Ride to Deficit: Stifling Innovation and Discouraging Entrepreneurship is Economic Malpractice for Ethiopia

Posted on September 22, 2019 by Design in Design Innovation | 0 Comments

In yet another move that is at once baffling and negligent that is endemic of governance in Ethiopia, the Addis Abeba City Administration Transport Bureau issued a directive banning the use of commercial cars for ride-sharing services. Over the past two years, home grown companies like ETTA, Zayride and RIDE identified a need and built a business model that emulates Uber and Lyft. In a move meant to eradicate this emerging industry, the new edict undermines competition and restricts public transportation options.

Under normal circumstances, entrepreneurs who leverage technology and provide solutions for consumers are celebrated; not so in Ethiopia where almost non-existent business loans, graft that protects insiders and policies that benefit foreign investors while indenturing Ethiopians makes it nearly impossible for Ethiopians to succeed on their own terms.

Though “public safety” was cited as a justification for the Transport Bureau’s heavy-handed tactic, Ethiopians who have been tied up with red-tape and bribes know that the most likely reason for this senseless decree is corruption. Too many public officials would rather leverage their positions and seek kickbacks from the very industry they are supposed to be regulating, behind the Orwellian talk of “encouraging competition” by eliminating options is money that exchanges hands in the night.

If Ethiopia is to rise out of “multidimensional poverty” and compete in the global economy, it will only be possible if we build our own industries, empower Ethiopians locally and become exporters of finished goods. As it stands, Ethiopia exports $2.5 billion worth of products annually (mostly raw commodities) and imports over $13 billion from other countries; this $10 billion gap is nothing short of economic colonization.

Turning this paradigm around requires an economic development plan that develops the people of Ethiopia. Courting cash from foreigners for the sake of building shiny skyscrapers and augment infrastructure that makes it easier for multinational corporations to transfer our resources overseas to become finished goods and sold back to Ethiopia at a premium is only going to ensure poverty into the future. The job of the Ethiopian government when it comes to the economy should be first and foremost to look out for the interests of Ethiopians instead of “privatizing” key industries into the hands of non-Ethiopians.

This is why it is so disheartening to see the Addis Abeba Administration putting up a road block to Ethiopian owned and Ethiopian operated ride sharing companies. Instead of encouraging fresh ideas and inspiring young Ethiopians to push the envelope, bureaucrats would rather stick with the status quo. Yesterday afternoon, Samrawit Fikru, the founder of Hybrid Design and the CEO of RIDE, posted a most disheartening tweet defiantly noting that she won’t abandon Ethiopia even though her company was just effectively banned.

Prime Minister Abiy Ahmed’s administration and his economic team must really think twice about the future direction of Ethiopia. A couple of days ago, Abiy struck all the right chords about collective wellness being more important than ethnic grievance while being interviewed on Sheger radio. However, words alone do not feed mouths—policies have to match rhetoric. When people feel helpless and are being gashed by poverty, tribalism escalates in the process. Only by giving people hope for the future and creating a sense of ownership can Ethiopia reduce strife.

Consider this fact, close to 70% of Ethiopia’s population are 30 years old or younger. This is can be a weakness or a strength depending on how we address the economy going forward. If Ethiopia is able to unleash the energy of the youth and tap the reservoir of intellectual capital that is found in this emerging generation, the sky is the limit.

If the play is to turn #Ethiopia into a destination for the cheapest source of labor and there is no plan to create our own industries, the only future that awaits Ethiopia is scarcity in the land of plenty.

The way to economic self-reliance is through empowerment.
Focusing on the supply side of the equation by turning people into menial wage
workers will only enrich a few while indenturing millions into a life of
indigence. What the Ethiopian government must do is foster an atmosphere of collaboration
and entrepreneurship by providing access to capital to Ethiopian businesses,
microfinancing local initiatives and granting lands instead of putting
roadblocks in front of innovative Ethiopians.

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