It's better late than never:Ethiopian Chamber Of Commerce outlines new strategy
It is evident that the private sector has a number of internal and external challenges to grow as it has emerged particularly over the last two decades. Some of the internal weaknesses of the private sector include traditional organizational structure, weak financial positions and skill, limited exposure to international trade practices, lack of dynamic entrepreneurship and non-optimal size of enterprises.
Aside from its own weaknesses, the growth of the private sector has been challenged by a number of problems including a less favorable business climate (compared to some thriving African countries), a weaker judicial system and poor access to finance being some of the major ones.
While these problems were some of the most noticeable challenges the private sector has been facing, the other major weakness of the sector that has been little noticed was its failure to design a strategy that will help it to come out of the challenges and thrive, thereby contributing something dynamic to the growth of the economy.
Although belatedly, the business community has now, however, come up with a strategic document that might help it thrive and pave the road to a private sector led economic growth in the future.
Commissioned by the Private Sector Development Hub (PSD hub) of the Addis Ababa Chamber of Commerce and Sectoral Association, the strategy simply identifies the elements hindering the growth of the private sector and put in place the mechanisms to address the problems.
The document has three parts, the first one dealing with strategic direction. It consists of three distinct but interrelated phases designated as institution building and self-discovery, consolidation and transformation, and steady growth and economic leadership.
The institution building and self-discovery, the first and major phase includes the revision of the commercial code, modernization of company register, institutionalization of corporate governance, standardization of accounting and auditing, capital market development, introduction of competition policy, development of a public-private sector policy dialogue and policy study platform.
The second phase is a strategic direction where the sectoral diversity and size of the private sector gets consolidated and the private sector transforms itself in terms of business conduct, growth and expansion in domestic market and beyond
The third phase envisions a vibrant private sector with full capacity that competes both in the domestic and foreign markets, big companies that subcontract medium and small companies and closely work with multinational companies and firms that can conduct their own research and closely work with academia in the area of basic research
The second part of the strategy addresses the major challenges confronting the private sector. It provides an analysis of the challenges and the measures that need to be taken to address them. The strategy is also in harmony with the government’s Plan for Accelerated and Sustainable Development to End Poverty.
According to its authors, the study is motivated by several factors, including the need to highlight the pivotal role of the private sector in enhancing the country’s economic growth and formulating a road map that the private sector needs to engage with the government to promote private sector development.
The need to establish a framework for carrying out an in-depth, sector specific problem identification study, which is technical, specific and rigorous, that the private sector can use in identifying the challenges facing a particular sector and how these challenges may be overcome is the other motivation for launching the study. The need for such sector specific problem identification studies cannot be overemphasized as they serve as a good basis for engaging and negotiating with the government on the best way forward for removing obstacles and overcoming challenges facing the sector, according to the authors.
In the last part of the study the experiences of successful Asian and African countries are presented in the hope that they could contribute something towards seeking solutions to the major problems that the private sector here is facing from various dimensions: the business climate, the judicial system and property rights, corporate governance, and the challenges of both the macroeconomic environment and the global trading system by learning from those experiences.
The study articulates the problems at a general and institutional level with the objective of making the document an instrument to initiate a dialogue with the government. The problems and challenges for doing business here include the business climate for the private sector, the judicial system, property rights, corporate governance, competition policy and private sector development, and the financial sector.
The Addis Ababa and Ethiopian chambers of commerce this week organized a workshop to familiarize the heads of regional and urban chambers of commerce and sectoral associations with the strategic document.
VOA 13pm GMT
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