Turnover at a major D.C. government department is raising questions about local businesses, political contributions and influence in city politics.
The Washington region is home to several large diaspora communities, hundreds of thousands of people who came to the area after fleeing violence in countries like Ethiopia and El Salvador. Many people in those communities send money back to their home countries through remittances, but a budding group of successful business persons are taking that process to another level. During a recent trip to Africa, Kojo spoke with two members of D.C.’s Ethiopian diaspora who are focused on investment opportunities inside of the country where they grew up.
- Henok Tesfaye Owner, U Street Parking
- Zemedeneh Negatu Managing Partner and Head of Transaction Advisory, EY (formerly Ernst & Young) in Ethiopia
MR. KOJO NNAMDIFrom WAMU 88.5 at American University in Washington, welcome to "The Kojo Nnamdi Show," connecting your neighborhood with the world. Later in the broadcast, slavery's exiles. We'll explore the history behind those who escaped captivity and lived on the margins in the southern United States. But first, Diaspora communities in the Washington region who are reshaping the present of the countries where they came from. The Washington region is home to hundreds of thousands of people who came to the United States to escape violence in countries like Ethiopia and El Salvador.
MR. KOJO NNAMDIMany members of those diasporas built successful lives here, and continue to send remittances back to their families. But a month ago, when members of our team were traveling to Ethiopia on a trip sponsored by the aid organization CARE, we met two Ethiopian born men, with ties to Washington, who are leading a wave of Diaspora driven investment in Ethiopia itself. The first we spoke with was Henok Tesfaye, a man who came to the Washington region from Ethiopia as a teenager, and pivoted from working a job as a parking valet to owning a business of his own, U Street Parking, to becoming the indisputable parking king of D.C.
MR. KOJO NNAMDIAt title he soon hopes will extend to Addis Ababa, as well.
MR. HENOK TESFAYEI'm gonna try and expand the parking business in Addis Ababa. As we speak, we're bidding on the airport parking contract. Actually, we're just got the technical proposal, you know, we got a very nice court. And we're waiting for the financial to be opened. We want to manage our own airport parking here, as we speak. You know, we manage maybe five different airports in Washington. I manage the Dulles Airport right in, and also the three airports in New York, which is JFK, LaGuardia, and Newark, as well.
NNAMDIYou know, when I first started going to the Islander Restaurant in Washington, D.C., there used to be street parking there. And then all of a sudden, there was no street parking, except suddenly there arrived a parking lot right down the street from the Islander. That was your first parking lot.
TESFAYEYes. That was my parking...
NNAMDIYou saved me a lot of tickets.
TESFAYEYeah, the Islander is one of the famous restaurants in early 90s on U Street. That's when I opened, you know, U Street. You remember what U Street looked like in the early 90s. I opened in 1998 in May. I had only 22 parking spaces.
NNAMDII remember that parking lot well. It saved me very much, but the Ethiopian Diaspora in Washington is the largest Ethiopian Diaspora there is, and you are one of its more prominent representatives. What would you say that Diaspora means to Ethiopia itself?
TESFAYEThat's a very good question. I mean, I know Washington is one of the largest Ethiopian community or Diaspora, as you say. Tell all the diasporas this is -- you know, I want people to come and invest in their country. And you know, Ethiopia is rising. This is, I think, it's gonna be one of the best city in Africa, and I always tell people, you know, you guys need to come and just, you know, and come home and -- I want people to come and take a look at it. And you know, take a piece of investment, if they can.
NNAMDIBut already, Ethiopians in the Washington area, probably, remit a lot of money to Ethiopia itself. And so they already have an influence, but over the course of the past decade or so, an increasing number of people like you, Ethiopians who have done well in other countries, are looking here to invest. It seems as if your patriotism and your business sense have merged at this time. What is the business community, or the business environment like in Ethiopia today?
TESFAYEThe business community -- I mean, every year, I come. I know, I come here two, three times a year. Every time I come to Addis, I see a lot of change. And I feel good about it, you know? You know, Diaspora are coming from Washington. We want to bring, you know, what we saw there, we want to bring our experience to our country. So, I see the business community is changing, growing. Every year I come, I see change. So I feel great about it.
NNAMDIOf course, there are still some infrastructure problems that have to be dealt with, such as power outages. But, in general, the Ethiopian economy seems to be growing at a fairly rapid rate.
NNAMDIWhich is one of the reasons why people like you are attracted here. Was this always one of your ambitions? I mean, you started working in parking lots in Washington. You arrived in Washington when you were 17 years old, and you started working in parking lots. But you always had a dream of building a business. Did you also have a dream of building businesses here in Ethiopia?
NNAMDIAnd so, now you are being able to realize that dream? How long is this going to take?
TESFAYEI've been in business for the last 15 years, since 1998. I have 1200 employees nationwide, in the States. But my goal is, now, I mean, I want to invest in my country, so I think this is a time that I think I'll be investing in my country.
