The Adams Pavilion, a dusty shopping center selling aromatic oils, kitschy cushions and costumes in the noisy Sar Bet area of Addis Ababa, is hardly the setting for a flagship shop selling high-value branded shoes to 16 stores around the world, from Singapore to Switzerland to Silicon Valley.
Yet, that is where it all started – from a single outlet in Ethiopia.
Above the din of traffic outside, the diminutive Bethlehem Tilahun Alemu, in jeans, a white T-shirt and blue blazer, her hair coiffed into a careless bun, is retelling the genesis of her hugely successful business, soleRebels, 10 years ago.
To her customers across the world – ranging from techies in San Jose to gym nuts in Taiwan – she has broken every popular perception of Ethiopia. Instead of handouts going into the country, here was handcrafted footwear – with soles made of recycled tires – going out of it to stores across the globe.
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We are sipping espressos – from the local Starbucks-inspired café below her shop – and Alemu mentions that her humble middle class background taught her to be industrious. Her mother helped as a cook in the kitchen of a local hospital, while her father worked hard as an electrician in the same hospital to raise his daughter and two sons.
“Growing up, I saw people trying to make it every day at the hospital. Leprosy patients getting treatment would also work. What I learnt from them is their dedication, how they worked hard and loved life and their culture,” says Alemu.
At home, she had the same rights as her brothers; her parents saw her as no different.
“In college, I wanted to create something authentic at the same time global, supporting the local community. But 10 years ago in Addis Ababa, it was almost impossible to do something like that because of the infrastructure.”
Alemu got married, and at the age of 25, quit her “boring” accountant job in a private company wanting to turn entrepreneur. She had nothing going for her except hope. She wanted to create a brand out of Africa, tapping into the local culture and talent.
“I had to put together a plan and be really brave.” But why shoes?
“I was looking at what people did widely in Ethiopia, and that was scarves, dresses and robes. I wanted to be innovative, and start from scratch.”
Recycled tire didn’t cost anything, and it was not an alien concept. Ethiopia’s rebels had famously fought off the invading forces in ‘barabasso’ sandals made of old tires.
Alemu took this idea and self-financed ($5,000) her dream, starting with five workers in a workshop on her grandmother’s land in the village of Zenabwork.
It took her two years to get it right. Initially, the prototypes weighed six kilos a pair.
“The shoes were really heavy, as I didn’t know how to cut the tire. They looked really funny. I kept trying and trying to develop the perfect product.”
She knew she had to come up with an artisanal product using local fibers she could sell globally moving up the Africa value chain.
“In my factory, in Yeshideble, we don’t have any machinery. You will find a lot of people sewing. It’s like music. We have a unique way of working with communities, where we have a culture of spinning and making our own clothes at home. These women, when they are old, are not so productive, so we give them jobs. We have 120 women who spin for us, they don’t need to go out, we collect [the goods] from them every week…These are mothers, grandmothers…they have their coffee and spin for soleRebels.” They are also paid more than the industry standard.
She is now building a $20-million state-of-the-art factory, to be completed by the end of the year.
“We currently do 200 pairs of shoes a day, when the big factory opens, we will do 2,500 a day.”
Alemu has standalone stores in Barcelona, Vienna, Zurich, Athens, and is set to open her first shop in Canada. She has 12 stores across Taiwan. Her label is certified by the World Fair Trade Organization.
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Her colorful shoes retail from $65 onwards. Earlier this year, Alemu diversified her business to include bespoke leather jackets (available online at about $60), dresses and bags.
Alemu is also launching in September a new coffee brand, Garden Of Coffee, “hand-roasted by traditional Ethiopian coffee artisans”.
Is the mother of three a billionaire yet? There is slight hesitation, and then a smile.
“Let’s see…The company’s growing but we are always looking at investing our monies somewhere.”
And then she says in one breathless sentence: “It doesn’t matter how much I have. What I want is to create a platform for everybody and they can come and work. And it’s something I love to do. I see it, I invented it, it grew up with me, it’s inside me, it’s my baby.”
Ten years ago, nobody talked about entrepreneurs, says Alemu.
“I was not looked at as an entrepreneur, only as a businesswoman.”
Times have changed. Alemu was recently awarded a PhD (Hons) in commerce from Ethiopia’s Jimma University.
“The government believes in entrepreneurs, and I am really happy we get noticed at the end of the day,” she says.
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Her guiding philosophy
“One of the things helping me is not to see myself as a woman. When I see myself as a woman, I always fail. We don’t have the confidence, we always say yes, we don’t say no – that’s going to take you down. Whenever I deal with people in offices, I am a business person. I have a goal and no one can stop me. All I think about is my business and my customers.”
If the last decade was this eventful, where does she see herself in the next 10 years?
“I will probably have 500 stores around the world,” says Alemu, ever the optimist set to ensure that with every step, her country moves forward too.

