Cognizant of the need to promote private investment in Ethiopia and to assist in the government’s effort in job creation, the Government of Ethiopia (GoE) is preparing a policy that enables the setting up of a local venture capital fund in the country.
Spearheaded by the National Bank of Ethiopia (NBE) and the Ministry of Finance, the new policy is said to put a framework for private financiers to set up a fund for local ventures.
According to Eyob Tekaligh (PhD), who spoke to The Reporter on the sidelines of the fifth Annual Private Equity in East Africa Conference held at Sheraton Addis Hotel on June 13, 2019, organized by the East African Venture Capital Association (EAVCA), this is meant to create an environment for the youth, especially the educated and tech savvy ones, to engage in job creation.
As there is a huge amount of idle capital in the country, positive changes can come by putting this capital together, which a policy change is coming for.
While there are equity financiers in the country, undertaken by seven funds in the country investing in 65 projects amounting to a billion birr; there is about USD 40 and 50 billion of capital in East Africa which Ethiopia is not benefiting from.
“What we have to do for them is help solve their challenges to come to Ethiopia,” Eyob said.
Eyob says that, when we talk about venture capital, we are talking about how a local entrepreneur can get startup finance to try out a project in his/her mind. Hence, it is meant to create a startup nation.
“There are a lot of investors that are requesting for such engagements, who want to organize the youth and fund them. But we have no policy framework that allows for such practices,” Eyob added.