NNAMDIIs it, as an Ethiopian born business man who's living abroad, you, I guess, will be competing with Ethiopian born businessmen who are living in Ethiopia. What's that challenge like for you?
TESFAYESo far, I mean, I haven't seen that challenge, you know? So far I haven't seen that challenge, but maybe I'll face it in the future.
NNAMDIYeah, because I am from Guyana myself, South America. And one of the problems that we often have is that when people, Guyanese who are living abroad, go home to invest. Guyanese who have been living at home all the time say, well, you're giving them -- the government is giving them things that they never gave us here. You haven't run into that problem.
TESFAYENot yet. Not yet. Maybe in the future, but I haven't run into that problem yet.
NNAMDIWell, you also had, in Washington, D.C., a restaurant that you opened for your mother.
NNAMDIAny plans to open any restaurants here?
TESFAYEYes. My mom always, you know, I opened a restaurant for my mom in 2004, I mean, we were rated one of the top Ethiopian restaurants in Washington. Washington Post, Washingtonian, you know, different magazines. My mom's always pushing me -- can you please use my name? You know, Tete is my mom's nickname. Can you please open -- if you guys ever are building something in Ethiopia, I want you to use my name. You know, as a second restaurant, so she can come and retire and working at the same time.
TESFAYESo that's on the plan, but it's in the early stage right now.
NNAMDIWhere do you consider home?
TESFAYEI consider home Washington, but I still love Addis. I was born in Ethiopia. But I grew up in D.C. Washington gave me a lot of opportunity. And I come back and forth to Ethiopia. You know, I consider myself -- I live in Washington. I feel like I'm home there. But, you know, I'm wanting to invest and come and do work in Ethiopia as well.
NNAMDIAnd I can tell you, once you are successful in doing that here, the trend of members of the Diaspora coming back here to do business is probably going to grow even more, so in a lot of ways, all eyes are once again on you. How does that feel?
TESFAYEIt feels good for me, because I want people to come. Because if I come in, you know, if the door's open for me, and the other diasporas who works for me and the people who are on the other side, they will see how, you know, this is welcome, you know?
NNAMDITesfaye still lives in Washington, but another man we met that night has moved his home base from the D.C. area back to Addis Ababa. Zemedeneh, or Zem Negatu, is managing partner of Ernst & Young, now known as EY in Ethiopia. He told us the wave of investment from the Diaspora back into Ethiopia, is just beginning. And that despite stories like one about the hijacking today, one need look no farther than Ethiopian Airlines for proof of the country's economic potential.
MR. ZEMEDENEH NEGATUEthiopian Airlines is actually the largest airline in Africa. And this year, they made more money than all African airlines combined, which is kind of remarkable, because when we started working with them, eight, nine years ago, they were like in the top ten African airlines with only 11 aircrafts. So, to me, it's actually a reflection of where Ethiopia has come since I moved here. Actually, I moved here from D.C. a few years ago. The Ethiopian economy actually mimics the growth of Ethiopian Airlines.
MR. ZEMEDENEH NEGATU10 year ago, the Ethiopian economy was the 10th largest in Africa. Today, it's the fourth largest. It's actually 25 percent bigger than the Kenyan economy, which is usually referred to as the largest in East Africa. So, for us, working with Ethiopian Airlines gave us sort of an insight as to how this economy can transform if we can transform an airline to become the biggest in Africa. So, these are just some of the things that we do here, and specifically for Ethiopian Airlines is we have developed what's called the Vision 2010 Strategy for them back in '05 and '06. And they've exceeded that.
MR. ZEMEDENEH NEGATUAnd their goal is, in the next 10 years, to have somewhere between 90 and 120 aircrafts, okay, which is -- I know by American standards, these are small numbers, but outside the US, an airline that has, you know, nine billion dollars of revenue, 120 aircraft is actually very large. And it's an illustration of what this country can achieve and it's starting to achieve, as you probably have seen some of the numbers from the World Bank over the last 10 years. The GDP has grown by an average of 10.6 percent every single year. And you know our GDP grows more than the United States during that period.
NEGATUI actually saw today was 1.8 percent over the last 10 years, so it's an illustration of where this country's going, and especially one of the messages, because your program's broadcast in Washington, which I follow regularly when I'm there.
NEGATUIt's one of the best programs, to be honest with you. The Diaspora in the United States, actually, the message we send to them when I come and give speeches in D.C. and throughout the United States with the Diaspora, it's actually look at what is taking place here. The growth. And how we -- returnees like myself, can contribute to the growth of this country. And we see this, actually, in the broader Africa, because I travel 90 percent of the time. The Diaspora is actually making a big contribution in Africa and is starting to make a big contribution here in Ethiopia.
NEGATUNot just the remittance, by the way. The remittance is substantial, but it's actually the bandwidth, the intellectual, the human capital, the expertise is actually what we need a lot more. You know, the last few years, I've had the chance to speak at the Harvard Business School every year at the African Program. When we started speaking there in '07 and '08, not very many Africans were considering moving here to Africa. But more and more, every year, when I go there, there is actually the curiosity. Most of them, Harvard MBAs, wanted to go work for Goldman Sachs, and they still do, but more and more are now curious.
