agencies such as the Ministries of Health, Trade and Education, depending on the sector.
We work in a couple of sectors that are defined as potentially competitive, so a lot with pharmaceutical companies, textile and agro industry. What makes this so special is that there is no history of such an approach in Ethiopia; entrepreneurs are able to voice their concerns regarding different levels, especially when it comes to rules and regulations that stop companies from being productive.
We are close to a breakthrough in the pharmaceutical sector and we believe that the tendering system in that sector will be changed. We currently regulations that stop the few local pharmaceutical manufacturers from participating in government tenders and have noticed that imported drugs are preferred to locally manufactured ones. Now that the problem has been recognized, we hope that soon Ethiopian companies will compete against Indian and Chinese companies, providing drugs to government offices such as the Ministry of Defense and Ministry of Health.
When can we expect some sort of results for these interventions in the above mentioned sectors?
Dr Michael Nebelung - The mere recognition that there are problems in all sectors is a benefit in terms of millions of dollars for example. But right now it is not possible to see immediate results as things like these take time, but if all the promises are kept in the pharmaceutical sector, then I believe that we will be seeing technical results within the next few months.
German Müller - When talking about getting local pharmaceutical companies involved in providing products to the government, we also have to address the quality issue. We have also started introducing all local pharmaceutical companies to good manufacturing practices based on international standards. This practice will enable the companies to provide medicines of international quality to Ethiopia, but most of all we believe in preparing them for the international market. So the plan is to bring local companies in all involved sectors to the best international standard possible. We will work together with German and international experts on different topics such as documentation, organizing premises, being efficient and product formulation. This process started about three months ago and will continue for two years and will see Ethiopian companies compete with Kenyan and Egyptian, Indian, Chinese, etc. companies. The first real success of the companies in having international standards will hopefully be seen in six months time.
It might be easier to help upgrade the sectors that you just mentioned, but as we have also seen in other countries, the textile sector is very difficult to upgrade. How do you plan to work around that?
German Müller - Concerning the textile sector and sub-sectors, there are huge challenges: it might be the quality of cotton or the amount of cotton supplied, spinning or weaving of fabrics - there are a lot of problems. But we want to identify which kinds of products could help Ethiopia become competitive in the world market. Maybe Ethiopia will not succeed in producing cheap t-shirts, but we still need to find the niche market for the textile sector.
Dr Michael Nebelung - When we talk about the textile sector, people associate it with cheap shirts and the like, but that is not all. When it comes to these products, a margin of one cent will determine the buyers' interest in the US or Europe because the quality is the same. Our advice therefore is to go for premium and quality markets such as hand-loomed products where we can have a competitive advantage. It is easy to make a shirt - it is no art by itself - but to put together a quality product, be it in the textile or the leather sector, is a different thing. A simple example could be products for golf players. Professional golf players use leather gloves and these gloves are usually branded and marketed under big US companies, but it is highly possible that the leather for the gloves come from Ethiopia, but nobody would know that. The finest leather is available here in Ethiopia, but it is exported to other countries and being manufactured the gloves cost a fortune. Imagine if Ethiopia exported products of such high quality. This is what we try to teach the companies by 'value chain' and if that is achieved, then that is a million dollar business.
You want to find the niche market where Ethiopia provides premium and quality market. But for that to happen we need Ethiopia to be known for its quality products and we all know that is not the case right now. How can we change that image? Do you see a 'Made in Ethiopia' possible?
German Müller - Changing the image of Ethiopia is very important because we know of sectors that encountered problems due to the image of Ethiopia, the processed food sector for example. People from Latin America and Asia say "people are starving in Ethiopia and there is war, we can't buy food from Ethiopia" and this image barrier is bad for business. A further problem which feeds into this is that the image of Ethiopia is not consistent: we do not know what Ethiopia stands for or where we want to go from here. This process is not short term, so we have to start looking at what our competitive advantages are: we have to project a positive image about the country and there are a lot of opportunities to do that. Exports of roses and coffee do not project the same kind of feeling about their home country, so we have to be consistent in promoting the image of Ethiopia to the rest of the world.
Company brands have to be able to reflect on their country as they can help in promoting the image of Ethiopia. But along with a consistent image about Ethiopia, we need the provision of consistent quality products to the world. There is a relationship between product branding and nation branding: if you look at the Ambo [mineral water] product, it is just a name, but Ambo has become the name for other brands of mineral water. This goes for other products like face cream, detergents, alcohols, etc. and this is because people associate a certain brand with the whole variety of products, and this is a positive thing. Promoting a positive image is not only necessary to attract tourists, but also foreign investment, businesses and even convince the diaspora to come home and start investing.
Yared Fekade - Many people, for example in Europe and the USA think of drought and starving children when they think of Ethiopia - many do not know that Ethiopia is, among others, considered the cradle of humanity, that Ethiopia has unique traditions like the coffee ceremony, that it is one of the biodiversity hotspots of the world, that it has great products like high quality specialty coffee (for example Sidamo, Harar and Yirgacheffe) or with Bati Genuine one of world's finest types of leather, etc.
Branding of a county always needs to be a concerted effort of all major players: authorities, embassies, universities, and, especially large companies and their associations, etc. Just as a great company brand influences a country brand, the country brand will influence the companies. Some of Ethiopia's direct competitors have already positioned themselves: Where does Ethiopia stand?
