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Cordaid NL
Private Sector Development

Creating resilient businesses in Ethiopia

Cordaid has successfully supported 53 local small and medium-sized enterprises in Addis Ababa, the capital of Ethiopia. Since April 2015, the Resilient Business Development Services program (RBDS) has been providing them with training, coaching, mentorship and expert seminars. The goal of the program is to create more jobs for the struggling population in the poorest neighborhoods of the city.

“I like my neighborhood”, says Woynshet Birru. “Even though there is a lot of poverty and hardship.” Woynshet lives in Mekanisa, a slum area in Addis Ababa. She is 23 years old and 8 months pregnant with her first child.

Garbage dump

Her street ends right at the foot of a hill. What looks like a scenic elevation from a distance, is, in fact, a giant garbage dump. In 2017, 65 people died when heavy rains caused a mountain of trash to turn into a deadly landslide. On sunny days, when the hill does not form a direct threat to the residents of Mekanisa, it produces a terrible stench, that can be very detrimental to their health in the long term.

Still, Woynshet praises her neighborhood. For its residents, who always look out for one another. And for its vicinity to her work. Every day she walks 30 minutes to the factory of AT Textile, where she sits behind her sewing machine to make all different types of clothing.

“I’m happy to have a job. I need it to pay the rent and buy clothes. My husband also works but it happens sometimes that he is without an income. Then my family can rely on my income. But it’s not only that. I also want to work to stay active and keep myself occupied.”

Resilient businesses Ethiopia

Woynshet standing in her street in Mekanisa. The hill in the background is the garbage dump that is a constant threat to the residents of the neighborhood. Photo: Mickael Franci / Cordaid

Ambitions

Woynshet might already be more fortunate than most of the other young girls in her area, just because of the fact that she has a job. However, that does not mean her ambitions end here. “In a few years, I would like to run my own business. Something similar to where I work now. So my child can have a better future.”

“What differentiates Cordaid’s program from other types of training, is that there is also coaching involved.”

AT Textile is a clothing manufacturing company in Addis Ababa. The business is looking to expand but met its limits in the number of employees it can accommodate in the workspace. Also, they were having troubles with financial management and marketing. Cordaid supported AT Textile through training and coaching.

Watch this video about Cordaid’s RBDS program in Ethiopia:

Extreme poverty

Ethiopia might have one of the fastest growing economies in Africa, many of its inhabitants still live in extreme poverty. Being able to work and earn a steady income is not within reach for most people living in the slums of the city or the remote countryside.

Cordaid has searched for businesses that have already proven to have what it takes to compete in both the local and international market but just need that final push to really get there. By strengthening these companies, more jobs will become available and in the long run, a large number of people will benefit from the economic growth.

“Ethiopia is one of the top producers of teff. We should be able to bring it to the world.”

Even when a company is successful in its core activity, there might be other factors that block its ability to expand and hire more employees. That is the experience of Dengel, already a well-known brand in Ethiopia. Now they want to export their nursing pillows to the countries in the region and compete with other brands.

Big step forward

“When we joined Cordaid, the training solved one of our major problems”, says Dawit Desta, CEO of Dengel. “We lacked technical expertise. So we took courses in financial management, human resources management and marketing. This really made us take a big step forward. Now I see a lot of room for us to grow and become an international business in the near future.”

Resilient Businesses Ethiopia

Dawit Desta, CEO of Dengel. Photo: Mickael Franci / Cordaid

Another company with great export potential is EthioGreen. In a small factory on the outskirt of the city, they are baking injera, the typical Ethiopian flatbread made from teff, a type of grain native to Ethiopia. Teff is gluten-free, protein-rich and on the verge of growing out to be the next superfood. “Right now, we are focussing on export for the Ethiopian diaspora in the United States”, says Rahel Moges, General Manager of EthioGreen. “Ethiopia is one of the top producers of teff. We should be able to bring it to the world.”

Moges is delighted with the outcome of the training her company received from Cordaid’s program. “Cordaid’s coaching really took us forward in what we need to do as an exporter, how to manage the inland revenue systems and how we do our documentation.”

Resilient Businesses Ethiopia

Meskerame Kumela (22), at work in the injera bakery of EthioGreen. Photo: Mickael Franci / Cordaid

Dawit Desta of Dengel is equally excited about his participation in the RBDS program and recognizes a uniqueness in the approach. “What differentiates Cordaid’s program from other types of training, is that there is also coaching involved. Somebody is looking at you, at how you are doing things practically and gives you detailed feedback from a professional point of view.”

Stability Impact Fund

In September 2018, Cordaid is starting the activities for the fifth batch of small and medium-sized enterprises in Addis Ababa. This part of the program will be integrated with Cordaid’s investments branch. Through the Stability Impact Fund, the businesses that were deemed ready for investment can get better access to finance and do a much-needed investment to further their own dreams and those of Ethiopia.

The implementation of this program has been done in close collaboration with R&D. This partner organization has delivered the training and coaching sessions on behalf of Cordaid.

Look at more pictures from the businesses Cordaid has supported through the RBDS program:

Creating Resilient Businesses in Ethiopia