ADDIS ABABA- Encouraging private participation is at the top of government’s agenda but the regulatory environment remained a greasy pole to start and sustain businesses.
A fact that corroborates this claim is the World Bank Group’s annual ease of doing business report that ranked Ethiopia 159th among 190 countries. Countries are ranked on their ease of doing business, from 1–190. A high ease of doing business ranking means the regulatory environment is more conducive to the starting and operation of a firm. The rankings are determined by sorting the aggregate scores on 10 topics, each consisting of several indicators, according to Doing Business 2019 report.
Ethiopia has, thus, rolled up its sleeves to improve the rank at least to 100th position. A steering committee led by Prime Minister Dr. Abiy Ahmed, comprising members including those with a ministerial portfolio as well as commissioners and Deputy City Mayor of Addis Ababa City Administration periodically meet and review progresses achieved and challenges faced in the effort of providing a better conducive business environment.
A major focus of the sectors include but not limited to, according to Doing Business Database, ease of starting a business; dealing with construction permits; getting electricity; registering property; getting credit; protecting minority investors; paying taxes; trading across borders; enforcing contracts, and resolving insolvency.
The committee has identified 80 distinct actions to be delivered across 10 government agencies, according to Office of the Prime Minister. “The initiative is expected to make Ethiopia a competitive place to start and grow businesses.” Each and every sector has started to take measures that could improve the country’s ranking.
Public Relations Director of Ethiopian Investment Commission Mekonnen Hailu told The Ethiopian Herald that the Commission launched platform to give investment license and other services online. “We aim to cut time and cost incurred on businesspersons and to provide hassle-free services,” he said.
Also, the investment policy is being reviewed. Stakeholders as well have enriched it. To him, it will be ratified shortly. He further stated that the draft investment policy will address the constraints of its predecessor. For example, there were no details about areas of investment closed for foreign investors, and those reserved for domestic ones, he added.
For his part, Trade Practice and Regulatory Sector State Minister of Ministry of Trade and Industry, Eshete Asfaw, told The Ethiopian Herald said the Ministry has accomplished major tasks that make accessible commercial registration and business licensing.
It has as well removed a previously mandatory proof of lease or rental agreement for a physical business address that was required for registration and business licensing.
Publication of company names via newspapers and a 15-day waiting period for approval has been eliminated as it is a hindrance for business registration, he adds. The Ministry also will start online registration and business licensing, he notes.
Governor of the National Bank of Ethiopia (NBE) Dr. Yinager Dessie argues that one of the requirements to improve doing business ranking is the improvement of the credit system.
Hence, a new directive on credit information system and a draft proclamation on “Movable Properties Security Rights” are the two prominent undertakings NBE has undertaken over the past two months, he told The Ethiopian Reporter earlier last May.
“NBE’s credit registry database covered only 0.4 percent of the total adult population of Ethiopia until very recently, Yinager disclosed; however, the three million microfinance customers who have been added to the database system, [has helped the bank] expand to six percent.”
According to the study of the World Bank, it takes 32 days to get business licenses in Ethiopia while Rwanda and Kenya managed to slash it to four and 11 days respectively.
According to Office of the Prime Minister, eight new laws and 40 procedural and administrative reforms were enacted over the past few months, to reduce the time, cost and procedural hurdles businesses face from startup to operation and exit.
The Ethiopian Herald, July 19/2019
BY ABDUREZAK MOHAMMED
