After living many years in the U.S., Yohannes Assefa, executive director of Ethiopian Diaspora Business Forum, a US-based business-and investment-oriented organization, was back in Ethiopia in 2008 to set up the Ethiopian Commodity Exchange (ECX) together with a group of nine experts from the diaspora living in the U.S. Until he went back to the U.S. in 2012, Yohannes also worked as chief of the party for Ethiopia’s WTO accession project at the Ministry of Trade and funded by the USAID. He was involved indirectly with the AGOA Plus project of that time where USD 18 million was channeled to diaspora investors as credit guarantee for loans from local banks.
He is a business lawyer by training haveing worked with some Wall Street firms in the U.S. Currently, Yohannes is director for the international financial consulting firm called Stalwart Management Consultancy firm, based in Dubai and operates a small office in Addis Ababa and in some ten overseas countries in Africa in addition to the Middle East and Asia. Apart from that, Yohannes is the executive director of the Ethiopian Diaspora Business Forum, with its headquarters in the US, Virginia. He also teaches at George Washington University as an adjunct (Assistant/Associate) professor of international business.
Last week, Yohannes came back to Addis Ababa for the 10th annual meeting of the business forum when Birhanu Fikade of The Reporter caught up with him for a brief interview where the director talked about a special award ceremony in connection with the forum aimed at recognizing achieving Ethiopian diaspora entrepreneurs running businesses in Ethiopia. Excerpts:
The Reporter: Basically what are the things you do in the Ethiopian Diaspora Business Forum?
Yohannes Assefa: In our effort to promote entrepreneurship, we engage diaspora business communities both in the US and in Ethiopia. We work to serve as a bridge between the two nations especially around investments. We also work on policy advocacy and on programs to promote business here in Ethiopia. The idea is to share knowledge, experience and create networking opportunities; we connect different levels of investors as we have the mentorship program where the more experienced investors work with the newcomers. In Ethiopia there are lots of steep learning curves and people need lots of things when preparing to invest in Ethiopia. We have done job fairs for employers who are looking to hire diaspora professionals. We have had eight employers from Ethiopia, participating in the job fair. We have done private equity investment pitches. We have invited four private equity investment firms that have invested in Africa and brought in five early- growth diaspora-owned investment companies doing well in Ethiopia and the U.S. We have also held a business plan concept competition sponsored by Ethiopian and the USAID. Over the past ten years, we have engaged in various activities to promote entrepreneurship in the community and we were able to reach out some 10 thousand people across the board.
You mean 10 thousand Diasporas alone?
Yes, but members of the diaspora, Americans, non-Americans and people who are interested in businesses and investment relationships between the U.S. and Ethiopia are also part of it. Most of them have been promoting Ethiopian products and services in the U.S. That is one aspect of the AGOA; we support one another’s country. The annual conference or the forum is organized in the U.S. (Washington DC) mostly and members of the Diaspora all over the world including those from Ethiopia fly to be part of the event. From the U.S., people come from as far as California, Colorado and the like. This is the main event of the year. Usually, focuses around sectors and key speakers could be investors either from the U.S. or from Ethiopia. Speakers include US Government officials who promote and provide support for American investments overseas like the Overseas Private Investment Cooperation (OPIC), the Export and Import Bank of America (EXIM bank), the state department, the US congress and various government institutions have roles in the process. We also invite Diaspora investors from Ethiopia as speakers and participants. This year for example, six out of the eight speakers are from Ethiopia. They flew in specifically to participate in our conference.
The Diaspora business forum was exclusively held in the U.S. for the past ten years. But why was it not held somewhere in Europe or Ethiopia or elsewhere in the world?
This year is a special year for us. It’s a big milestone for the organization. It’s special because of the connections we have been able to create. But this year, we have decided to hold the awards ceremony in Ethiopia. Actually this is the second part of the conference. The main conference was held in Washington on August 1 at the George Washington University precisely because the big part of it is that we have members who cannot travel and participate here because of family or job or other related issues. We split the event into two and the award ceremony (dinner), which is one part of this event, is to be held here as part of the week-long Diaspora celebration day. We will award two pioneering Ethiopian diaspora business persons. We also have “diaspora business champion”, a new category launched last year. Then we will recognize five individuals for their extraordinary contributions for the forum in this decade. For the why not in Europe or elsewhere, I can say that we have plans; perhaps it was because our base and home is in the U.S. We have very limited resources; even coming to Ethiopia was a challenge and especially holding events in two continents at the same time requires stretching out resources and abilities. But we are happy that we are at home for our case and be part of the weeklong celebration of diaspora activities organized by the ministry of foreign affairs.
So hosting the award ceremony here is just to do it parallel to the weeklong celebration of Diaspora Week?
It’s both. We made the decision last year at the end of the ninth-year conference. We have announced that we are to come to Ethiopia for our tenth year because it’s a special year. While preparing, we were invited by the ministry to hold the event alongside the weeklong activities here. Hence, we have rescheduled our program.
What can you say about this year’s awardees? What’s special about them?
The award is called Pioneer Ethiopian Diaspora Business Person of the Year. The awardees have to be pioneers. We have our own definition of pioneering persons. Hence, they need to meet certain standards. The process of the award starts from the nomination stages where from the public anyone can submit nominees as we have wide circulation for nominations to be made. There is a committee which evaluates the nominees based on certain set of criteria for their background and achievements. For this year, we have two pioneers whom we have recognized as having rendered a special and unique contribution to Ethiopia and the business community in general. We have “Business Champion” category which we have initiated last year. The first award was given to Addis Alemayehu, managing director of 251 Communications, a Public Relations firm here in Ethiopia. He was awarded for his contribution and promoting diaspora business and investment in Ethiopia for the past ten years. This year we have another person. He is a diplomat and is to be recognized for his contributions of promoting, supporting and assisting of diaspora investments in Ethiopia for the past 15 years. We also have other five individuals who will be receiving awards for their contributions for the diaspora business. Although we have the conference going for the last ten years, the award ceremony was actually started some five years ago. You know, our community is very quick at blaming people when they make mistakes but we lack the culture of recognizing and appreciating people who do things right. We wanted to promote this culture and it has a big positive impact.
