Yohannes Tesfaye is a 24-year-old entrepreneur building and operating his trade in Ethiopia’s Gambela region, which shares a border with South Sudan.
Tesfaye did not qualify to join a university; instead, he teamed up with his friends and started a carpentry workshop in 2015. He claims that his business has steadily picked up.
According to AfricaNews, Tesfaye remarks, “We started this job with an initial capital of about 700 US dollars. Currently our profits have reached about 9,000 US dollars. At the beginning it was only three of us doing the work but we have since been able to employ nine people.”
Yohannes and his partners have been able to expand their business through funding from a government-run micro-finance enterprise.
Despite the progress that Tesfaye has seen, the same cannot be said of the majority of Ethiopian entrepreneurs–even though the Ethiopian market is among Africa’s fastest growing economies.
This is due to their lack of access to credit, especially for private entities. According to reports, out of 90 million people, only few have bank accounts. The range of credit services Ethopians can access is very limited.
The driving force behind Ethiopia’s nevertheless growing economy is its state spending, which has allowed the country’s economy to see double-digit economic growth.
Lastly, the International Monetary Fund (IMF) is urging Ethiopia’s government to cut back on public spending, which it claims is suffocating private spending and restricting the private sector’s access to credit.
