Ethiopia’s reforms spark hope for business
- Reuters 24th Feb 2019 00:00:00 GMT +0300
A wave of economic reforms in Ethiopia since Prime Minister Abiy Ahmed came to office nearly a year ago has sparked hope among social businesses struggling to grow under the nation’s heavily regulated economy, industry experts said.
Since April, Abiy’s government has announced shake-ups across industries, including plans to open up the once closely guarded telecommunications and power monopolies.
Ethiopia has also loosened government control of the economy by opening its logistics sector to foreign finance and finalising reforms in its underdeveloped mining and oil sectors to encourage more foreign investors.
Matthew Davis, CEO of Renew Strategies, an impact investment firm which finances Ethiopian social start-ups, said there was untapped potential with a market of 100 million people - many of who needed products and services that social firms could meet.
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“The challenges in Ethiopia are big, but the opportunities are also big. Ethiopia is the second largest population in Africa ... and now it’s slowly opening up,” Davis told delegates at the Sankalp Africa Forum, an event in Nairobi bringing together investors, social businesses and policymakers.
“We are still waiting for things to change, but we’ve all seen what’s happened over the last year with the new prime minister who is very progressive, and we are very excited about that.”
Businesses designed to both turn a profit and help people in need have mushroomed in Ethiopia in recent years, with women and young people playing a prominent role as social entrepreneurs.
There are over 50,000 companies in Ethiopia pioneering solutions aimed at improving services from water and sanitation to health, according to a survey by the British Council.