As Ethiopia launches its first capital market, BDO Ethiopia's managing partner Million Kibret shares insights in an interview with Capital on opportunities, challenges, and needs for a trustworthy financial system. Drawing from global expertise, BDO aims to build local capacity and restore public trust amid past unregulated schemes.
BDO Ethiopia, a member firm of BDO International operating in 169 countries, has obtained a license from the Ethiopian Capital Market Authority to guide family-owned businesses toward public participation. Since 2013, it has provided investment and finance consulting in Ethiopia for 13 years, helping such firms expand.
In the interview, Million Kibret highlights that many Ethiopian companies lack operational standards and corporate governance, tying their identity to founders. This leads to collapses upon the owner's illness or death. “Companies are national assets; when those delivering for 50 years falter due to the owner's absence, the national economy suffers,” he stated.
Past unregulated investment schemes have damaged public trust. The Ethiopian Capital Market Authority now enforces strict regulations, with licensed providers ensuring compliance. BDO leverages global experience to train local professionals. “We learn from others' mistakes and adopt best practices,” Kibret said.
Amid bank mergers and impending foreign bank entries, BDO offers advisory services to enhance local banks' capacity through mergers and system modernization. For family businesses, the key issue is preparing succession plans and procedures. Commander Haile Gebrselassie noted at the 3rd Ethiopian Family Business Forum: “I mediate between successor children when founders are absent; problems escalate to court-ordered closures due to lack of succession plans and clear systems.”
Kibret suggests government collaboration with the business community to create frameworks for sustainable operations, including appointing professional managers. Private sector initiatives, like drafting policy documents with peers such as HST Consulting, could support reforms.
