It is fact that Ethiopia’s development policies, strategies and programs reflect the country’s development needs and priorities. To this end, creating job for the needy people, youth and women in particular, is one of the top development priorities, but job creation is not well understood and there is a potential for a diverse interpretation and may lead to bewildering of views and perspectives.
The application of perspective thinking to rural job opportunity creation (RJOC) is critical to rural economic transformation in Ethiopia. By understanding complete RJOC concepts and operational frameworks, policy makers and practitioners can account for more viable and sustainable rural job development and better influence rural economic development. Understanding job creation in terms of broader perspectives can help policy makers and practitioners set vision and objectives of RJOC and mainstream into the sector development.
The influence of the growth of youth-owned Micro and Small Enterprises (MSEs) in Ethiopia using a sample survey of 909 operators were selected through a multi-stage random sampling technique. The result of the cross-tabulated descriptive statistics showed that the personal attributes, firm characteristics, inter-firm cooperation and policy predictability affected the growth of the MSE operators. Growth rate was also influenced by the diverse and heterogeneous character of the youth-owned MSEs. Unlike many other studies, the finding of this study revealed that the average growth rates of micro enterprises were much lower than the small enterprises. Female-owned firms registered relatively lower growth rate compared to their male counterpart.
The results obtained from the regression indicated that among the personal attributes of youth MSE owners: education, sole ownership form of business organization, small enterprise category, experience in similar business, and gender (male MSE owners) were significant variables which positively influenced the growth of the youth operators. Out of the firm-level attributes, access to training before starting business, social networking and access to loan were significant variables which negatively affected growth rate.
On the other hand, access to product markets, future plan of the enterprises, saving culture, size of start-up capital and current capital were found as significant variables influencing the growth of youth-owned MSEs. The predictability of policies and inter-firm cooperation were also found to be significant variables affecting growth and expansion of youth-owned MSEs.
Since the growth rate of micro enterprises and women-owned enterprises were lower, the study suggests to revisiting the current support program by crafting tailored interventions. Moreover, due focus should be given to improve social networking and building the trust and confidence of the operators on government policies and strategies as inter-firm cooperation and policy predictability affect the growth of youth-owned MSEs,.
Ethiopia’s economy is rapidly transforming. Based on a large-scale household survey in high potential agricultural areas, we find that total off-farm income makes up 18 percent of the total rural income. Wage income, in the agricultural and non-agricultural sector, accounts for 10 percent of total household income and is estimated to be as important as livestock income in these areas. While wage increase is good news for the poor, it also induces adjustments in agricultural production practices, including increased adoption of labor-substituting technologies such as herbicides and mechanization, and it relaxes liquidity constraints in the off-season leading to consequent higher productivity.
Developing countries experiences demographic transitions where infant mortality declines which are not matched by a decline in fertility at the early stages of development (e.g., improved health service provision). Such a transition changes the composition of population to be dominated by children and the youth. Ethiopia like many other countries is going through the same process of declining mortality not matched by declining fertility. This has led to the expansion of the youth in total population.
Ethiopia has also experienced a sustained period of economic growth averaging over 10 percent over the last decade. During this period, the overarching development agenda was the Agriculture Development Led Industrialization (ADLI) which primarily targeted improvement in agricultural productivity in agro-ecologic zones with reliable rain and focusing on non-farm activity in moisture stressed areas. Accordingly, value added from agriculture has improved both on the account of increase in yield in an output per hectare of land and expansion in cultivated areas. However, dwindling agricultural land in traditional agricultural areas is becoming limiting factor for sustained growth.
Recent studies indicate that lack of available agricultural land in Ethiopia is becoming a limiting factor for employment choices in rural areas and majority of the rural youth is looking outside of Agriculture for employment. Moreover, the second Growth and Transformation Plan (GTP-II) puts structural transformation as the overarching objective which will be pushed for aggressively. Therefore, it is important to document and examine the topic of rural youth employment choices at this particular time where the economic agenda is focusing on structural transformation as the working age population is expanding.
Non-farm employment in rural area is becoming an attractive solution to improve incomes and absorb job opportunity problems of the rural youth in many low income countries.
Global evidence and business cases show positive value additions of gender diversity and women empowerment. As Ethiopia is moving towards industrial transformation in the near future, it is very important to understand these dynamics around role of private sector as well as government in developing a vibrant labor market. Enterprise partners approach is to pilot business models that are responsive to the needs and demands of factories but at the same time ensure that women have a sustainable opportunity within this industrial transformation.
Young people who aspire for white-collar jobs, find it hard and demotivating to get employed in the private sector which offers mainly blue-collar jobs. It also finds that there is a weak link between the worlds of learning and working. To provide better employment for the youth, the private sector needs incentives, regulation and monitoring of its employment processes. But the limited capacity of the private sector to absorb the huge number of school-leaving young people should be recognized. And the wrong perception of private employers towards the youth and vice versa needs also be readjustment.
MSE development in Ethiopia is taken as a key development strategy and benefits from a proactive policy which provides different supports. The supports provided include access to finance, training, and market linkage, working and selling premise, infrastructural support and technology assistance. These supports are expected to alleviate the constraints of MSEs so that they perform better in their operation.
Similarly, the government should emphasize market expansion and inter-firm cooperation to bring about growth and competitiveness among enterprises. In addition, critical inputs such as finance, training, working premise and sub-contracting need to be enhanced in order to properly address the needs of the youth-owned MSEs.
The Ministry of Agriculture and Natural Resources has organized a national learning workshop on maximizing ways to create more jobs in the rural areas over the weekend. The Ministry has disclosed that Ethiopia has planned to create jobs for over 4.7 million citizens living in rural areas of the country and close to 1.5 million citizens will get these opportunities on agriculture and non-agriculture sectors on the current budget year. And much focus is to be given to youths and women so as to enable them highly benefit economically through agriculture and non-agriculture potentials.
Minister to the Ministry of Agriculture and Natural Resources Tefera Deribew, on the occasion, said that Ethiopia has agriculture and rural development policy and programs which give prime attention to benefiting the youth and women economically both in agricultural and non-agricultural development endeavors and much focus is given in the second growth and transformation plans period on that regard.
The country can benefit a lot through showing citizens the way to benefiting in agricultural and other endeavors through training and organizing them in work areas that they are much interested as well as facilitating credit services. The targeted groups of this initiative are the numerous uneducated citizens, school drop outs and unemployed citizens that have relatively better educational background and capacity than many farmers among others.
According to the information from the Ministry, strong government structures will be established in all regions from the level of kebeles in a closer collaboration and support and much focus will also be given to those who shall be the exact beneficiaries of the opportunities.
Dr. Melaku Gebremichael, Food Security Adviser in Global Green Growth Institute (GGGI), said that Ethiopia’s policies, strategies and programs reflect the country’s development needs and priorities, “creating job for the needy people, youth and women in particular is one of the top development priorities and the application of a rural job opportunity is critical to rural economic transformation in Ethiopia”
He also suggested that integration of the issue with development plans and strategies is crucial for its effective realization and every actor associated with rural transformation needs to be part of the effort.
With some 936, 520 jobs created on the last Ethiopian Budget year, more than 1.5 Million jobs are planned to be created on the current budget year from the rural job creation program.
To sum up, agriculture and rural development has ample potential for creating opportunities for about 12 million additional citizens from the different endeavors of the sectors. The government, the private sector, stakeholders and partners should unleash their utmost best to benefit citizens and support the country’s economy in the years to come.
http://www.ethpress.gov.et/herald/