Growth of youth-owned MSEs in Ethiopia: characteristics, determinants and challenges

The study examines the factors that influence the growth of youth-owned MSEs in Ethiopia using a sample survey of 909 operators which were selected through a multi-stage random sampling techniques. The result of the cross-tabulated descriptive statistics showed that the personal attributes, firm characteristics, inter-firm cooperation and policy predictability affected the growth of the MSE operators. Growth rate was also influenced by the diverse and heterogeneous character of the youth-owned MSEs. Unlike many other studies, the findings of this study reveal that the average growth rates of microenterprises are much lower than the small enterprises. Female-owned firms registered relatively lower growth rate compared to their male counterpart. The results obtained from the regression indicate that among the personal attributes of youth MSE owners: education, sole ownership form of business organization, small enterprise category, experience in similar business, and gender (male MSE owners) are significant variables which positively influence the growth of the youth operators. Out of the firm-level attributes, access to training before starting business, social networking and access to loan are statistically significant variables which negatively affect growth rate. On the other hand, access to product markets, future plan of the enterprises, saving culture, size of start-up capital and current capital are found as significant variables influencing the growth of youth-owned MSEs. The predictability of policies and inter-firm cooperation are also found to be significant variables affecting growth and expansion of youth-owned MSEs. Since the growth rate of microenterprises and women-owned enterprises are lower, the study suggests revisiting the current support program by crafting tailored interventions. Moreover, although inter-firm cooperation and policy predictability affect the growth of youth-owned MSEs, due focus should be given to improve social networking and building the trust and confidence of the operators on government policies and strategies.Keywords: Youth-owned micro and small enterprises (MSEs), Growth rate of firm

Growth, structure and firm dynamics in grain markets: the case of grain traders in Ethiopia

In this paper we consider the microeconomic evidence on the determinants of firm performance in Ethiopia, with a focus on grain traders. We analyse both internal and external factors, and the relative impacts of these factors on the performance of grain traders. Different economic indicators seem to suggest that grain traders have become increasingly unviable as reflected by absence or stagnation of growth. These firms suffer from a host of internal problems (e.g. weak human resources and other assets) and of external factors such as access to credit, market facilities, policy and regulatory framework, etc.). Hence without renewed focus on promoting firm growth, especially grain traders through improving access to warehouses, relaxing credit constraints, and improving the macroeconomic and regulatory environment, not only grain traders but also rural and urban households will face a very uncertain and untenable future which will hamper the performance of grain markets and the battle against poverty and food insecurity.Keywords: Firm, growth, grain traders, Ethiopi

Why closing the gender gap is vital to Ethiopia's youth self-employment programme

In 2012 young people between the ages of 15 and 34 account for 43 % of the total urban population in Ethiopia. A series of government initiatives have been launched to promote entrepreneurship among youth. The government’s Micro and Small Enterprises (MSEs) sector development strategy focuses on expansion of technical and vocational education and training (TVET). The brochure covers how female-owned enterprises face specific extra challenges during both start-up and operational phases. The growth of female-owned enterprises is pivotal to reducing overall high unemployment rates as well as advancing sustainable livelihoods for all

Enhancing livelihoods for young people in Ethiopia

The Youth Self-Employment in Ethiopia survey data indicates the need for school-to-work targeted transition schemes that relate to demands of the economy as well as to the aspirations of young people. Existing private-sector employers are incapable of absorbing the rising numbers of young people entering the workforce. A viable strategy for public authorities would encompass creating conditions for young people to establish their own businesses. The brochure provides information on labour markets and youth, along with recommendations for policy. Young people seeking wage employment or self-employment opportunities have little access to relevant information

The characteristics and determinants of entrepreneurship in Ethiopia

Using Global Entrepreneurship Monitor (GEM) approach, the study analyzes the characteristics and determinants of entrepreneurship in Ethiopia. Primary data are collected through the Adult Population Survey (APS) and analyzed using Probit model. To overcome the hetroscedasticity problem, which is prevalent in cross section studies, robust standard errors were employed. The findings of the study reveal that about 53% of the adults in Ethiopia are potential entrepreneurs. The perceived opportunity rate in Ethiopia (65%) is above the average for factor-driven economies (63%); while the perceived capabilities rate (69%) is below the average for factor-driven economies (71%). Ethiopia’s rate of entrepreneurial intention (22%), early-stage entrepreneurial activity rate (12.2%), and established business activity rate (8.3%) are below the average for both factor-driven economies and Sub-Saharan African countries. The econometric analysis indicates that demographic variables such as age, level of education, societal attitude towards entrepreneurship, and social networks (knowing someone in business) are significant in influencing potential entrepreneurship and entrepreneurial intensions in Ethiopia. In early-stage entrepreneurial activity (TEA),"Fear of failure" is found to have a negative and statistically significant effect. On the other hand, the probability of engaging in TEA significantly differs between those living in urban and rural areas. Furthermore, the results provide basic data to develop national entrepreneurship strategy, consistent with the MSE development strategy and other macro and sectoral level strategies. Thus, the low rate of TEA and established business in Ethiopia can be improved by expanding the quantity and quality of support services. Moreover, there is also a need to develop region-specific entrepreneurial development plan to reduce region to region or urban-rural differences.Keywords: Global Entrepreneurship Monitor (GEM), Perceived Opportunities and Capabilities, Total Early-Stage Entrepreneurial Activity (TEA

