Small Businesses Graduate to Medium Enterprise Status

A total of 208 small enterprises in Addis are certified as medium enterprises

The Addiss Abeba Micro & Small Enterprise Bureau of the City Administration certified 208 micro and small business enterprises operating in 10 Districts to medium enterprises last week. This certification is achieved when enterprises acquire between half a million Birr and 1.5 million Br in capital.

Enterprises engaged in manufacturing are required to show 1.5 million Br in capital, and service providers have to register half a million Birr capital.

The certified businesses are engaged in manufacturing, services, construction, trade and urban agriculture.

The Bureau conducted evaluations to determine whether the enterprises fulfilled certain requirements, including capital, job creation, production capacity, technology usage, corporate responsibility and marketing strategy.

To conduct the evaluation, the Bureau formed a committee with 22 members from its audit and law departments. After the committee examined the backgrounds of the companies and evaluated their performances, those enterprises receiving 85pc or higher scores were graduated to the next level.

“We made deep and detailed study and observations during the process,” said Awol Mohamed, director of Enterprise Transformation and Support at the Bureau.

The committee presented its findings and endorsements of the selected enterprises to the management of the Bureau, which made the decision.

The qualified 208 business had received workspace, finances, training and market linkages through the Bureau, have now graduated from the city program and will be transferred to the purview of the Ministry of Industry and Investment Commission.

Since the launch of the city’s micro, small and medium enterprises classification system in 2010, a total of 34,000 enterprises have registered in the capital. So far only 1,500, or roughly four percent, of these businesses have graduated from the micro level to the medium-enterprise level.

Berhanu, Hiwot & Menen Garment is one of the enterprises that graduated and received certification as a medium enterprise. The company was established three years ago by three individuals with 30,000 Br in capital.  Their company, located in Nifas Silk close to Kadisco Paint & Adhesive Industry S.C, manufactures uniforms, T-shirts and other garment products.

“Our capital has reached three million Birr,” said Birhanu Debabaw, one of the co-owners, “and we also have hired 35 people.”

Another business that received the certification recently is Zewdu, Reda’e & Friends Poultry Farm, located in Ferensay Legasion of Yeka District. The business was started by four individuals with 18,000 Br in initial capital, which has now risen to 2.1 million Br today, and currently rears 10,000 chickens that produce approximately 6,000 eggs a day.

“We are challenged for space and working area,” said Reda’e, one of the partners. “Our current site cannot accommodate us, as we have expanded our capacity.”

As a result of the failure of the Ministry of Industry and the Ethiopian Investment Commission to provide support to businesses, many businesses are not interested in being upgraded to the medium enterprise level, according to Awol.

“Local businesses are getting less focus and supports, unlike the foreign companies,” he said.

Jemal Abagissa (PhD), a lecturer at Addiss Abeba University for the past two decades and with expertise in small and medium enterprises, believes that these businesses play a significant role in the economy.

“These companies could fuel the country’s industrialisation agenda,” he told Fortune.


Published on Sep 22,2018 [ Vol 19 ,No 960]



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