International Bamboo and Rattan Organization

International Bamboo and Rattan Organization

Improving sectoral financial limitations in Ethiopia


Improving sectoral financial limitations in Ethiopia

INBAR has conducted an awareness workshop on bamboo sector development for the Ethiopian local bankers and financial institutions in a bid to address sectoral financial limitations.

INBAR has recently held an awareness workshop to sensitise Ethiopian financial institutions about the investment potential of the bamboo sector and initiate discussion on potential business collaboration among investors, entrepreneurs, and monetary institutions. The workshop, which was held on 24 August 2021 in Addis Ababa, brought participants from  Ethiopian development and commercial banks, micro-financial institutions, line ministries and the private sector.

In his opening remarks, Mr. Kebede Yimam, the Deputy Commissioner of the Ethiopian Environment, Forest and Climate Change Commission (EEFCCC), noted that through the introduction of a comprehensive bamboo strategy and action plan, it is envisaged that by the end of 2030, Ethiopia will become the leading high-value bamboo producer and supplier in Africa. To achieve this vision, all stakeholders should work in unison to sustainably manage the country’s bamboo resources and promote bamboo industries by properly implementing the strategy. It is with this rationale, Mr. Kebede continued, that the government of Ethiopia, through EFCCC, is collaborating with INBAR to coordinate bamboo development initiatives in the country.

The workshop hosted 18 bankers and 3 small and microfinance institutions. The participants have underlined the workshop significance in terms of awakening the monetary institutions to consider the bamboo industry as a potential client. They went on expressing their readiness to work with the private sector, especially with the Small and Medium-sized Enterprises (SMEs), to enhance innovation, improved technology, and product quality in the development of the industry. Nevertheless, they have not hidden pointing out their doubts on the viability of local bamboo SME businesses. The representatives have expressed that issues such as market availability, infrastructure, skill and expertise, competitiveness, business plans, and collateral matters should first be dealt with before any meaningful financial collaboration happens between actors of the industry and the banks. Mr. Sentayehu Abebe, a senior loan officer at the Ethiopian Development Bank, pointed out this Bank is dedicated to availing loans for local industries, and hence, the EEFCCC and INBAR could work together with the bank to facilitate a special arrangement to finance the bamboo sector development.

In response to some of the points mentioned by the bankers, Mr. Bitew Shibabaw, Director of Forest Development in the EEFCCC, reaffirmed that the government is more committed than ever to support the sector and facilitate options that would strengthen the viability of the sector to get the attention of potential stakeholders. He stated that the EEFCCC, along with INBAR and other partners, is working on a range of sector strengthening initiatives, such as skill development, market linkage, supply chain, and infrastructure. As such, continued collaboration among the private sector, the financial institutions, and the government should clear out uncertainties, arrest pressing challenges and prospectively strengthen sectoral development.

Representatives of the private sector said that financial limitations remain the main problem to intensify bamboo investments in the country. Mr. Adane Berhe, the owner and manager of Adal Industrial PLC, highlighted that the government, in collaboration with bankers in the country, should not only facilitate access to finance but also think of launching a bamboo industrial park to attract more entrepreneurs and investors into the sector.

As a future action plan, participants agreed on the need for a dedicated national platform for bamboo sector development that would work on regular trade fairs, exhibitions, awareness, and promotion campaigns on the sector. They also came to a consensus on the need for rolling out risk-sharing collateral mechanisms, and skill development schemes for continued improvement of the sector performance and its competitiveness in the local and international market.

This workshop comes as a response to the ten-year strategy and action plan for bamboo sector development (2019 – 2030) of the Government of Ethiopia which has been adopted by the Forestry Climate Change Commission to increase and add value to the current bamboo development, sustainable management, and utilisation efforts. One of the major pillars of it is to develop pro-poor industry and SME value chains that would create income and employment for smallholders, women, and the youth.

INBAR as part of its work in East Africa aims to tap into investment opportunities of the Ethiopian bamboo sector to support the industry and SME value chains in the country. Through its Dutch-Sino East Africa Bamboo Development Programme II, it is currently working with different stakeholders to attract investors and entrepreneurs into the bamboo sector and enhance its business and trade environment in Ethiopia, Kenya, and Uganda.