Wednesday, June 19, 2024
BusinessUAE step-up to support private sector in Ethiopia

UAE step-up to support private sector in Ethiopia

Started off as a government agency established to support Small and Micro Enterprises (SME) and startups within the United Arab Emirates (UAE), the Khalifa Fund for Enterprise Development (KFED) is set to expand its support to SMEs, entrepreneurs and startups in Ethiopia allocating USD 100 million to be used as revolving fund by the program which the organization will implement in partnership with the Ministry of Technology and Innovation (MoTI), The Reporter has learnt.

Chairman of the Fund, Husain Jassim Al Nowais, signed the Memorandum of Understanding (MoU) on Monday with the ministry in the presence of Prime Minister Abiy Ahmed (PhD) at PM’s office as details of this project are yet to be worked out between the Fund and the Ministry. In an exclusive interview with The Reporter, Al Nowais noted that Khalifa Fund at this time is organization having presence in 20 different countries across Africa, Middle East and Europe.

In fact, the chairman says that Khalifa’s venturing out to the rest of the world is a phenomenon that happened since last years with political direction to support some of the major strategic ally countries to the UAE and help development endeavors in these nations. Established in 2007, Khalifa is currently running strong SME support programs in Africa, including Egypt, Senegal, Niger, Togo and Jordan.

“We want to support the hopes and dreams of SMEs and Startup companies across our strategic partner countries and in turn supports efforts to create jobs and reduce poverty,” Al Nowais said to The Reporter. “We also want to contribute to the grand vision of PM Abiy Ahmed (PhD) to have a developed economy and nation,” he said further.

That being the case, Khalifa Fund does have a support model that can be franchised to different countries and situations. This model is adoptable, according to Al Nowais, to different national priorities and challenges. The ministry is in fact the responsible body that will be working on setting the priorities for this project; and that adjusts it to be easily adoptable. With an overall allocation of USD 700 million, Khalifa already has 220,000 SME projects around the world and claims to have created 400,000 new job opportunities as a result.

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According to the chairman, although the priority is yet to be set by the partner ministry, it is likely that most of projects to be supported by the facility will have to do with the backbone of the nation’s economy: agriculture and innovation in relation to agriculture.

Apart from providing soft loans to selected SMEs and startups in Ethiopia, the program also incorporates investment on capacity building and training of trainers who would provide business development training to SMEs and entrepreneurs.

“The first step after signing the MoU is to agree on key performance indicators and sectoral focus areas. And the next is to customize the training program to the needs of the country; and in this case as well the counterpart ministry would have a greater role to play,” Al Nowais explained.

Furthermore, he noted that the role of the ministry in devising the right criteria to select SMEs and startups to benefit from this project.

All in all, the program is said to have four pillars which include women and youth empowerment, SME creation, entrepreneurship and poverty reduction. These are the parameters that would determine the success and failure of the project, according to the chairman, as it is implemented in the coming five years but with possibility of having a revolving fund characteristics ensure the sustainability.         

The USD 100 million support is a concessional loan facility which, according to the chairman, is extended on a very favorable terms to Ethiopia. This support package would place the nation on top of the list of countries benefiting from Khalifa Fund.                      

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