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Tanners do not get to meet government ministers very often. When they do, they often find the politicians to be arrogant or ignorant, quite often both. By comparison, meeting His Excellency Dr. Arkebe Oqubay was a delight for all those who attended his press conference or his talk at APLF Hong Kong. He spoke with clarity about the business situation in Ethiopia, clearly understanding the global leather industry, and stepped forward afterwards happy to meet and talk to any interested individuals who wanted more information.
Getting him to the fair was a big achievement for the organisers of APLF Leather. Ethiopia is vital in the development of the leather industry in Africa. Progress in all things, leather stalled some decades ago in sub-Saharan Africa but, for the last few years, the Ethiopian leather industry has been on the move with new tanneries and footwear plants.
Dr. Arkebe Oqubay is a Minister and Special Advisor to the Prime Minister of Ethiopia having first become well known for his transformative period as mayor of Addis Ababa during 2003 – 2005. For leather people with experience of travelling to Ethiopia over the last three decades, it had been depressing to see the infrastructure crumbling away at the very moment China started to accelerate. So, the early years of the new millennium were vital in creating the turnaround that has given Ethiopia 15 years of GDP growth of 11% per annum, and Addis was always going to be the engine.
From the presentation it was clear that Ethiopia has put in place, or is close to completing, many elements that worry industrialists such as power, transport and finance. He indicated that he wants the industry to be a “sustainable” one and agreed that an element of retro-fit was required to get this on path. This is a significant task as often in emerging markets the concept of the polluter paying is not accepted. Hopefully, the investors from India and China who have built new tanneries in Ethiopia have not done so in order to escape the increasing environmental pressures at home.
There are good reasons to invest in Ethiopia, as was well laid out. The new railway to the coast, and an allied road structure will make exporting affordable and reliable. The light railway already working in the capital and many thousands of kilometers across the country. The Ethiopian airline is the best in Africa. Power is amongst the cheapest and greenest in the world. With 100 million people there is a good supply of labour, all with basic education, and there is a solid structure of technical education and training now in place.
That same 100 million people offer another benefit for the investor and huge future market that will quickly spread across Africa. The concept of making in a low-cost environment to feed the hungry mouths of U.S. and EU consumers is declining in relevance. Think instead of where you can fly to in three or four hours from Addis in terms of future potential.
One unspoken issue of importance is politics. Ethiopia has been stable since the fall of President Mengistu in the early 1990s, a process that Arkebe Oqubay was very much involved in. In the last three years that stability has looked a little fragile and Ethiopia is currently looking to find a new Prime Minister from amongst the complex factions that form the ruling coalition.
Hopefully, they can find someone like Dr. Oqubay who is so straightforward and clear about the process to maintain progress, creating new jobs, and making sure that benefits filter into all regions of society. Leather and the leather using industries have a very important part to play in making Ethiopia truly sustainable.
Dr Mike Redwood
March 21, 2018
Follow Dr Mike Redwood on twitter: @michaelredwood
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