Legacy Businesses in a Liminal Era

Apr 19 , 2025.

At first light in Addis Abeba’s Qality District, the smell of freshly roasted Yirgacheffe beans drifts into the yeasty haze from Shoa Bakery’s ovens, a blend that sums up Ethiopia’s family firms. Such outfits are scarce everywhere, yet in Ethiopia, roughly 40pc are run by second-generation heirs and a small but rising troupe by a third. On average, these “legacy” businesses are 30 years old, teenagers in company terms, old enough to feel the strain of succession, governance and capital.

Heleanna Georgalis felt that strain when her father died in 2008 and left her Moplaco Trading Plc with, as she says, “zero rehearsal time.” Relatives doubted a linguistics graduate could read a ledger; she countered with charm and spreadsheets. Seventeen years later, Moplaco ships 1,000tns of speciality beans to Europe each year, generating about seven million dollars in sales and still finishes some jute bags by hand to keep 84 year old staff employed.

Graffiti above the cupping table declares, “Power is in the unity.” She laughs that unity vanished in the tea-fuelled meeting where cousins tried to block her appointment. But, she understood and never holds grudges.

The Asfaw siblings keep their heads down at Chamber Printing House. Founder Asfaw Tefera turned a 4,000 Br loan in 1965 into presses now rolling out labels for MOHA soft drinks and East Africa Holdings, pulling in 120 million Br a year. Their motto is “Always fly under the radar.” Mathematician-turned-manager Tsegaye Asfaw shelved actuarial dreams to rescue the company and answered to “Tsegish” in a boardroom where siblings trade barbs but rarely vote.

In Lideta, the Belay brothers rule sponge cake keeps 200 employed. Their father once sold slices to schoolchildren for five cents; the same piece now costs 60 Br, a 1,100pc real terms jump even after decades of currency erosion. The company works to a scribble in a coffee-stained notebook: “Better small money from many people than big money from a few.” Volume, not margin, shields them from Ethiopia’s whipsaw wheat prices. “No customer leaves angry today,” says co-owner Amanuel Belay. A stale cake starts a rumour; a rumour empties the till; an empty till splits brothers.

Bread still means comfort, and Shoa Bakery remains Ethiopia’s security blanket. Founder Zemui Zemuye sold 20 loaves for a Br.: his children now run 14 branches plus flourmilling and pasta lines. Heir Tsehaye repeats a hard learned axiom: “Don’t put all your eggs in one basket.” That saved the bakery in 1985 when the military government seized imported machinery and nearly, as he puts it, “sank the dough.” Diversification kept the ovens hot through blackouts and devaluations.

Furniture maker WARYT Mulutila International began when a tenant short of cash paid rent with sofas. Director Tihitina Legesse, a psychology graduate turned MBA, kept her grandmother’s name and reverse-engineered it into corporate scripture: “Work and Reach Your Target.” Her tip, “Sustainable leadership needs self-care”, makes industrious elders groan. A slipped disc suffered by founder Legesse, her father, in 2004, pushed the firm to adopt organograms and delegation.

GetAs Group, the Getu-Asrat clan, began as a textile stall in 1975 and has now expanded into logistics, real estate and asset management. A golden jubilee party doubled as a drill for succession rules meant to bridge three generations. Executive Samuel Getu says, “Integration of third generations is just starting,” then salutes his father’s maxim: “Walk together if you want to walk far.”

Nephew Natnael Yohannes first took a temporary job at the Makush gallery and restaurant while studying law and “developed the business organically over time.” He assumed full control following his uncle’s death three years ago, saying. He now steers what he calls an “intersection of heritage and innovation.”

Ethiopia hosts about 330,000 registered businesses, yet fewer than five percent see a third generation, according to data from the Addis Ababa Chamber of Commerce. These seven outfits beat the odds with mythmaking, selective nostalgia and catastrophe memory. Antique mixers sit beside cloud-based stock systems. But the ground is shifting. The Birr has lost its official value in five years; annual inflation hovers near 20pc (yoY) and wage bills demand margin. MBA armed heirs returning from overseas bring talk of modernisation.

An HST Consulting survey offers sharper numbers. Founders still hold a majority stake in 43pc of firms, but children already steer operations in sectors from food to pharma. The typical legacy business spans three industries, a hedge against a tough economy.

Half the companies have no board of directors and 85pc lack family councils, structures that experts call shock absorbers for intergenerational tension. Skills gaps are acute in strategy, digital transformation and succession planning; four-fifths have no written CEO succession plan, and only 13pc have named a next chief. Nearly 44pc employ between 100 and 500 workers, while almost a third have more than 500, making them vital to long-term capital for value-added manufacturing or regional exports.

Capital markets may jolt change. The Ethiopian Securities Exchange (ESX) is courting family companies with minority listing options that offer fresh equity without surrendering control. Cash could fund the leap from resilient survivors to disciplined multinationals. But obstacles persist. Power cuts linger, logistics costs rank among Africa’s highest, and politics can freeze supply chains overnight. Shoa mills its own flour; Chamber stockpiles imported inks; Moplaco bets on quality.

Whether these dynasties can maintain unity, or continue printing, roasting, and rising, will shape Ethiopian enterprises at 100 as much as it does at 50. Culture, not kit, may prove decisive, but a wry cousin still voices the safest bet: never wager against a family that hoards its vintage mixers. AKSAH ITALO, senior editor, has interviewed these custodians of legacy companies.

PUBLISHED ON Apr 19,2025 [ VOL 26 , NO 1303]

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