This issue of branding is very challenging, but it is of the utmost importance for Ethiopia if we plan to enter the international market. For a long time, people from abroad have been involved in Ethiopia in terms of contributing aid and different forms of help to the needy, so now it is our turn to give something back to these people so that they know we are not just takers, but also givers and that is why we are desperate to make 'Branding Ethiopia' a reality.
Interview with Ato Anbess & Martin Mueller
Ato Anbess, I remember from our last interview you said that the "whole concept of ecbp was to bring about competitiveness in the economy, create job opportunities and strengthen the private sector." With ecbp now one year old, do you believe that ecbp is on track?
Ato Anbess - We have prepared a strategic plan that identifies the objectives and targets of ecbp's achievements. Looking at our first year, we are on track in terms of creating job opportunities and competitiveness. Last year we were only developing concepts and defining strategies but this year we will start implementation on company level in the private sector. We are implementing the strategies and concepts with selected private companies where we are involved in the re-engineering process to make them competitive in the international market.
At the university level, we have tried to introduce a new curriculum that will produce competitive graduates over the years so that the growing private sector will have a wide pool of professional employees at their disposal.
The economic and political problems in Ethiopia have their own influence on the private sector. How do these affect your plans of introducing Ethiopian products to the international level?
Ato Anbess - From the point of view of promoting business or the private sector, we have two projects: 'Branding Ethiopia' and 'Matchmaking'. Concerning the branding, Ethiopia is not known as a country that provides products to Europe or the West. Ethiopia is rather known for hunger and other problems, so that needs to be changed into an image that shows Ethiopia as a country that can provide products to the international market.
The branding process will take a very long time, but from the ecbp perspective we can make a contribution in terms of branding Ethiopia to the international market in the areas where the country has competitive potential.
We are working on the food, textile, leather and agro-processing sectors and we believe that Ethiopia could be competitive enough in these sectors. In the short term, we are involved in marketing issues such as matchmaking. Matchmaking is the process of bringing foreign buyer and local producer together. It must be a "match" as the buyer needs to want the product of the Ethiopian company and the Ethiopian company needs to produce according to the specifications of the buyer.
Both governments are investing in this program for technical support /experts/ to bring international best practices to increase the competitions of the Ethiopian economy in the global market. As the Ethiopian government is the owner of this program the key players / actors / should work in line with & ECBP capacity development frame work. Since the success of ECBP will depend on how much our Ethiopian institutions, Individuals and the system involved in the process has maintained the knowledge and skill transfer sustainably in all the capacity development that we are working on (Macro Meso & Micro levels) as well on how much our German international experts deliver their experts to the actors.
Ecbp is one of the largest ever development programs. What has been the response to it so far? Does ecbp work together with other donors? If so, how?
Martin Mueller - Many people are surprised at what we have achieved after a year. We have worked out three radical reforms, one is for technical faculties of universities, another is for Technical and Vocational Education and Training (TVET) and the last overhauls the quality management infrastructure nationwide which is a precondition for any kind of marketing outside of Ethiopia. We have been working on it for a year and we are now ready for implementation. After seeing what we have done, people have started knocking on our door and asking to join us. The European Union has already expressed their intention to join us in 2008 with a substantial amount of money and two more organizations want to join us.
What can we expect from ecbp in the coming year?
Martin Mueller - During our first year we have started implementation. Implementation normally doesn't happen in a ministry, it happens on the ground in the various training institutions, private sector organizations and universities. It happens by promoting business associations such as the chambers simultaneously in all regions. At the moment, concept development has been highly centralized, but now all the concepts are to be transported to the regions and that means ecbp goes regional.
I can see that in two years time, ecbp will mainly become a regional program because the more you get into regions the less it becomes a national program.
We understand that the Ecbp is hiring foreign experts for its mission here in Ethiopia. Is that because there are no Ethiopians who can do the job?
Martin Mueller - The reason why the Ethiopian government specifically wants a lot of German experts for this program is because they have traveled the world and asked what systems have been used by other governments, especially the Tiger states, and understood that the Germans have done it elsewhere, so they want us to be here. If you are worried that the Germans do the work for the Ethiopians and then leave with no one to continue, we have a clear and rigid concept. For each German here, there should be a twinning partner and whatever is being done, they do it together. So when the Germans leave, then the Ethiopians will continue without a problem. We are in the recruiting process now but this twinning regulation will be followed strictly. I have to say that it is not only the Ethiopians that have learning to do from the Germans, the Germans also learn a lot from the Ethiopians, because an expert who is not understood by the other party is nothing but a waste of money.
Are you encouraged by what ecbp has achieved so far?
Martin Mueller - It is definitely encouraging. I say that because we did not start the program from scratch when we came here. We have been operating in other countries for over 30 years and we have enough experience for what we do. At the same time, we have never undertaken such a huge program as the ecbp.
We face many challenges in the process: taking decisions is one thing, putting them into action something else and there are two different sorts of administrative procedures - the Ethiopian and German administrative procedures. Of course, some of the procedures are too slow for a program that wants to show results in a few years, but within the given system, we try to improve the situation. Even though we have these normal administrative delays and bureaucracies, there are people who try to speed it up. If you want to be part of the international market you have to have quality in every aspect and we are trying to do that, and such a huge program means drastic changes ahead and we must not be afraid of the changes if we want the best for Ethiopia. |
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