Low-cost liquid medium for in vitro cultivation of Leishmania parasites in low-income countries

Background: Cutaneous Leishmaniasis (CL) induced by Leishmania aethiopica has two clinical manifestations: ulcerating, self-healing CL and non-ulcerating, non-healing CL. The grossly disfiguring multiple nodules on the face and exterior surface of limbs during non-ulcerative CL are sometimes misdiagnosed as other skin infections. Thus the need for definitive and prompt laboratory diagnosis will be required. Identifying Leishmania parasite by culture method is considered as a definitive method for initiation of treatment and as an effective component of leishmaniasis control methods. Recently the involvement of Fas (CD95) and Tumor Necrosis Factor (TNF) Related Apoptosis Inducing Ligand (TRAIL) induced apoptotic pathways were proposed to be involved in tissue destruction and ulceration during L. major induced CL. Aims: 1) to develop an alternative culture media that could minimize the cost for culturing Leishmania from patient lesions. 2) to investigate if the expression of FasL and TRAIL differs in ulcerating and non- ulcerative CL. Methods: GALF-1 media was formulated in our lab and compared to RPMI 1640 medium and conventional Locke s semi solid media (LSSM) which is one of the modifications of Novy-MacNeal-Nicolle (NNN) culture media. Amastigotes transformation, cryopreservation, recovery of parasites, cost and mass cultivation were analysed. Expression of Fas ligand (FasL), TRAIL and apoptosis were assessed by immunohistology in human skin biopsies from L. aethiopica induced ulcerative or non-ulcerative CL. FasL and TRAIL blocking experiments were performed in a murine model of CL. Results and discussion: GALF-1 is cheap and its ingredients available in a low income country such as Ethiopia. GALF-1 was able to transform amastigotes from Ethiopian patients samples and could be used to cultivate promastigotes in large quantities. Cost analysis showed 80% to 95 % decreased costs as compared to conventional media. Promastigotes cultured with GALF-1 could be cryopreserved in liquid nitrogen with comparable re-culture potential to conventional media. Affordability of diagnostic assays is a key issue for resource poor countries and the possibility to cut the cost of the efficient culture method for diagnosis through the use of inexpensive local formulated reagents could improve the diagnosis of leishmaniasis in low income endemic countries. More FasL expressing cells were detected in dermis of ulcerative CL as compared to non-ulcerative CL and controls. TRAIL expression was higher in ulcerative CL as compared to non-ulcerative CL and controls in both epidermis and dermis. Increased dermal expression of FasL and TRAIL was associated with ulcer formation during CL. This correlated with an inhibition of the ulcerative process in a murine CL model during FasL and TRAIL neutralisation.The mechanisms of the involvement of FasL and TRAIL in ulceration was not elucidated and putative reason(s) for the difference in dysregulation of apoptosis are discussed

Returns to schooling in Ethiopia: The case of the formal Sector

The main objective of this study is to examine and estimate the returns to schooling in one state-owned enterprise i.e Edget Cotton Factory, and one private enterprise i.e MOENCO, both belonging to the formal sector in Ethiopia. The earning function was employed to estimate the returns to schooling using primary and secondary sources of information. The main findings of the study are: (a) human capital variables (education and experience), as estimated by the standard rate of retuns, are most important in influencing wages in the two enterprises; (b) the Mincerian rates of retum to primary, junior secondary, senior secondary, diploma-certificate, and above diploma levels in Edget Factory are 3.3% 5. 5% 2. 8% 18.3% and 11.3% respectively. The Mincerian regression coefficients, associated with primary education, although positive and significant, don’t conform with global patters observed by Psacharopoulos(1994) who estimated highest returns to primary education(c) a comparison of the wages of males and females in Edget Factory, showed that, for the same level of educational attainment, males had higher average wages than females. Women, though having more experience within the industry, had less experience outside of the industry and occupied lower-status jobs;(e) rates of retum estimated using comparative 1985 and 1996 data for Edget Factory reveal that women were paid less in 1996 compared to 1985 and 1996 compared to 1985 , suggesting that their situation in the factory has deteriorated over time. But, for both males and females, a one-year increase in education increased wages from about 9% in 1985 to about 56% in 1996