NEGATUAnd we started to see more of it coming to Ethiopia.
NNAMDIAll of this underscores a point you made earlier, and that is that while the Diaspora community may be important, in terms of remittances, it's ultimate importance may be more in what things like Henok Tesfaye is doing. And that is having the business acumen, having the intellectual acumen, having the experience in other parts of the world in doing things.
NNAMDISo, you're saying that the Diaspora community can or will be an integral part, or should be, of this development?
NEGATUAbsolutely. I'll use our firm as an example. I'm the founding partner of Ernst and Young here, or EY. 15 years ago, people thought I was committing suicide to move to this country. Give up the good life in America, or at that time, I was actually in Brazil. And they said, this is not sustainable. What we've done is we've today built up a very sophisticated practice which does cross border mergers and acquisition, from our base in Addis. Fully staffed by Ethiopians. A number of them are Diaspora. Some of the partners are actually returnees.
NEGATUAnd one or two managers are returnees. But by and large, the Diaspora brought this global experience and expertise and has been sharing it with the local recruits that we have, so much so that a lot of the work, the very sophisticated -- the kind of work that you see on Wall Street, the kind of stuff you see being done in D.C. or New York, actually being done out of Ethiopia, across Africa. And that's where I see the value of the Diaspora. Yes, the remittance is important, but to be honest with you, more than the money, what we need is the kinds of expertise that Henok brings in his area.
NEGATUThe doctors, I mean, we have more doctors in Virginia than probably we have in Addis, to be frank with you. So, if you feel the doctors can move here and build up hospitals. The IT expertise that we have around the United States. I mean, what we're doing, at the moment, is making a very rich country richer, you know, the talent that we have in the U.S.
NEGATUAnd Americans have enough talent that I think we can -- we should be able to share the Diaspora to bring here. You see, today we're building the hard infrastructure. Tomorrow the talent is needed to make that infrastructure -- the hard one converted to a work class competitor economy. That's why I'm always, always -- every time I'm in the U.S. -- I'm going to be going in two weeks to give a speech in California and to the Diaspora community to encourage them.
NEGATUAnd just to share with you, we have set up actually sort of a private equity fund dedicated specifically for the Ethiopian Diaspora in the United States so that they can collaboratively raise their funds and bring it here and invest it from the financial side. But at the same time, we're trying to encourage them to come and invest their talent.
NNAMDIIs that the vision you had 15 years ago when some people thought you were committing professional suicide?
NEGATUWell, this is -- hindsight is always 20/20, right? So I thought I was smart enough -- I mean, my timing -- and I'll very quickly share with you -- my timing was actually horrible because I came here to build a factory. I was out of this business. And if I'm smart enough why am I not, you know, the client? Why am I -- so my wife and I we started building a factory. And a month after we started building the factory, Ethiopian and (word?) went to war. I mean, that is really just an amazing coincidence. We almost packed our bags and went back. But we said, no, we're not going to give up on this country. We know that war will come to an end. We thought and like to think we're smart enough to see the reason, but things worked out well.
NEGATUAnd today, all of the Diaspora, when they see me in the U.S. in Washington they say, I wish we had moved. And quite a number are actually starting to come here. So things have worked out well. And that's when I encourage them, come here with a glass-half-full perspective, not a glass half empty. Then you will have a realistic expectation of what it takes to do well in an early stage of margin economy, which is what Ethiopia is.
NEGATUA lot of the Diaspora will come here sometimes and make the mistake and say, well, if this was in the U.S. things will do -- you know, the power wouldn't go out so often or the mobile connection would be faster. And I said, well, if we get to that stage the 30, 40 percent returns you get on your investment will not be there. It will be a saturated market. It's kind of a tradeoff to a certain extent. So if you come with a realistic expectation, I think you will do it.
NEGATUThe other thing is remember, this is the second most populace country in Africa, after Nigeria.
NNAMDI93 million people.
NEGATU94 million people. So -- and by our forecast, by 2025 there'll be 120 million of us, okay, if you assume 8 to 10 percent GDP growth. With that kind of population growth you can see the opportunities. So even if you run into obstacles from time to time, just put that in context, see where is this country going. Can I benefit and most importantly, can I contribute to this country? And that, I think, is the key message I have for people, especially who listen to your program.
NNAMDIThank you so much for joining us.
NEGATUThank you for having me.
NNAMDIThose conversations with Tesfaye and Negatu were both recorded in Ethiopia in January when members of "The Kojo Nnamdi Show" staff traveled to Addis Ababa on a learning tour hosted by the aid organization CARE. When we come back, slavery's exiles. We'll explore the history behind those who have escaped captivity and lived on the margins in the southern United States. I'm Kojo Nnamdi.
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