Given its potential to provide jobs and services, how to open up the local non-farm business sector? Here are five directions. Give credit facilities to the local shops so as to expand the stock they keep and the services they provide. Rural shops can play a large role in moving useful products to rural areas – from sanitary pads, basic medicines to better seeds, tools and solar lamps. Yet there are very few retail outlets that have a stock of such useful products and hence the potential market penetration of products that could mean a lot for rural customers is almost not there.
Help the retail shops to set up a system of selling in instalments to rural customers. There are many products that are immensely useful and have high return on investment but there is always a liquidity crisis. If local retail shops would sell in instalments to rural customers this could be overcome. Yet most shops have only a few people they trust. Setting up a system of simple screening and guarantees would unblock the market.
Further strengthen the retail shops by making sure all product delivery is routed through them. Now under all manner of public subsidy program parallel delivery systems are set-up whereby product and tools are directly provided to rural customers. It would make sense to physically route such free or subsidized items through the local shops and make them stronger and better-stocked.
Complement the efforts by training in more diversified economic activities – food processing, decorations, local craft – learning young people in particular basic business practices and technical skills and providing them with the vision, hope and aspiration.
And also: ensuring more transport on the roads. The Ethiopian feeder roads are now largely empty: used by few buses, even fewer trucks and ‘bajaj’ – the Indian-made motorbike three-wheeler with the typical low axle, making them inappropriate for the typical rural roads. But there is a variety of ‘intermediate means of rural transport’ – high duty, multi-purpose motorbikes for instance, that could and should fill the large transport gap.
The case could not be more timely – with the rural-urban divide opening wider and wider and the lack of youth employment opportunities a ticking time bomb. There is a need to invest in stronger and thicker rural business with credit lines and adequate transport.
Young people – few job opportunities
* The research was carried out in two Woredas (Kilte Awle’alo in Northern Tigray) and Raya Azebo of Southern Tigray, Ethiopia in November 2016.