The United National Secretary-General will convene the Global Food System Summit in September 2021. The people and solutions summit will be a unique opportunity to move the dial on Food Systems Transformation and deliver on the SDG-2030 Agenda. The process is guided by five interlinked Action-Tracks, addressing possible tradeoffs to deliver healthier, more sustainable, and equitable Food Systems. For each Action Track, Game Changing solutions are being put forward to build momentum on food system transformation in a positive direction at scale.

Ethiopia is leveraging the attention that the UNFSS 2021 has generated to build momentum for positive food systems transformation. Under the leadership of the national convenors, HE Oumer Hussein, Minister, Ministry of Agriculture, and HE Dr Lia Tadesse, Minister, Ministry of Health, Ethiopia is developing a position paper and roadmap to inform aligned actions by all actors to deliver positive food system transformation with strong sustainability considerations and accountability.

The national convenors have appointed the national curators, Drs Mandefro Nigussie, (Ethiopian Agricultural Transformation Agency), and Dereje Duguma (Ministry of Health) who are leading the Technical Committee. To date, Ethiopia has developed a background paper, held a High-Level Roundtable, and hosted the first dialogue.

Dialogue 1 was set to inform stakeholders of the current state of the Ethiopian Food System, and to gather information to identify and prioritize catalytic Game Changing ideas to transform the current state. The dialogue also informed the development of the conceptual framework to pave the way forward. Dialogue 1 took place on the 31st of March and 1st of April 2021.

Speaking at the opening of the Dialogue, HE Oumer Hussein said the productivity level of agriculture has still not reached its full potential, and diversification has remained limited despite the progress made in increasing cereal production.
HE Dr. Lia Tadesse also stated that the dialogue will serve as an entry point for food systems transformation and sustainable healthier diets in Ethiopia for the coming years.

The dialogue which is the first of its kind brought together various policy makers, and experts who presented food system policies, strategies, and results of programs in relation to the Food System Agenda.
Dialogue 2 prioritized Game Changing ideas that were reviewed and endorsed to inform Ethiopia’s position paper and roadmap.

Finally, in July the Ethiopian Food Summit (Dialogue 3) commenced ahead of the UN Food System pre-summit. During the summit, H.E. Ato Oumer and H.E. Dr. Lia endorsed the position paper and roadmap in the attendance of key actors and development partners.

The ATA is proud of supporting the efforts of Ethiopian Food System position paper and roadmap development.

Case title: EABC Strategic Realignment 

Client: Ethiopian Agricultural Business Corporation (External) 

Key words: Strategy / Public Enterprise / Diagnostic 

 

The Ethiopian Agricultural Business Corporation is corporation formed by merging five owned enterprises: namely the Ethiopian Seed Enterprise, Agricultural Equipment and Technical Services Share Company, Agricultural Inputs Supply Enterprise, Natural Gum Processing and Marketing Enterprise, and Agricultural Mechanization service Enterprise. EABC portfolio divides into three kinds of business: commodities, Mechanization, and Support with different size, growth, and profitability.

Financially EABC has evolved to become an ETB 15 BN, multidimensional conglomerate in the agricultural inputs and technology sector. However, normalized EBITDA declined in 2018 in both absolute and percentage terms driven by (lower margin) inputs taking up a higher share of revenue, and an increase in direct costs. 

 

With challenges in internal operational management and in a political context of increasing liberalization (Both in competition and privatization) each of EABC’s BUs are likely to face future challenges. Based on this, EABC contacted ATA to review performance across the portfolio, and define priority areas of focus and investment, to ensure they can be economically sustainable in the long-term.  

 

An Analytics case team was set up with the objective of identifying opportunities and help define a long-term sustainable strategy for EABC. To perform the task, the case team has classified it in to three phases. 

  1. Business profile and diagnostic phase: Assess and profile business sectors to evaluate their strategic position. 
  1. Opportunity identification and Prioritization: Review opportunities for improving business performance (new and existing) based on existing capabilities. 
  1. Deep dive and Recommendation: Deep dive on shortlist of prioritized opportunities and identify mitigation plans for the anticipated risks and recommend enhanced ways of working for EABC overall. 

(The article will cover the methodologies followed on each phase as well as the insights and conclusions) 

  1. Business profile and diagnostic phase: The first phase followed a diagnostic approach where each business units (BUs) are evaluated on their operations (Value chain/ service model overview, Operational strengths /challenges, Performance of key operational metrics), Financial performance (Profit and loss overview, Revenue / volume / profitability, Balance sheet & working capital), Market overview (Size and trajectory, Over / undersupply, Constraints / challenges / developments), and Competitive Positioning (Market Concentration / fragmentation / share, Key Players and BU # in market, Competitive advantage, Market share). Based on the result of the analysis, the case team was able to map an “Attractiveness matrix”, which provides a starting point for setting the strategic direction for each business units

Preliminary view on the strategic direction that the EABC should follow for “Star” business units would be that of Investment and Growth, whereas for the other business units (Cash cows, Challenges, Questions)it should follow a Defend / Reposition strategic direction. 

