TRALAC - Trade Law Centre

Ethiopia: Local businesses to walk globe through export path program

Tuesday, 07 April 2009

Source: Addis Fortune (Ethiopia)

Meselech Habte – one of the over 70 participants in the training session organized by VEGA-Ethiopia last week, a USAID sponsored programme that promotes Ethiopian businesses using the African Growth and Opportunity Act (AGOA) - is engaged in producing health and beauty care products.

She is among the businesspeople who aspire to have their products penetrate the US market; they hope the day-long training they took part in organized by the Ethiopian Chamber of Commerce and Sectoral Association (ECCSA) and VEGA-Ethiopia, would help them find a way.

After spending nearly 10 years in the business, Meselech considers the training as one opportunity to improve her business and start exporting her products - DM massage rollers and wooden hand-made massage equipment - to US consumers.

“I have introduced my products in different exhibitions and trade fairs over the years,” she said. “Now I want to export to the US market.”

The training held at ECCSA’s conference hall last Wednesday, April 1, 2009, was meant to help such Ethiopian micro businesses improve the standard and quality of their export products to the US market. This is achieved through the promotion of the products to consumers other than the Ethiopian community in the same country, and developing a culture of applying contemporary communication systems, such as electronic mail (e-mail).

But these are not the only problems.

“One of the challenges is that there is no packaging industry in the country,” Addis Alemayehu, VEGA-Ethiopia’s chief of party, told Fortune.

The mostly traditional business practice, lack of experience and the attitude that e-mail or Internet is a luxury are among the other challenges, according to Addis.

He considers this gap as a business opportunity for both domestic and foreign investors; thus advises establishing packaging companies as being lucrative.

Not more than five of the businesses that participated in the training have had the experience of exporting their products; nor have they ever participated in this type of training. After all, it is the first time VEGA-Ethiopia has organized such an event in conjunction with ECCSA.

Dubbed “Export Path Program,” the training has previously been held in several African countries, including Ghana, Nigeria and Liberia.

Emeka Nwankwo (PhD), from Vertical Optimization was the trainer. Vertical Optimization is a Washington based consultancy firm specializing in business development, product design, process and technology development, new markets and international development.

Nwankwo was born in Nigeria and obtained a Chemical Engineering Doctorate Degree from Columbia University, New York, in 1994. He has been the Chief Executive Officer of Vertical Optimization since 2006, and is also founder and Chairman (from 2003 to 2006) of Aquada Development Corporation Ltd, an international technology and manufacturing development firm based in Montchanin, Delaware, US.

It is the methodology, a well structured and disciplined process for assisting exporters develop their products; and it is about getting ‘Green Cards’ to the products, Nwankwo told Fortune.

“It is about making and selling high quality products in the international market,” he said.

Export Path, according to the trainer’s presentation, is essential for four reasons: international trade promotion is hard; the challenges of the public and private sector exacerbates these barriers; increasing competition in the international market does not help; and limited operational capacity in the private sector is a major impediment.

Phase One of the training is identified as Upstream Operations, which will work on access to information that is directly related to the product.

For instance, what kind of product is it? How much is it worth? What kind of package size and type is suitable with a branded package? How does the exporter find customers and how much will these customers be willing to pay? These were the points of discussion at the training session.

“Midstream Operations,” the Second Phase, deals with access to financing and capacity to put the product together.

Access to the market place is dealt with in the Third Phase, VEGA-Ethiopia has been instrumental in boosting Ethiopia’s earnings from exports through AGOA, especially from textiles, Addis told Fortune. Ethiopia’s earnings through AGOA have grown from three million dollars in 2005 to 18 million dollars in 2008.

If the training given is something that business people like Meselech can implement in their business to further penetrate the US market, perhaps it will be credited for fostering yet another increase in earnings through AGOA.



“ Latest AGOA Trade Data currently available on AGOA.info


Click here to view a sector profile of Ethiopia's bilateral trade with the United States, disaggregated by total exports and imports, AGOA exports and GSP exports.


Other regularly updated trade statistics on AGOA.info include: (click each link to view)

  • AGOA-Beneficiary Countries’ AGOA and GSP Trade Aggregates

  • AGOA Trade by Industry Sector

  • Apparel Trade under AGOA’s Wearing Apparel Provisions

  • Latest Apparel Quotas under AGOA

  • Bilateral Trade Data for all AGOA-eligible countries individually.