What are they to receive as an award this year?
There is a statuette we award annually in different shapes and size. Hence, awardees are receiving California-made statuesttes as usual.
The notation of diaspora here is mostly related to remittances and to some extent technical expertise that the diaspora community is most known to capitalize on. What is it that defines the Ethiopian diaspora more these days? What can you tell us about the investments from the diaspora community?
Our biggest goal as an organization is to make sure people understand what the diaspora is doing in the U.S. Unfortunately we get too much attention for the negative parts. Like any other communities, we have people doing well and some don’t. Most coverage is directed towards people who are not doing so well. Diaspora investment here is estimated to be over three billion dollars. If the diaspora were considered as a country, it could have been the second or third largest foreign direct investor in Ethiopia. This is huge. The remittance you have mentioned as of the World Bank estimates is more than USD three billion, which is more than the export of Ethiopia collectively as a country. There is little effort to promote remittances. Beyond that, the actual diaspora businesses and investments has employed thousands of Ethiopians, and have introduced technology and services which never have been introduced before. They have been coming here since the current government took power and where the investment climate was challenging. When they encounter problems, they don’t run, they stick around because they are at home. But there are some who haven’t done well. Some even have gone back.
What can you make of the political divide in the diaspora which, these days, seems to be outweighing the business and investment engagements, and how did that affect the organization so far?
Unfortunately, there is a lot of talk on politics. We are a non-political association. We don’t get involved with politics either way. We care about Ethiopia and about the business and investment relationships with the U.S. We want to be a positive influencers and contributors to Ethiopia’s development. Unfortunately, some people take this as a political action or as support for the government. There are some people in the diaspora who don’t understand our work; who oppose to what we do. But we disagree with them. Here in Ethiopia, there also people who don’t understand our work. For some people, the entire diaspora community is part of the opposition and we disagree with them as well. People being silent don’t mean they don’t love their country. There is a difference between politics and country. But the negative perception gets in a way both in the U.S. and here. What we do as part of our work is to change that perception.
So will it be easy to tell people to come and investment guarantying them that there is an enabling investment climate?
We are very honest with our members. Every year we organize conferences and bring businesses to Ethiopia. We discuss everything about the changes and opportunities. We also discuss the challenges in detail. We don’t sugar-quote everything. I want to be the first to say it’s because we challenge that we have an opportunity in Ethiopia. I’m not saying challenges are good. But because of the challenges we have opportunities. We understand the language and culture and we are better to compete with international investors coming with big capital and systems. When this country is fully developed and there is no challenge, I guarantee you we will have a difficult time finding our place. There is a room for a lot of improvements and there is a lot of challenges especially for diaspora investors. We are in between. We are not treated as local or foreign investors. In fact, what we see emerging is that there are some negative measures by regional governments or some governmental bodies that don’t understand the nature of diaspora investments. The current existing laws also create some difficulties. For example, an agency issued draft regulation prohibiting diaspora investment in certain sectors which have already been allowed by law. Hence, we need to work with these institutions to educate them. But beyond that, the truth of the matter is that Ethiopia stands better from some emerging economies in the annual doing business rankings. The conditions are not as bad as the people perceive them to be. It’s been ranked ahead of India, Russia and that is commendable. But there are huge loopholes to be sealed.
In his recent interview with The Reporter, Admassu Tadesse, PTA’s bank president and CEO, said that the bank is looking at launching an Ethiopian diaspora bond as one of the way of reaching the untapped resources in the diaspora. How do you see that? Could it work?
By the way, as I have mentioned before, my day-job is in a Wall Street law firm. As a lawyer, I started my job as a bond lawyer. I worked on various types of bonds including as an advisor to the Ethiopian government GERD bond. Diaspora bond is not new to this process. PTA is probably the fourth organization which is trying to do it. USAID is the vanguard. They have tried to issue diaspora bond in 2007 for Ethiopia, Tanzania and Ghana. Unfortunately, it didn’t work well. It’s complicated but it doesn’t mean it won’t work. I like Admassu; he is one of the people I personally admire. If anybody can do it, it’s him. With PTA as a regional bank and Ethiopia as a member, I think he has a better chance to succeed than others in the past.
Why haven’t the diaspora bond worked before?
I don’t know the specific structure. But, in general, a bond is a security instrument. It’s essentially issued so that investors will buy pieces of that bond. If it’s one million dollar bond, it will be sold off as five, ten, or 100 thousand dollars pieces. The investors buy those bonds and the money is collected collectively so that will be invested in some money-generating activities. The plan in the USAID, as I was involved partly in advising them in Washington, was to lend the money to private banks to inject additional liquidity. Doing so, the private banks would lend out to the private sector and when they make money they pay off to bond with interest rates. The bond holders, depending on the structure of the bond, will be paid back for their investments at maturity. I teach at George Washington University as an adjunct professor of international business. My colleague Liza Weddle (PhD) is global expert in diaspora entrepreneurship. She has been working with the USIAD in India, Bangladesh, and Pakistanon diaspora bond and now on a new project in Serra Leon as well. We have done our best to encourage USAID here in Ethiopia to look at this upcoming bond. I think Admassu’s work is commendable and likely to succeed. It’s because there is Admassu and there is PTA that the Ethiopian government is bound to succeed: