Human Dynamics, as a consortium leader, has been engaged to ensure the smooth delivery of the Transformation Triggering Facility (TTF) instrument of the Ethiopian government. The Human Dynamics technical assistance team are in Addis Ababa working to ensure the TTF delivers on its potential of unlocking another decade of growth.
Since May 1991, Ethiopia began a journey of remarkable social and economic transformation. In 2011, following a decade of close to 10% annual growth, The Economist identified Ethiopia as one of the world’s 10 fastest growing economies.
This is clearly witnessed in Ethiopia’s flower industry, a sector that bloomed with a little government nurture: cutting red tape, facilitating land parceling and providing targeted subsidies. Thus, the sector grew from a single firm in 2000 to 100+ firms today, earning USD 200 million/year from exports and employing an estimated 50 000 people, 80% of whom women. According to the Kenyan Flower Council, in 5 years Ethiopia achieved half of what Kenya achieved in the last 30 years.
To replicate growth in its flower industry, the Ethiopian Government have developed an innovative tool to leverage opportunities, close gaps in value chains and grasp nascent opportunities — namely, the Transformation Triggering Facility (TTF).
TTF aims to support the competitiveness of companies in priority sectors. It will distribute grants on a demand-driven basis specifically targeted at supporting key partnerships. The TTF will seek to forge commercially needed linkages the absence of which impedes pent up demand and industry development in Ethiopia, as well as to fix breakdowns and gaps that prevent vertical integration and value adding in Ethiopia. TTF will provide targeted grants to develop forward market and backward supplier linkages in the areas, which can be exemplary and establish a model for others to follow. It is hoped that these grants will be able to break open new markets.
To facilitate growth in the private sector, TTF has four main aims: boosting SMEs, enhancing business skills, hubs development, and broad capacity building and fine-tuning.
Our team are providing capacity development and technical and administrative support to TTF across four strategic industries: agri-processing, pharmaceuticals, leather and leather products (including chemicals as part of the leather value chain), and textiles and clothing. Innovation Centre and Regional Competitiveness Hub will further boost the emergence and exchange of best practices, knowledge and resources in innovation and economic growth.
According to World Bank data, only 2% of Ethiopia's population have received tertiary education. In 2008, it was estimated that Ethiopia had produced less than 100 PhDs in the last 50 years. The Ethiopian Government has identified this lack of formal higher education attainment as a structural weakness that the TTF could assist in fixing.
Currently not a single course in management studies is offered in Ethiopian universities, while a lack of trained business managers is a serious impediment to growth. This problem is not unique to Ethiopia: roughly 90 business schools offer MBAs in Africa (roughly 1 per million people), compared to 1500+ in India.
As part of the TTF, Human Dynamics is working with the Ethiopian government to develop an EU- Ethiopia business school to provide specialist world-class management training. The graduates of this Business School will lay the foundations for a network of tertiary qualified business people in Ethiopia who will have a multiplier effect on the Ethiopian economy.
As part of TTF, we are also working to assist in the delivery of an Aviation Hub. According to a recent World Bank report, Ethiopia earned as much from services as it did from goods export. Ethiopian Airlines is a strong brand in Africa, with a 50-year history and an annual turnover of USD 2 billion. The TTF is building on Ethiopa’s comparative advantage in this service industry and has begun the process of making Ethiopia a hub for African aviation.
Ethiopia has also started to establish itself as a medical hub, with a dedicated medical zone established to encourage the development of specialist medicine facilities. Patients Across Borders, an international medicine journal, believes that the global medical tourism market is worth USD 38.5–55 billion, with approximately 1 million cross-border patients worldwide spending an average of USD 3500–5000 per visit. As with Aviation, secondary market benefits are being enjoyed by the broader community. Ethiopia is now tapping into this market and — through the TTF — developing a world-class medical hub.
The implementation of broad structural changes to the economy and education sector, as well as the disruptive effect of rapid commercial and industrial growth, demand greater capacity inside the Ethiopian Government. Therefore, throughout the TTF process, and building on Human Dynamics' 20+ years of experience in building capacity, our team are working to deepen the capacity and widen the skill-set of those in the public service so they may respond appropriately to the changing circumstances.