One of the things Prime Minister Abiy has been doing since coming to Office about a year and half ago is to reform the economy, and has been accelerating the process ever since. One element of this economic reform has been to make the business climate more conducive, fluid and non-restrictive. The plan combines a business focus in enabling enterprise to function more easily with a major aspiration to unlock the country’s development potentials.
Among macroeconomic, structural and sectoral reforms the government has been looking to initiate reforms in investment and commercial laws and business climate. The government is seeing the need for comprehensive and sustained economic reform, including significant loosening of restraints on commerce and vastly improved access to capital and finance.
One of such moves, for instance, was passing a bill that allows using movable assets as collateral to access loans from financial institutions. This is a good and positive thing for the economy, as it can help unleash the potential of the country’s small-scale and medium industries and entrepreneurs, as lack of access to finance has been the missing key ingredient to turn their ideas into a reality.
Moreover, Prime Minister Abiy has made his intentions clear in that he wants to hugely improve Ethiopia’s ease of doing business ranking. Already a series of measures that are designed to bypass barriers when starting a business are underway. Works are also already underway to reduce the number of procedures, time and cost to start up a company and formally operate in the country’s economy, which is expected to shift the economic landscape of Ethiopia.
The new reform has zoomed on the private sector as the driver of the next chapter of Ethiopia’s growth and development. So, creating conducive business environment for local investors is crucial, and the government is working with this in mind.
To this end, the government is working to reform the country’s commercial code, and has made it a priority. As one of the eight focus areas of the legal and justice system reform, the government is delegating the Advisory Council – a body mandated to carry out the reform – to undertake comprehensive review of the commercial code.
It is currently working to make the necessary change by taking into account the current global commerce/business dynamism, and by giving emphasis on innovation. Ultimately, the aim is to remove obstacles in order to make the business climate more free for local and foreign investors.
In addition to this, Ethiopian Investment Commission has launched an online service platform in a bid to simplify the process to apply for investment license, and the result so far has been satisfactory. These measures are all taken with a view of making the country’s business climate more conducive.
All in all, the government’s homegrown economic policy makes the private sector a pillar, and this makes creating a business-friendly environment that not only nurtures domestic businesses but also makes them competitive crucial. To that end, all the measures the government is taking should continue in much verve and commitment.
The Ethiopian Herald December 18/2019
