Businesses complain about registration, licensing & renewal process

A paper presented at the third Ethiopian Public Private Consultative Forum (EPPCF) indicated that yearly trading registration renewal is a hindrance and hence should  be suspended.

At the consultative forum held on Tuesday October 30 at Desalegn Hotel, the main problem raised was with the Commercial Registration and Business Licensing Proclamation.
At the forum a research paper that focuses on commercial registration and licensing was presented by Abebe Abebaw, a trade consultant.
Abebe said that the new proclamation that was endorsed in 2010 has not solved the problems related to registration and licensing.
According to the paper presented by the consultant, yearly business license renewal is actually not necessary, unless significant changes have occurred with businesses and their owners. He said that the current yearly license renewal process has created a hectic process on the activities of the business community. “Trading license renewal is not applied in most other countries,” the consultant explained.
He further said that most of the trading work has to be undertaken through commercial registrations, but on the proclamation traders need to have business licenses to undertake trading.
Participants from the private sector stated that in other countries trading is undertaken by registration except in the case of sensitive business types. Abebe also mentioned that the government has to be flexible on this matter.
In addition to the two previously stated points, Abebe raised eight major problems related with commercial registration and licensing. The quality of certification was the other major issue that arose during the discussions.
The research paper indicated that government offices responsible for giving quality certification do not have sufficient capacity to carry out the certification process in a timely and standards compliant fashion.
In a discussion chaired by Kebede Chane, Minister of Trade and Mulu Solomon, President of the Chamber of Commerce and Sectorial Association, most of the issues raised by the business community and the research paper were conceded by the government following the presentation by the consultant.
At the discussion Kebede said that the commercial registration and business licensing process has several problems. “The ministry office is undertaking several improvements to develop the system,” he explained.    
He said that detailed packages and directives are needed to implement the proclamation successfully and to clear any confusion that exists about the proclamation.
“We are applying new software to undertake the modern registration system. This fiscal year the new system will be implemented not only in Addis Ababa, but also in regional offices,” the minister said.
He also noted that the ministry office is installing the new system in collaboration with other governmental offices. “This new system will make the registration and licensing system faster and more modern,” Kebede added. However, the minister did not accept the research paper’s recommendation to undertake business activity with commercial registration only. “Commercial registration is not sufficient to undertake clean trade,” the minister explained.
Related with license renewal, Kebede said that it is necessary to track the trader. “Due to this fact, the yearly license renewal is necessary,” he explained.
According to the ministry, the new system will also give traders the option to renew their licences online. “If the trader can renew the license online using the new system it will not be difficult,” he added.
The other issue raised by the participants, is the improvement of the trade law. Kebede stated that the Ministry of Justice is undertaking a revision of these laws. The minister also noted that his ministry is undertaking a revision because it has a stake in the issue as well.
According to the Ministry of Trade, based on the new trade proclamation, 373,900 traders have registered in the country.
The Ethiopian Public Private Consultative Forum – EPPCF- is a meeting of government officials and private sector stake holders, to discuss problems and solutions in the trade sector. This is the third EPPCF meeting to be held since it was introduced two years ago.