BY ABEBE WOLDEGIORGIS
Following the coming to power of the reformist government of Ethiopia some three years ago, the Ministry of Trade and Industry has established a committee that runs the amendment of the commercial code to replace the trade law issued in 1960. Recently, the effort exerted regarding this issue bore satisfying fruit because the new commercial code is endorsed by House of Peoples Representatives (HPR).
More than 825 articles of the old codes were amended and this helps the nation to accentuate to be a member of the World Trade organization (WTO).
While made an exclusive interview with the Ethiopian Herald recently, Kebour Ghenna, Executive Director of the Pan African Chamber of Commerce and Industry said that the newly ratified commercial code improves and modernizes trade and investment environment and places the nation in the 21st century business arena. In addition, it plays pivotal role in accelerating the nation’s economic growth.
Kebour Ghenna further said that the newly introduced commercial law simplifies doing business and creates enabling environment for the flourishing of business based on competition which paves way for the emerging of self -sustaining private sector.
On the contrary, according to Kebour, the previous law did not permit individuals to establish a single person owned Private Limited Company. Therefore, one was obliged to establish a company joint venture with more than two persons. As a result, individuals were forced to have shareholders in their company unwillingly. But the new commercial code removed this article from the code and permitted individuals to establish their own company with no inclusion of others and such approach enables people to do business without hurdle bureaucratic process.
The law also creates fair playing fields to all. The taxation system comprised in the law also encourages people to involve in the business. On the other hand, it provides new approach to the resolution of disputes among business actors. They can easily resolve their disagreements in a civilized way with no prolonged legal battle in court.
As to Kebour, formerly, returning back of license and regaining from the pertinent office for quitting and resuming business was very cumbersome. As a result, individuals were forced to stay idle for long without doing other jobs and this in turn made them to waste their money and time. The new code, however, avoids this problem and business men can regain their license and resume their business with in short period of time.
He further said that, the new commercial law enables the nation to be member of the World Trade Organization as quickly as possible which again broadens its role in Africa’s free trade areas and the globe as well. 90 percent of countries participate in African free trade areas are the members of the World Trade Organization and they modernized their commercial laws in line with WTO requirement and now Ethiopia also fulfilled one of the most required criteria to be a member.
Asked whether being membership of WTO opened the way to other countries to dump their commodities here in Ethiopia, he said that Ethiopia also has a chance to penetrate other countries’ markets but what is required is instead of exporting raw materials, exporting finished products put the nation in more advantageous position.
Melaku Alebel, Ministry of Trade and Industry, recently the said that the new code can be said the one step forward in improving the livelihoods of law income groups, creating jobs and creating significant number of the middle-income citizens.
During the debate in the parliament on the commercial code amendment, Meseret Abate, Chairperson of the standing Committee for Trade and Industry Affairs at the House of Peoples Representatives said that the 1960 commercial code was prepared by five volumes. But the new code comprised all the articles within three volumes.
It has basic laws both by content and shape and considered the validity of international trade laws and also has additional concepts.
The new code stipulates that, as long as respecting the law, anybody has the right to engage in trade business be it individually or as a share company. The codes also prepared as to be instrumental for the flourishing of stoke market. Particularly, it defends the interest of the shareholders with small amount of capital and supports the modality how they could contribute money for the formation of capital market and share profits.
As to the chairperson of the committee, the commercial code tells in detail about how trade is incepted, gets birth and collapsed. The members of the capital market have also the right to establish their own governing laws.
This again tells what matters the new code included. On the other hand, in case crime is committed while doing business the cause will be seen by criminal code.
Formerly, fragmented commercial codes and other related issues determinant to the execution of the law were included. It also serves to elevate the status of businessmen to the higher level through making money.
As to Meseret, one of the limitations of the previous law was that it did not go in line with the other countries commercial laws which are relatively modern and so that some crucial and helpful codes are taken from these countries’ laws and became part of the new code so that, the problems could be addressed.
On the otherhand, some articles which hampers doing business easily are removed and replaced by better articles.
Formerly, joining trade business was cumbersome but now the bottlenecks are removed. Now, anybody who is potent in financial capital and interested to engage in trade can easily join the field.
Traditionally, traders rarely practiced businesses such as agriculture, forestry, animal husbandry and hand crafts but now these areas are defined as major business areas by the new code.
Some of the areas the traders are allowed to engage by the new commercial code are, exchange of moveable and immovable properties via money transaction, exchanging the property with other items or renting to others.
Other business areas accessible due to the amended commercial code are engaging in agriculture and forest cultivation on land possessed by law; engaging in cattle rearing and selling animals’ byproducts such as milk, eggs; provision of warehouse services; involvement in hand craft as well as exploring and extracting natural gas, oil and minerals and providing support to these activities.
The Ethiopian Herald 18 April 2021