bethlehem-tilahun-alemu-founder-ceo-soleRebels-footwear-cropped

Heart And Sole

A cold front is sweeping over Addis Ababa from the Eucalyptus-dotted Entoto mountain range. In the gloom of dawn, I shiver and look out from my hotel window at the derelict shell of a half-finished tower block. As usual I am awake as the early traffic noise begins. Despite the gray pallor of the horizon, I set out and take a morning run across the rutted steps of Meskel Square—my feet splashing in rust-colored potholes.
As the shadows lift on the downtown plaza, a more forgiving light gradually reveals hundreds of young athletes limbering up in the drizzle. I know my limits. I am a mere mortal compared to even the least talented of these local runners—most of whom will finish 30 kilometers in a round trip—a day. Rising at 4AM and running between 5AM and 7AM, with their eye on the Olympic dream, this is their solemn and stark ritual seven days a week. It will take the most dedicated years to let it go.
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I may be a stranger in their midst but I know something of their story. I investigated the plight of Ethiopia’s female athletes in 2008. For them, running represented not only a long shot at riches but an opportunity to escape the blight of child marriage which is still common in far-flung rural areas. The stipends paid to the most talented athletes by local associations also ensured the track was a small source of income in a landscape where jobs for young women were, like gold medals, too often beyond reach.
Today, I notice the warring crowds of female athletes, jostling for position along the concrete terraces that line the square, have thinned out.
“More and more are going to college. They all want to work for Western firms setting up shop here,” my driver scornfully tells me.
I have arrived back in Addis to investigate Ethiopia’s thriving leather export industry just as the Swedish retail giant, H&amp;M, reportedly enters the local market with their first small manufacturing hubs in Africa on the outskirts of the city. Other Western firms, notably the British supermarket giant, Tesco, and the ubiquitous Walmart, are also now, according to local newspapers, manufacturing goods here for the first time. This is welcome news in many ways. I know from experience that jobs in the retail sector fill a vital role employing women—although, as recent history in Asia shows us, it is a sector that does not necessarily empower them.
The garment industry and I have had a combative relationship. While a foreign correspondent based in India, I uncovered children in the supply chain of Gap Inc, prompting relentless international headlines and hurtling me into a campaign to expose abundant retail wrongdoing among other Western manufacturers in unimaginable sweatshops from Karachi to Dhaka and Colombo.
It was an issue I couldn’t even stay away from when I first moved to Africa after I exposed suppliers to both Levi’s and Gap, in the tiny kingdom of Lesotho, who were dumping dangerous garment waste and leaking toxic dyes into the heart of an impoverished HIV-ravaged community. An exposé made all the more startling by the fact that the Gap supplier in question was producing clothing for Product Red—an enterprise entirely designed to help the world’s poorest people.
As a consequence, I find myself sitting in an Addis café reading local headlines heralding the creation of garment manufacturing hubs in Africa with both hope and trepidation.
H&amp;M’s decision to look towards Ethiopia as a new low-cost country to produce clothing does not come as a surprise. After all, it is not a newcomer to the textile and garment industry. The first garment factories in the country were built in 1939, during the fascist Italian occupation.
Africa also has a history of production in the sector. Few Western shoppers realize that Madagascan textile factories continue to make clothes for Inditex, the parent company of Zara, and once did so for Gap Inc as well as other major Western retailers. Tunisia and Morocco has been furnishing high street shelves for decades.
But H&amp;M’s decision to move into Ethiopia has captured the attention of many in the garment trade. It comes at a time when many retailers are relying too heavily on nations like Bangladesh for clothing production—a place where many supply chains are at breaking point. Like other foreign firms, H&amp;M, widely seen as an industry leader, inevitably sees Ethiopia as an opportunity to expand its sourcing footprint in Africa, which could come to represent a major consumer market in itself, and not part of a bigger plan to replace its commitment to production in Asia.
But Asia is causing many retailers serious problems. In Bangladesh, sustainability and a series of deadly factory fires has led to international condemnation of the garment industry. The shelf life of China, at least as a source of cheaply manufactured clothing, also appears to be diminishing. According to the research firm, Sanford C. Bernstein, individual garments manufactured in Ethiopia were half the cost of those in China as of 2011.
