From Vision to Impact: A Mentor’s Perspective on Ethiopia’s Draft Startup Policy

Jibril Mohamed Ahmed, Award-Winning Startup Mentor of the Year 2022 at Johannesburg, South Africa

Ethiopia is a country bursting with potential. Every time I meet an aspiring entrepreneur, I’m reminded of the creativity and determination that flows through our communities. But as a certified mentor by the I.L.M U.K and Jury Panel for BINA Bootcamps, and as the recipient of the 'Startup Mentor of the Year' award in South Africa at the Africa Startup and Ecosystem Builders Summit in 2022, I’ve also seen how structural barriers can stifle even the most brilliant ideas.

The Startup Ecosystem Development Policy Draft, now open for public consultation, is an important step in addressing these challenges. This policy has the potential to lay the foundation for a thriving entrepreneurial ecosystem in Ethiopia. However, like any good startup idea, it needs refining to address the real challenges faced by our founders.

1. Simplify Processes for Founders
Let me paint a picture for you. A young entrepreneur in Addis Ababa has developed an app to help farmers sell their produce directly to consumers. It’s a fantastic idea, but she spends months navigating complicated business registration processes. Each day wasted is a lost opportunity to get her app into the hands of farmers who need it.

This isn’t just frustrating; it’s demoralizing. Many founders end up giving up before they even begin.

What can we do? We need a one-stop-shop model for startup registration, inspired by Rwanda’s streamlined system. Imagine if founders could register their businesses, apply for permits, and access essential resources on one platform. That’s the kind of efficiency Ethiopian entrepreneurs need to thrive.

And let’s not forget clarity. Right now, the term “startup” means different things to different people. The policy needs to define startups in a way that recognizes their unique challenges and potential.

2. Bridge the Funding Gap
Picture this: A group of friends in Bahir Dar has developed a low-cost irrigation system that could transform the lives of smallholder farmers. They’ve poured their savings into the prototype and are ready to scale—but they can’t find funding. Banks call them too risky, and venture capital seems like a distant dream.

This story repeats itself across Ethiopia. Without financial support, incredible ideas are left on the shelf.

The draft policy’s Startup Grant Program and National Credit Guarantee Scheme (NCGS) are promising solutions. But they must be designed with the realities of Ethiopian startups in mind:

• Simple Application Processes: No founder should need a legal degree to apply for a grant.
• Fast Disbursement: Startups can’t afford to wait months for funding.
• Support Beyond Money: Pairing grants with mentorship can help founders make the most of their resources.

India’s SIDBI initiative shows how combining funding with milestone-based support can drive success. Ethiopia can adopt a similar approach to ensure that money reaches startups with real potential.

3. Mentorship: The Key to Unlocking Growth

Here’s a story that sticks with me. A young health-tech founder in Hawassa had created a device to monitor vital signs in remote clinics. The product was innovative, but she struggled to pitch it to investors. Without guidance, her idea risked fading away.

Mentorship is the bridge between great ideas and successful businesses. A National Mentorship Network could connect Ethiopian founders with experienced professionals, both locally and from the diaspora. These mentors could guide them in refining their business models, preparing investor pitches, and navigating challenges.

I’ve seen this work firsthand in South Africa’s Innovation Hub, where structured mentorship has turned early-stage ideas into thriving businesses. Ethiopia can achieve the same—if we invest in mentorship.

4. Attract Global Talent and Partnerships

Ethiopia’s talent pool is remarkable, but imagine what we could achieve by connecting it with global expertise. Picture a Silicon Valley AI startup partnering with an Ethiopian agritech company to develop solutions for drought-resistant farming. The possibilities are endless.

But right now, high entry barriers, like the $200,000 minimum capital requirement for foreign startups, make these collaborations rare.

The policy should adopt elements of Singapore’s Tech Pass, reducing barriers and offering incentives to attract global startups and investors. At the same time, fostering partnerships between local and foreign companies can boost knowledge sharing and innovation.

5. Empower Startups with Digital Tools
Let’s talk about access. A founder in Dire Dawa has a great idea for a logistics platform but struggles to find basic resources like legal templates or funding opportunities. Traveling to Addis Ababa for every small need is simply not practical.

This is where the National Digital Startup Portal can shine. More than just a registration tool, it could be a lifeline for founders across Ethiopia. Imagine logging into a platform where you can:

• Book a mentoring session with an expert.
• Download templates for contracts or business plans.
• Apply for grants and funding opportunities.

Nigeria’s Startup Digital Hub is proof that such a platform can work. Let’s ensure Ethiopia’s portal meets the needs of our entrepreneurs, no matter where they’re based.

6. Track What Matters
Policies without measurable outcomes are like startups without KPIs. How do we know if we’re making progress?

The draft policy should include clear Key Performance Indicators (KPIs), such as:

• The number of startups registered annually.
• Jobs created by startups.
• The volume of investment attracted.

Chile’s Startup Program includes mid-term reviews to adapt to changing needs. Ethiopia can do the same, ensuring that this policy evolves alongside the ecosystem it supports.

A Call to Action
Ethiopia is brimming with potential. From tech hubs in Addis to agripreneurs in Oromia, the entrepreneurial energy is undeniable. But potential alone isn’t enough—it needs a system that nurtures it.

The Startup Ecosystem Development Policy Draft is a step in the right direction, but it will only succeed if it addresses the real challenges faced by our founders. This is where you come in.

Whether you’re a founder, investor, or mentor, your voice matters. Share your feedback with the government by emailing [email protected]. Together, we can shape a policy that doesn’t just inspire but empowers.

Ethiopia’s "Eureka moments" deserve to grow into global unicorns. Let’s make that vision a reality.