Micro and Small Enterprises Development Achievements in Addis Ababa

1. Trade and Industry Bureau Addis Ababa Micro and Small Enterprises Development Achievements in Addis Ababa June 2005

2. Definition: The working definition of MSE • in Ethiopia is based on capital. 1.1Micro Enterprises:- are those business enterprises with a paid up capital of not exceeding Birr 20,000 (about $ 2326), and excluding high tech consultancy firms and other high-tech establishments. 1.2Small Enterprises: are those business enterprises with a paid up capital above Birr 20,000 and not exceeding Birr 500,000 (about $ 58,140), and excluding high-tech consultancy firms and other high-tech establishments.

3. No. Industrial Group Number of Establishments Persons Engaged 1 Informal sector operators 127,318 167,404 2 Handicraft/Cottage Industries 47,848 72,308 3 Small Scale Manufacturing Industries 3,836 11,369 Total 179,002 251,081 2. Size of MSE’s in Addis Ababa

4. No. Sub-Sector No. Of Enterprises based on capital (in birr) Total No. of Enterprises Sub. Sector Share in % <=5,000 5,001 to 20,000 20,001 to 200,000 >=200,001 1. Whole Sale 876 1,129 1,317 503 3,825 4.2 2. Retail 26 404 11 228 3,001 537 41,170 45.2 3. Service 13,107 14 132 13 820 1686 42 745 46.9 4. Industry 535 991 872 593 2,991 3.3 5 Agriculture 72 169 69 18 328 .4 Total 40 994 27 649 19,079 3,337 91,059 100 Percentage 45 30.4 20.9 3.7 100 3. Licensed Enterprises in Addis Ababa . SourceT&IDB,2004 eth.c

5. TThe size of the sector:- -        - 68 643 (75.4%) are Micro enterprises. -        - 19, 079 (20.9%) are small enterprises -       -   3,337 (3.7%) are small including medium & large Enterprise TThe size of the sub-sectors -        - Retail & service Enterprises = 83,915 (92.1%) -        - Whole sale, Agriculture, Industry = 7 144 (7.9%) TThe whole Business is Dominated by MSE’s = 87 722 (96.3%)

6. 4 Constraints Facing the sector Based on the rapid assessment survey conducted (1995 Ethc.) in 11,000 enterprises in the city the main constraints identified were:- -Lack of working space for production and marketing. -Shortage of credit and finance -Regulatory problems (licensing, organizing, illegal Business etc.) -Poor production techniques. -In put access constraints -Lack of Information -Inadequate management and Business skill -Absence of appropriate strategy

7. 5. Selected Sub-sectors for Intervention -Textile and Garment -Food Processing -Wood & Metal Works -Construction -Municipal Activities

8. 6. Reasons for selection -Large market size for their product -Employment observation capacity -Short period of return over Investment -High role for poverty reduction

9. 7 Target Groups -TVET graduates from different fields of studies. -Poor and un employed women. -Street vendors -MSE operators under high risk -Disabled people with different skills. -All Enterprises in the selected sub sectors

10. 8. Achievements 8.1 Preparation of Business plans for 3 sub-sectors namely: –    Textile and garment –    Food Processing –    Wood & Metal Works 8.2 Different types of Income generating projects implemented - Kiosk shops - Urban agriculture - Eat fruit Tents - Car wash - Sunday markets - Mobile kitchen - Leather crafts - Compost etc. 8.3 The urban land leasing is made to address the problem of working and marketing space for MSE’s. 8.4 All extension Agents were trained in different business skills with the help & support of G.T.Z, Femseda and the Bureau.

11. 8.5 Restructuring of the Bureau • –Trade and Industry development Bureau is restructured focusing on MSE promotion Thus: • –The Bureau has two deputy heads one for the MSE promotion and the other for Business licensing, Registration & Promotion. • –MSE promotion is made to include • The Enterprise Development Department. • Marketing Department • Co-operative Department • Urban agriculture Department • –The sub city Trade & Industry Office is made to manage: • MSE team • Cooperative team • Urban Agriculture team • Trade & Industry Registration & licensing team. • –The Kebele MSE Office handles the one stop service center and the extension Agents (usually 5 in each kebele)

12. Restructuring … • 8.6 The BDS service is introduced and implemented. • 8.7Addis credit and saving share company’s policy is improved to include more service product and increase its out reach. • 8.8 All the micro Financing institutions in the city (seven of them) are organized to have a proper Networking. They have prepared a proposal for the City Government, produced a common poster for promotion and their Brochures are distributed to all kebeles of the city. • 8.9 MSE councils and committees are established to help in the promotion of MSE. • –MSE councils at the city level, sub- city & kebele. • –MSE committee from the Advisory council of the city government.

13. Restructuring … 8.10 All the kebeles in the city are made to provide one stop service to all MSE operators and to the New interies focusing on:- –Provision of premises for production and sales. –Technical and managerial training for the operators. –Marketing. –Provision of Business Development Services. –Provision of appropriate Technology –Provision of credit. –Provision of Information –Licensing and legalization of Businesses.

14. 9. Stakeholders working in the promotion of MSE The Bureau (MSE Sector) was clothly working with:- 9.1 Government offices & Bureaus 9.2 Micro Financing Institutions – In the provision of loan 9.3 TVET’s - skill test, skill gap training 9.4 Productivity improvement center (PIC) – Training, skill test, prototype development, research etc.. 9.5 NGO’s (MSE-Forum, GTZ, Plan Ethiopia, wise, concern etc.) Training& Marketing Promotion. 9.6 MSE councils – At City, Sub – City, and Kebele level Advisory and promotional support. 9.7 MSE committee of the Advisory council of the City Government – Advisory support. 9.8 Project support unit-(EU-Fund) – in Training fund support. 9.9 Private Enterprises, NGO’s and Government Work shops – in the production of looms for weavers handcrafts for Dry wast collection, etc.

15. 10.1 Metal & Wood Works Clusters

16. 10.3 Food Processing Clusters under construction

17. 10.5 Textile & Garment Cluster Under Construction

18. 10.11 Promotional Support for MSES Sept. 2003 - June 2005

19. 10.12 Problems encountered • Lack of skilled man power at the sub-city level. • Low level of awairness of MSE’s as an area of job creation in general . • Low interest for Trainings, workshops on the part of operators. • Lack of managerial skills of operators • Individual request for plots of land