The Ethiopian government wants to transform its textile and garment industry and has set an ambitious target of $1 billion in textile exports by 2016. In order to achieve this, it is bringing in foreign investors to modernize machines and factories. Other countries like Kenya, Ghana and Uganda are following suit. Led by commitments by firms such as H&amp;M, the garment industry could partly help such nations achieve the goal of moving from primarily agricultural economies to industrial.
Few in the West realize that Ethiopia is the second-most populous country in sub-Saharan Africa, with an estimated population approaching 92 million. According to the United States Census Bureau, in less than 40 years, Ethiopia’s population will more than triple to 278 million. In perspective, in 1967, the population was just 23.5 million.
But it is also a youthful demographic. Half of all Ethiopians today are between the ages of 15 and 24. Yet according to a 2012 US Agency For International Development study, Ethiopia has one of the highest urban youth unemployment rates in the world at 50%. In a nutshell, Ethiopia, like all African nations, needs manufacturing hubs to deliver jobs to young people and in particular, young women.
In my opinion, for major players like H&amp;M and Walmart, the country also offers the opportunity to learn from the mistakes made by the garment industry as a whole in Asia. Shaping sub-Saharan nations like Ethiopia into retail manufacturing hubs offers Western retailers the chance to wipe the slate clean and to work harder to help local suppliers avoid supply chain exploitation and sustainability issues. Above all it could represent a chance for retailers to offer consumers and stakeholders more transparent insight into their supply chains.
But there is already a flaw in this ideal. Today, the sub-Saharan Africa clothing industry is challenged by the fact that it is only partly African-owned. The clothing industries in Lesotho and Swaziland are in fact owned by Taiwanese consortiums. Similarly, in Kenya and Ethiopia, much of the industry is controlled by Indian and even Mauritian investment. Before it even grows to a recognizable sector, sub-contracting already shapes much of the industry in Africa—as does the inevitable out-sourcing of profits from local operations.
Shane Godfrey, a senior researcher in the Labor and Enterprise Project at the University of Cape Town, recently claimed that many of the garment factories in Africa are part of a triangular manufacturing strategy. So, despite often being very large operations, they do little more than assemble garments made in other nations. In the industry, he claims, they are known as caravan factories that can be easily packed up and moved elsewhere.
Godfrey’s argument is simple. He claims that that while foreign investment should be retained and encouraged, there also needs to be more stringent requirements for skills transfer so that locally-owned manufacturing capacity can develop. Controversial perhaps but the argument that Indian factories in the heart of Ethiopia will, inevitably, be less engaged in emancipating the local population and more engaged in taking out profit is hard to ignore.
Major Western retailers should not think about building schools or investing in clinics but framing corporate social responsibility investments around the training of young women to work in the garment sector and ultimately assisting Ethiopians themselves to create businesses that contribute and profit from the promising retail economy. Simplistically speaking, these firms should also keep a tighter hold on sustainability issues in far flung production hubs, such as the disposal of garment waste, the use of water during dry spells and the application of dyes.
In recent years, my own thought processes, as the outsider trying to encourage change in the garment industry, has evolved with reason and deeper understanding.
I strongly believe that Africa needs to become a manufacturing hub in sectors like retail to capitalize on the youth dividend of nations like Ethiopia. But there also needs to be more social responsibility from major manufacturers, who have been part of problematic supply chains in Asia and are now eyeing Africa as the next source of cheap clothing.
H&amp;M, now the second biggest retailer in the world, was the first company to sign a Europe-led safety pact for Bangladesh garment factories after the collapse of the factory in Rana Plaza. This despite the fact the firm had no suppliers in the building. Helena Helmersson, the firm’s global head of sustainability, has also urged Bangladesh and Cambodia to raise the minimum wage and revise it annually. Such commitments at the outset of any involvement in Africa should be expected.
Underlying this entire issue, the dialogue between the stakeholders involved in these supply chains also needs to be more open, honest and robust. The NGOs, the CEOs, the grassroots communities and the regional and national governments all need to be involved from the outset as Africa begins to process and build goods for the West and we all need to discard the distrust we have of each other and learn from the terrible mistakes made in the sweatshops of Dhaka and Delhi.

Investment Or Exploitation?

