MG Consultancy, in partnership with the Ethiopian Business Advisory Service Providers Association (EBASPA) and with funding from GIZ, has delivered a landmark study titled:
“Navigating the Legal and Regulatory Landscape: Impacts on Business Development Services from the Perspective of Business Advisory Service Providers Across All Sectors in Ethiopia”.
This 99-page research examines Ethiopia’s Business Development Services (BDS) sector, offering timely insights into how legal and regulatory frameworks shape the delivery of support services to MSMEs, startups, corporates, public enterprises, and private business institutions.
Why BDS Matters
The BDS platform is one of Ethiopia’s flagship initiatives to bolster entrepreneurship and innovation. However, to unlock its full impact, BDS must be underpinned by coherent and supportive policy mechanisms. This study was commissioned to critically assess these frameworks and examine how they can enable high-quality advisory services for the country’s growing enterprise ecosystem.
Research Approach
Data was gathered using:
- Surveys and Key Informant Interviews (KIIs) with major BDS stakeholders
- Literature and legal framework review specific to BDS and Business Advisory Service Providers (BASPs)
- Thematic and content analysis for qualitative insights
- Descriptive statistics (percentages, ratios, charts, and tables) for quantitative data
- Critical document analysis of proclamations and policies to assess context, capacity, coordination, and gaps
Key Findings
The BDS landscape in Ethiopia faces several systemic challenges:
- Structural imbalance: Services are heavily concentrated among a few BASPs.
- Institutional fragmentation: Lack of coordination and unified quality standards.
- Regulatory ambiguity: Many startups are hindered by unclear licensing and compliance frameworks.
- Competition with informal providers: Unregulated players dilute the credibility of formal BASPs.
- Under-leveraged BASPs: Legal constraints limit their reach and impact, not capacity.
Stakeholder Demands
There is growing consensus among stakeholders for decisive reform focused on:
- Capacity development
- Regulatory clarity and streamlining
- Targeted financial incentives
- Market regulation
These align with Ethiopia’s broader development objectives toward a more structured, transparent, and accountable BDS system.
Recommendations
To create a thriving BDS ecosystem that empowers MSMEs and startups, the study proposes the following strategic actions:
- Establish a dedicated legal and regulatory framework for BASPs
- Revise tax policies to incentivize developmental BAS provision
- Regulate and integrate NGO-led and donor-supported BDS programs
- Strengthen BASP representation and stakeholder engagement
- Expand professional development and local capacity
- Enhance digital services and market linkages
- Create tailored regulatory systems for incubation centers and startups
- Promote ethical standards and competency for BASPs
- Support BASP export promotion via EBASPA and other CSO-led platforms
This research offers an urgent call to action for stakeholders across sectors. Strategic, inclusive reform efforts are essential to realize Ethiopia’s vision for an empowered, innovative, and sustainable BDS sector.