“The Cashflow has to be There!” – Ethiopian Business Review

5 mins read

Having attended his medical education in Germany and then Canada, Melaku returned to engage in the medical business sector. Ten years ago, three of his friends and himself would establish WGGA, a visible player in eye clinical care. Specialized in hematology-oncology, Melaku works at the University of Alberta, Canada, and travels to Ethiopia every three months to manage his business. WGGA Eye Care Center is a full-service multi-specialty practice located in Addis Ababa, Ethiopia. Established in 2012, WGGA offers diagnostics, comprehensive eye examinations, and the most advanced vision correction treatments and procedures for eye diseases and disorders. The center has also worked in building and furthering the capacity of Ethiopian ophthalmologists and allied ophthalmic professionals and is a division of WGGA Medical Services PLC, an organization established by two Ethio-Canadians, who have actively been engaged in philanthropic medical initiatives in East Africa for more than 12 years. WGGA has been one of the beneficiaries of lease financing to procure top-end equipment. In this interview, EBR’s Addisu Deresse had an audience with Melaku about lease financing and his company’s plans for expansion.

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Tell us about your experience with lease financing.
Lease financing in Ethiopia for us was nonexistent until we knew of Ethio Lease. I heard about them and approached them. I then convinced them that we want to be the first one to lease technology. They trusted us and then we bought the first operating microscope. After that, we went in for another machine for laser surgery. We are diligently paying every month. The first one has been completed and ownership has now been totally transferred to us.

Are you planning to utilize the same service further to expand your business?
If they continue supplying us, we have plans to upgrade all of our equipment. We are very happy to engage in leasing. It helps the business be technologically upfront and up-to-date without you having to invest huge capital in advance. So you can go ahead and invest your money in other ways that can grow your business.

What factors go into deciding which leasing options to use?
There are not many alternatives as to both service providers and the services themselves. I still live and work in Canada and I know how these things are. Small, medium and even large businesses use them a lot to get their business off the ground as well as to expand and grow. I know the Developmental Bank of Ethiopia started it and we also have Ethio Lease. There are not many alternatives. So, the decision is very easy, you just go with the available service providers and their services.

What opportunities does lease financing avail for your business?
For me, one needs to have healthy finances in a business. The cash flow has to be there, you have to be financially intelligent, and you should instill financial and fiscal responsibility into your company. You then have to do your metrics. You have to be able to afford to pay the lease. Otherwise, it’s going to be a burden. If you have all those things in place, then the leasing is the easiest way to go because you don’t pay upfront—you pay as you work. You also have the option of buying it back, which is a good option. They will extend their life by another one to three years. And after five years, they will lease another one. That way you can stay on the forefront of the tech competition. Business requires high tech solutions with the utmost possible precision. It has been helpful in that regard.

What is the major milestone in your ten years of service?
There were no trained staff to satisfy our standards. So, we required some trainers from Canada and elsewhere. But now, we have started training university graduates in up to three to six months.

What are your short- and long-term plans for your business?
We celebrated our 10-year anniversary in June. We have been providing comprehensive subspecialty eye care from newborns to elderly patients. Through the years, we have been working to grow all of the clusters within our company. Our immediate expansion is for what we call a regional training academy—a center with the aim of teaching students on how to conduct cataract surgery, among other specialties. We already have an internal institution for training purposes and we’re supplying other clinics, as well. It could be optometrists or ophthalmologist nurses—we have an internal institute for that. So, our goal is to expand ultimately in such a way that would impact the region and play a significant role at a continental level.

And then, subsequent to that, we’re planning to bring an IntraOcular Lense (IOL) manufacturing unit. Then, we’ll try to manufacture that in Addis itself. And then once you have the combination of the two, it’s easier to expand your business outside of just practice. We are also planning to expand into regional areas outside of Ethiopia, to other African capital cities.
Currently, we are studying the market towards manufacturing. We have been identifying which equipment is best for us and we’re visiting manufacturing plants in India and Germany for the purpose. However, we need a place as we’ve grown out of this building that we are in now and are looking to move out.

Skilled manpower as well as control, sterilization rates, and packaging are also focus areas for us. I am hoping we will be able to put it all together in a year’s time or so.
The sector needs focus as, for example, cataract is a major cause of blindness especially with Ethiopia’s altitude. We import every single thing right now for this procedure. Yet, in Ethiopia, every one of us at one point in our life may need cataract surgery.

What have been the major challenges in your line of business?I think the biggest challenge—as with most investors—is policy. Some of the things that we do is new to the government and public. We have to explain these things to the point of influencing the adoption of policies. For example, when we first started receiving patients from neighboring countries, there was no insight into the idea of medi

cal tourism. We pushed for a policy that could manage the practice of medical tourism and the idea of receiving payments in foreign exchange. We collected data from people who have been knocking on our doors and we presented it to the government. So, most of our policies are not far reaching enough. The harmonization of custom services and other parts of government has also been quite a challenge, especially for a business like ours that imports most of its requirements.

Do you expect more challenges in your business sector given the current challenges the country is undergoing?
Yes, it’s a growing pain. You’re right. But you know, as Ethiopians, the decision to invest in your country is not only the plus versus minus issue. It is more of accountability. It’s the love for our country and for our people. That is the major driver. Of course, if you have conditions to invest or not, perhaps none of your conditions could be met. If you’re just a businessman, you’re looking for areas where you can do business more easily.

But one also has to look at how things have also been improving over the last ten or so years. This is a nation that started so low. Look where we are right now—be it in the financial sector, in the culture of work, trained manpower, and so on. Yes, there are going to be challenges but that shouldn’t deter you from doing business because there are also a lot of opportunities. As numerous as the problems are, the opportunities are even better. So you just have to innovate. This is a developing country that started so low in trying to catch up with the world.
Leasing is the easiest way to go because you don’t pay upfront—you pay as you work.

When we first started receiving patients from neighboring countries, there was no insight into the idea of medical tourism. EBR


10th Year •July 2022 • No. 109

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