The world descended on Africa’s political capital, Addis Ababa, Ethiopia on May 9.  The queues were long and winding at Bole International Airport as global airlines landed one after the other, offloading hundreds of delegates bound for Africa’s most exclusive economic event.
Throughout the World Economic Forum on Africa, the streets were abuzz with vehicles and people going about their daily routine, oblivious to the occupation of their capital. This humming capital is the epitome of Ethiopia’s remarkable economic achievements in recent years.
Ethiopia is the second most-populous nation in sub-Saharan Africa with a population of more than 80 million people. It is also one of the fastest growing economies on the continent. The International Monetary Fund (IMF) expects growth at 5.0% and 5.5% in 2012 and 2013 respectively. This is a far cry from growth prospects in Europe and the rest of the developed world. Most Eurozone economies are either in recession or teetering on the brink.
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The skyline over Addis Ababa is full of swinging construction cranes. A delegate, who had worked in Addis Ababa since the late nineties, told of his surprise at the building and economic progress since he was last in the country.
Rain and dark clouds hung over the capital for most of the conference, but this didn’t dampen the enthusiasm as delegates exchanged business cards in the hope of new business opportunities. Almost every conversation talked of how the fast growing continent of Africa was the place to be.
“‘It is a tremendous time for Africa where Africa is coming to the world, and the world to Africa,” says Josette Sheeran, vice-chairman and member of the Managing Board, World Economic Forum, speaking to CNBC Africa on the eve of the forum.
Sheeran, in her remarks at the opening plenary session, said Africa was in an era of the hand shake with people banding together to galvanize the continent’s transformation.
The discussions were wide and varied, ranging from innovation and technology, to social and gender issues. Several themes were pervasive throughout the three days—among them infrastructural development, regional trade, leadership and governance.
Infrastructure development was identified as the biggest impediment, bar none, to growth in Africa.  Donald Kaberuka, president of the African Development Bank, talked of a recent trip to an African capital. To his dismay, this particular city of a million people had water infrastructure to cater for a mere 17,000 people.
This story brings to light Africa’s gaping infrastructure hole. Delegates at the forum were unanimous. Africa needs to invest heavily in roads, ports, railway lines and power stations to remove bottlenecks and promote efficiency in the economy. Sufficient infrastructure will reduce the cost of doing business on the continent dramatically, which will in turn spur investment.
Many African governments have taken heed. Governments across the continent are spending billions of dollars on infrastructure. In February, South Africa, Africa’s biggest economy and by far the most advanced in terms of infrastructure, announced a $100 billion capital expenditure program over the next three years.
The forum also heard Africa’s global and regional trade was at risk through uncertainty created by the Eurozone sovereign debt crisis. Delegates were concerned about low intra-Africa trade.  Intra-Africa trade is only about 10% compared to 70% in the Eurozone; 52% in Asia; 50% in North America and 26% in South America.
Low intra-regional trade is a missed opportunity for growth and development for the continent.  Pascal Lamy, director general of the World Trade Organisation, blamed this low intra-regional trade on poor infrastructure, inefficient border procedures, regulatory discrepancies and insufficient trade finance.
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“The issue of boosting intra-African trade is not so much the diagnosis on what needs to be done, but on how to do it.” He added that “we know that the necessary initiatives have to happen at the regional level. Regional organizations have to address these problems one by one. The key to removing these bottlenecks lies in the political energy of regional leaders to do it,” says Lamy.
Over the last decade, six of the 10 fastest growing economies in the world were African.  Part of Africa’s stellar growth during this period has been partly attributed to good leadership and governance. Kofi Annan, chairman of the Africa Progress Panel, praised the continent’s leadership and governance standards.  He was confident that over the next decade Africa’s progress will continue.
Annan stressed the need for public policy debate which, he rued, was practically non-existent across the continent.  He lamented that as much as there is democracy there is no engagement between governments and their citizenry. As such there is no policy consensus in nations which means that at each change of government, every five or 10 years, there is a change in policy. He said that lack of policy debate not only promotes myopic policies but also policy discontinuity. This limits consensus and nation building on the continent, ultimately putting a cap on economic growth and development.
Gao Xiqing, president and vice chairman of China Investment Corporation, hit the nail on the head when he referred to a quote by Chairman Mao referring to China’s poverty.
“This may seem a bad thing, but in reality it is a good thing. Poverty gives rise to the desire for changes the desire for action and the desire for revolution. On a blank sheet of paper free from any mark, the freshest and most beautiful characters can be written; the freshest and most beautiful pictures can be painted,” he says.
Africa, like China then, is also fortunate enough to have ‘a blank sheet free from any mark’. It is Africa’s opportunity given its many desires to rise and produce a unique, beautiful and heavenly masterpiece in the form of inclusive, strong and sustainable economic growth to lift Africans from poverty.

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Heart And Sole

Investment Or Exploitation?

Build And We Will Grow