Ethiopia—Enterprise Partners/Private Enterprise Programme Ethiopia (PEPE)

Enterprise Partners was the major component of the Foreign, Commonwealth & Development Office (FCDO)’s Private Enterprise Programme Ethiopia (PEPE). It was launched to facilitate market systems development to create jobs and raise incomes of Ethiopians, especially women, living in poverty. The primary focus was to stimulate agro-industrial growth and access to finance, with the objective to create 45,000 jobs, increase the income of 65,000 people, and support 150,000 people to access financial services. Enterprise Partners had to achieve these results in a specific context: where there were very few market systems development programmes and at a time when the Government of Ethiopia was only just beginning to embrace the private sector as a development partner that could support the pursuit of the country’s industry-focused, export-led growth goals.

DAI implemented this work with consortium partners First Consult (Ethiopia), Itad (United Kingdom), Enclude (Netherlands), and BCaD. We utilized the market systems approach to achieve the impact. Enterprise Partners identified key constraints and developed socially and environmentally responsible strategies, working with industry actors to introduce new business models.

Enterprise Partners worked through two major pillars:

• Agro-Industry: Strengthening market systems in three priority sectors of the Government of Ethiopia—cotton, textile, and apparel; leather and livestock; and fruits and vegetables.
• Access to Finance: Strengthening financial systems for increased financial inclusion of the poor into formal financial systems and enabling investments for small, medium, and large enterprises.

Sample Activities

• Garments: Improve labour market systems and cotton production to create a sustainable industry with strong backward linkages. Support the Government of Ethiopia’s flagship Hawassa Industrial Park, which will create 60,000 jobs in the apparel sector.
• Leather: Increase finishing capacity of tanneries and produce high-value leather products to increase exports.
• Horticulture: Promote production of high-value crops for export and support the processing industry.
• Financial Inclusion: Promote digital banking so poor people living in rural Ethiopia have increased access to formal financial services such as savings and loans.
• SME Finance: Provide technical assistance and finance (via a World Bank credit line) to banks, microfinance institutions, leasing companies, and the Development Bank of Ethiopia to support small and medium-sized enterprises that are women-owned or contributing to industrial growth.
• Investments: Promote foreign direct investment and private equity capital investment, especially in priority agro-industrial sectors.

Select Results

• Launched 50 interventions to address critical constraints across the agro-industrial and finance sectors.
• Introduced 25 innovations through 158 public and private organizations.
• Supported the Development Bank of Ethiopia and 12 microfinance institutions with technical assistance that contributed to £50 million in loan disbursements and enabled another £204 million credit line by World Bank (to be disbursed by 2020).
• Generated £43 million of additional investment into the economy.
• Created more than 30,000 financial accounts.
• Watch this video to learn more about how the project worked.