  1. Opportunity identification and Prioritization: After each business units are assessed and mapped into the attractiveness matrix, a four-step approach was followed to identify and prioritize the recommended strategies for EABC. All possible growth/ defend / repositions opportunities were identified from desk research and expert interviews which were then validated with customer / competitor / supplier interviews and ground truthing. Based on high level timelines, and feasibility analysis the long list of opportunities was shortlisted to progress to high level business case modelling.

In addition to Business Unit specific challenges and recommendations, the case team has also identified that the business units operate within silos with limited coordination and integration even across related businesses leading to reduced operating margin bargaining power, simultaneous under- and over- utilization of manpower across BUs and functions, lack of leveraging customer and market intelligence from other sector leading to missed opportunities such as product/service building.  

Considering that EABC is a conglomerate, it can leverage the variety of sectors and its magnitude to litigate these challenges by following an integrated procurement and sourcing functions across related businesses to maximize bargaining power and gain scale benefits, flexible and dynamic manpower and staff allocation across business to capitalize on common skillsets, and centralized and coordinated sales and marketing efforts. 

  1. Deep dive and Recommendation: At this stage, overall impact of the strategies prioritized, primary scale-up targets to be achieved, and key constraints were deeply analyzed and identified to formulate the implementation sequencing, implementation timeline, and governance mechanisms. 

EABC is a parastatal corporation that works on critical parts of the agriculture value chain, namely the inputs and production segments, that are closely aligned with and support the government’s agricultural initiatives. Therefore, there is a clear opportunity for EABC to leverage strong market position by leveraging capabilities and partnerships to serve the critical market needs. Implementing the prioritized recommendations can have a huge impact on farmer livelihoods leading to ~31M quintal of additional output and an incremental cumulative income of ETB  18 BN  over the course of six years. To achieve this vision, significant provision of forex needs to be ensured through joint ventures, and government allocation of budget.

The vision can only be achieved with a sustained commitment to move from a product oriented, reactive, vertical focused/siloed towards becoming an agile, market-oriented organization through operational transformation and long-term commitment. 

To realize this, the case team proposed to establish an executive task force to focus on implementing the overall as well as components strategies. The task force, aka change management team, will be comprised of EABC staff members from each business units who have been closely working with the case team and are familiar with the overall strategy. 

 

Prepared by: Semere Mulugeta

ATA Welcomes New CEO and Deputy CEO

On January 15th, 2021, Prime Minister Dr.  Abiy Ahmed appointed Dr. Mandefro Nigussie and Dr. Yifru Tafesse as Chief Executive Officer and Deputy Chief Executive Officer of the Ethiopian Agricultural Transformation Agency (ATA), respectively.

Prior to joining ATA, Dr. Mandefro served as a State Minister of the Ministry of Agriculture and led the Agriculture Development sub-sector in the Ministry. He has been involved in the development of several policies and programs including leading the Agriculture Sector Policy Reform of Ethiopia. He also published various articles, journals, proceedings, and research reports in the areas of crop sciences, marketing and entrepreneurship, and biotechnology and biosafety.

Before his appointment as the State Minister, Dr. Mandefro served as the Director General of the Ethiopian Institute of Agricultural Research (EIAR), Country Manager of AGRA, and Deputy Regional Director of Oxfam America. He has taught and supervised postgraduate students in different universities and he is also a fellow member of the Ethiopian Academy of Science and was a member of the Independent Science for Development Council (ISDC) of CGIAR. He has also served as Board Chair, and board member of various institutions. He holds BSc, MSc, and Ph.D. in Plant Sciences, Agronomy, and Genetics and Plant Breeding, respectively and he also has an MBA degree.

Dr. Yifru Tafesse joined the ATA as Director for Private Sector Development in Agriculture in April 2017. He led and coordinated studies on investment incentives, and attracted and converted investment opportunities in agro-processing. Later, he was promoted as the Senior Director to the CEO Office vertical in where he provided oversight to the Agricultural Commercial Clusters (ACC) program, Partnership and Resource Mobilization, Internal Audit, Planning and Reporting, and Communication teams.

Before joining the ATA, Dr. Yifru had assumed many managerial positions, served as an academic, and consultant in a number of government and private organizations. Moreover, he has been serving as a board member in financial institutions and a Chairperson of the Program Advisory Committee (PAC), representing Ethiopia from 2017 – 2021 at BioInnovate Africa, International Centre of Insect Physiology, and Ecology (icipe). Dr. Yifru earned his doctoral degree from the Graduate School of Business Leadership (SBL), the University of South Africa (UNISA). He has a Postgraduate Diploma in Marketing and Physical Distribution at the Maastricht School of Management in the Netherlands, a BA degree in Management, and an MBA both from the Addis Ababa University.