Growth of Youth-owned MSEs in Ethiopia: Characteristics, Determinants and Challenges

The study examines the factors that influence the growth of youth-owned MSEs in Ethiopia using a sample survey of 909 operators which were selected through a multi-stage random sampling techniques. The result of the cross-tabulated descriptive statistics showed that the personal attributes, firm characteristics, inter-firm cooperation and policy predictability affected the growth of the MSE operators. Growth rate was also influenced by the diverse and heterogeneous character of the youth-owned MSEs. Unlike many other studies, the findings of this study reveal that the average growth rates of microenterprises are much lower than the small enterprises. Female-owned firms registered relatively lower growth rate compared to their male counterpart. The results obtained from the regression indicate that among the personal attributes of youth MSE owners: education, sole ownership form of business organization, small enterprise category, experience in similar business, and gender (male MSE owners) are significant variables which positively influence the growth of the youth operators. Out of the firm-level attributes, access to training before starting business, social networking and access to loan are statistically significant variables which negatively affect growth rate. On the other hand, access to product markets, future plan of the enterprises, saving culture, size of start-up capital and current capital are found as significant variables influencing the growth of youth-owned MSEs. The predictability of policies and inter-firm cooperation are also found to be significant variables affecting growth and expansion of youth-owned MSEs. Since the growth rate of micro enterprises and women-owned enterprises are lower, the study suggests revisiting the current support program by crafting tailored interventions. Moreover, although inter-firm cooperation and policy predictability affect the growth of youth-owned MSEs, due focus should be given to improve social networking and building the trust and confidence of the operators on government policies and strategies

The Performance of Maize and Teff Marketing in Southern Ethiopia

The paper analyses the functioning of Teff and Maize marketing system in southern Ethiopia. The methodology follows the industrial organization paradigm: structure, conduct and performance(S - C-P). The results reveal high market concentration, high barriers to entry in terms of capital and credit, evidence of collusion in the rural market, concentration, high barriers to entry in terms of capital and credit evidence of collusion in the rural market, low market integration, high marketing margin, and high seasonal price variation which indicate the inefficiency of the Maize and Teff marketing system. There are basic constraints such as poor market infrastructure and lack of capital, credit and clear property right law to increase private investment in the food grain marketing sub-sector. In spite of the complex problems after the March 1990 reform, the Maize and Teff marketing system appears to be improving and working better by market structure standar

Managing growth of microfinance institutions (MFIs): balancing sustainability and reaching large number of clients in Ethiopia

The overriding objective of MFIs in Ethiopia is to provide a broad range of microfinance services to large numbers of poor households. This is realized by developing capable and sustainable MFIs. A large number of MFIs have achieved significant progress in terms of both outreach and sustainability. As of June 2005, the twenty six deposit taking MFIs had an active loan portfolio of about 1.5 billion Birr (173 million USD) delivered to 1,211,305 active clients. They mobilized about 501million Birr (58 million US dollars) in savings. The Ethiopian MFIs attained such a significant outreach in a brief period of time. Between 2001 and 2005, the number of clients, volume of loan portfolio and savings increased by 263%, 479%, and 206%, respectively. In 2004, 12 out of the 15 MFIs were operationally sustainable, while 5 were financially sustainable. The majority of the MFIs increased their efficiency and productivity indicators as a result of expansion or increase in outreach. Out of the 15 MFIs, eleven had less than 5% portfolio at risk, which was encouraging. Out of the 13 MFIs which registered significant growth in outreach, 9 showed a remarkable decline in their portfolio at risk. As a result of the increased outreach, many of the MFIs maintained and some improved their portfolio quality. A careful balancing of increasing outreach and sustainability; with a parallel focus on institutional capacity; reducing costs and risks; and improving efficiency, profitability and portfolio quality, is needed to address the financial demand millions of unbanked people in Ethiopia. The specific interventions to increase the growth and sustainability of MFIs include: (a) Improving the institutional capacity of the MFIs by the implementing an efficient organizational structure, (changes in organization culture, structure and systems, for instance, decentralized lending decisions) with appropriate staff incentive and reward system, improvement of the skill of human resource, good governance, introduction of innovative financial products, and the increase of geographic expansion; (b) creating an enabling legal, regulatory and policy environment; (c) improve access to capital; (d) selective government and donor support; and (e) improving the demand side of the equatio