17 June 2012

Ethiopia: Multinationals Not As Good As Local Solutions to Market

Photo: IRIN
Harare city centre.


Dear editors,

There is a rumor around the corners of Addis Abeba that the government is in the process of opening the domestic market to multinational giants. I believe the decision taken by the government is to unwind the oligopolistic nature of the domestic market.

But, it is worthwhile to discuss the issue with the domestic business community first, so that they can play their part to improve the poor market system, which is controlled by a few wholesalers and retailers that results in the current gap, I would argue.

The government may consider the multinational companies as a temporary solution for this market gap. But, in the long run, they embody numerous adverse effects, as observed in many Latin American countries and others parts of the world. They will challenge the authority of the government and erode the market share of domestic businesses.

In addition to discussing the issue with local businesses, the government ought to strengthen the existing consumers' associations across the nation. It can also set up large corporations (state-owned), which need to focus on the distribution of basic commodities.

No doubt that homegrown solutions help to achieve a sustainable market system, more than multinational corporations do.

Masiresha Wondimu

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