Investment in Bahir Dar Metropolitan City Administration

Ethiopia's market oriented economic development strategy embraces wide reforms with inducements to both domestic and foreign private investments. The private sector is encouraged to invest in almost all areas of the economy. Based on this direction, the Amhara National Regional State has been formulated its own investment policy using the national strategy as a framework. Furthermore, by assessing their context, the Bahir Dar Metropolitan City Administration enacted its own local and lease policy, and then regulations and directives (in order to deepen to the local level). The main contents of the regulation are considered upgrading and renewal as one of the ways of development to t he city. Taking all these ideas the y had taken discussion with business community of the city. Initially the business community opposed the idea; because they were comfortable with their existing business return and they over value risk of investment. The municipality tried other strategy to make Bahir Dar better informally and formally they promote the idea that, our cit y is lagging behind while others are developing, as if no body cares for it and they pushes the act of cooperating to the idea and expected benefits from it. Then few investors took the initiative. After that by looking the benefit of the developers, and through a sense of com petition the investment process is moving fast. Starting from the end of 199 8/99 about 219 investment projects have been identified and 17036 permanent, contract and casual identified workers are employed (Table 1.6.6). The industrial strategy of Ethiopia has a paramount significance to enhance investment in urban centers of Ethiopia. Accordingly, Bahir Dar City is not exceptional and perhaps one of the leading investments focused areas of the country. The strategy has rules and principles that include:

• The private sector play a leading role,
• Agricultural Lead Industrialization is the governing policy,
• Export lead industrialization development,
• Encourage labour intensive industries,
• Cooperation between the national and foreign companies,
• Public-private partnership,
• Government play a private role in creating enabling environment,
• Encouraging partnership,
• Training and entrepreneurship, skills and management,
• Access to appropriate technology,
• Access to markets,
• Access to information and advice, and
• Institutional strengthen and physical infrastructure development.

Using these principles, the Bahir Dar City Administration in collaboration with the Amhara National Regional State Investment Bureau has issued investment certificate on about eight different economic sectors (Agriculture, Commerce, Energy, Construction, Industry, Real Estate, Social Service and Tourism). As per the strategic location, it has and the seat of the Regional Government, West Gojam Zone, Bahir Dar Zuria Wereda and Bahir Dar Metropolitan City Administration, the share of Bahir Dar is expected being significant. The resource potential like Lake Tana and Tis Issat fall are some of the support for the argument described here. The following table (Table 1.6.6) is further verifies these situations.
Policy Framework and Development Strategy:

Policy Framework for Micro and Small Scale Enterprises (MSE)
It is widely accepted that micro and small scale enterprises play vital role in socio -economic development of a country as a means for generating sustainable employment and income. Moreover, MSE's play an important role by providing the founding ground for medium and large scale enterprises, and in the process contributing to the reduction of poverty. Micro and small scale enterprises make a significant contribution to the socio -economic life of the country by way of supporting people to earn money and make a contribution to family incomes and by supplying basic goods and services for local consumption. The importance of MSE's as a vehicle to address the challenges of unemployment, economic growth and activity was not properly acknowledged in Ethiopia. Recently, however, it has got recognition about the sector's economic role and its potential contribution to the country's economic development following Proc. No. 90/2003, where the development of the micro and small scale enterprise, are becoming a subject of national agenda. Now a days the government give emphasis and begun to pay due attention to the promotion and development of MSE's.

Micro and Small Scale Enterprises Development Strategy

In 1990's, the Federal Government of Ethiopia has developed a strategy for the development and promotion of MSE's. The primary objective of the strategy is to create enabling environment for MSE's. Given such an enabling environment, it is expected that hundreds and thousands of MSE's will themselves be responsible for the operation, growth and progress of their enterprises. In addition to this basic objective, the national MSE strategy has the following specific objectives:

• Facilitate economic growth and bring about equitable development,
• Create long -term jobs,
• Strengthen cooperation between MSE's,
• Provide the basis for medium and large scale enterprises,
• Promote export, and
• Balance preferential treatment between MSE's and bigger enterprises.

The national MSE strategy out lined the various supports that should be provided for MSE's in order to assist them to over come the various impediments to their development and become viable business, which can successfully compete in the market more specifically , this includes:

• Streaming regulatory condition (establishing user friendly environment for the simplification and standardization of documents); and
• Other specific supp ort programs:
• facilitate access to finance,
• incentive schemes,
• encouraging partner ships,
• access to appropriate technology,
• access to market,
• access to information and advice, and
• access to physical infrastructure.

As the MSE sector is highly diversified and characterized by an enormous number of problems of varied degree and complexity, it is not possible to address the whole range of MS E's operating in different sectors at the same time. The strategy, therefore, provided the following general principles for prioritizing beneficiaries, which might be adopted in every region and it s urban centers depending on the specific conditions and potentials:

• MSE's which are based on local raw materials and /or labour-intensive, local resource based.
• MSE's which have greater intra and inter-sectoral linkages.
• MSE's which are engaged in import substitution with a potential for export.
• MSE's engaged in activities that facilitate and promote tourism are among other things.

Poverty Reduction Strategy of Ethiopia
The poverty reduction strategy of Ethiopia also shows the governments commitment to continue, initiate, promote and strengthen Micro -and Small-Scale Enterprises development. The strategy points out that the following strategic actions will be taken to alleviate the increasing and growing problem of unemployment:

• Provide vocational and skill-training programs that enable to promote self-employment and job creation,
• Promote micro finance institutions in urban canters,
• Facilitate access to working capital by promoting the establishment of community support mechanisms, and
• Promote community based rehabilitation porgramms for disadvantaged groups (elderly, handicapped, commercial sex workers, street children, minority groups, orphans, etc.) with full participation.