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LDCs remain unfriendly to entrepreneurs, UNCTAD

The United Nations Conference on Trade and Development (UNCTAD) has found in its annual Least Developed Countries (LDCs) report that entrepreneurs are faced with numerous constraints and struggle to stay in business across the LDCs where Ethiopia is one of the least performers.

Launching the 2018 edition of LDCs report: “Entrepreneurship for Structural Transformation— Beyond Business as Usual,” highlights 270 million workers in LDCs who were self-employed in 2017 are considered as entrepreneurs.

According to Joy Kategekwa (PhD), head of UNCTAD regional office for Africa, 70 percent of entrepreneurs in LDCs where majority are in Africa, represent self-employed quasi-entrepreneurs against the 14 percent in the developed world. Joy said that 63 percent of early entrepreneurs and 57 percent of established businesses are engaged in consumer-oriented services found to be imitating existing businesses.

Since many lack the innovation and creativity together with the financial backings, survival rates of such enterprises are very low resulting in some 50 percent of the firms forced to leave markets within the first five years of entrant.

Semehal Guesh, an architect by training is a founder of Kabana, a medium firm that manufactures leather goods. Kababa crafts handmade leather bags, wallets, folders, and customary products for customers in Ethiopia, the US, and Sweden. Semehal is the winner of this year’s “young women entrepreneur” during the Global Entrepreneurship Week (GEK) held last week in Addis Ababa.

However, she said that she had to endure the most challenging circumstances. While sharing her experiences with fellow young entrepreneurs, Semehal gave accounts of her ordeals at times being forced to close down business because she could not get an essential support. Lack of access to finance, cost of starting a business, taxes and the likes are some of the critical constraints Semehal finds dominant in the sphere of entrepreneurship in Ethiopia.

Likewise, UNTCAD finds that three quarters of firms in LDCs are affected by electric outages which force many to additional costs. Lack of access to finance, lack of internet, gender gap and prohibition of women from certain jobs and a couple of hardships, makes the landscape foggy for enterprises and business-minded persons in Africa and beyond.

In a related news, Mukhisa Kituyi (PhD), Secretary General of UNCTAD together with the likes of World Bank Group and the International Trade Center (ITC) within the World Trade Organization (WTO) are set to hold the first “African Forum for National Trade Facilitation Committees,” starting from the coming Tuesday in Addis Ababa.

The presser UNCTAD sent to The Reporter mentioned that the landmark event comes as African countries “seek to make interregional and international trade cheaper, easier and faster, and after.”

It is to be recalled that the government of Ethiopia has made it public to take the accession process to join WTO and be finalized by the end of 2021. The accession process took 15 years and still remains at the early stages of goods offer.