Oct 17 , 2020
By HAGOS GEBREAMLAK ( FORTUNE STAFF WRITER )
The government of Germany and Ethiopia have partnered to launch a project to finance 30 small and medium-sized manufacturers from five selected regional states to work on bamboo production. Worth 78 million Br, the project aims to support government Novel Coronavirus (COVID-19) relief efforts by galvanising the bamboo industry.
The German Development Agency (GIZ) and the Federal Small & Medium Manufacturing Industries Promotion Authority have launched a project in Addis Abeba, Oromia, Southern Nations, Nationalities & Peoples, Amhara and Tigray regional states. These enterprises will produce 20,000 bamboo beds over a six-month project period.
Once the production is completed, the Agency has pledged to purchase the beds and hand them over to the Ministry of Health for use by various COVID-19 treatment centres in the country.
The programme aims to increase the value of the bamboo sector through supporting the businesses and creating job and marketing opportunities, according to Robel Ahmed, communications officer at the Authority, which started to train 22 experts last week.
The experts, in turn, will provide the manufacturers with training on the production of bamboo beds. Training costs will be covered by GIZ. In addition to these expenses, the Agency will also finance the procurement of bamboo from farmers and allocate the wood to manufacturers.
The bamboo sector in the country has untapped potential for business exploitation, according to Shewayirga Assalf, assistant professor of Entrepreneurship & Business Management at Kotebe Metropolitan University.
Ethiopia has the largest bamboo forest cover in Africa; however, it is unutilised since the export earnings from bamboo poles earns less than a quarter of a million dollars. The nation invests an average of 5.7 million dollars to import bamboo plywood, pulp and paper, furniture and flooring.
“This project can be crucial for these small and medium-sized enterprises by bringing them new opportunities and business ideas,” said Shewayirga. "The project may bring them new market channels and make the enterprises turn to creativity."
However, the programme might not sustain the businesses as it is temporary, according to Shewayirga. He suggested that while the businesses can manufacture products using the capital and experience offered by this project, a lack of demand may be a daunting obstacle to their success after the project is completed.
The expert recommends that the enterprises develop market chains by diversifying their products. He advised that they look into things such as furniture, shelving, flooring and toothpicks and adapt according to the demand.
The businesses should look for market potential and work with cooperative unions to easily access raw materials, according to Shewayirga, citing market chain challenges, lack of startup capital, insufficient team development, inadequate workspace, and the shortage of raw materials as the main bottlenecks to the sector.
A recent study conducted by the Authority on the small and medium-scale industries offers corroborating findings. The study highlighted that the industries are suffering from an electricity supply shortage and a lack of startup and working capital in addition to the problems mentioned above. The small and medium manufacturing industry currently employs 89,000 people.
The Authority hopes to help establish 3,072 new enterprises and create 140,000 jobs in these industries by the end of this fiscal year, according to Robel.
During the previous fiscal year, 1,716 new small and medium-scale businesses were established, and a total of 1.8 billion Br in loans was provided to 1,891 businesses.
PUBLISHED ON Oct 17,2020 [ VOL 21 , NO 1068]
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