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The European business community in Ethiopia has asked the government to treat domestic and foreign investors the same when they attempt to register their business.
The European Union Business Forum of Ethiopia (EUBFE) wrote a letter to Debretsion Gebremichael (PhD), Deputy Prime Minister for Economy and Finance and Kebede Chane, Minister of Trade, about EUBFE’s concerns regarding difficulties and obstacles registering and licensing their businesses.
The letter was signed by Chantal Hebberecht, (EU Mission Ambassador) Johan Doyer, acting chairman of the EU Business Forum of Ethiopia and head of Heineken requesting a meeting to solve difficulties that EU based investors face in Ethiopia.
“In a spirit of partnership and dialogue, we take the initiative to draw your Excellency’s attention to concerns expressed by a substantial number of the EUBFE’s members (including longstanding European investors) regarding difficulties and obstacles encountered this year in renewing their business licenses,” the letter, written on November 26, explained.
“Because of this, some of them fear that they will have to close their operations in mid-December,” it added.
AmakeleYilema, public relations head of Ministry of Trade, told Capital that he did not have any information about the EU business forum’s complaint. But he said that the Ministry office is developing its duties and responsibilities.
“We are working to eliminate the lack of good governance and to implement a light bureaucracy,” Amakele said. But he admitted some challenges might occur in day-to-day activities.
Even though the Ministry said that it is minimizing challenges, the letter sent to the two ministers stated that continuous and unpredictable changes in the regulations and requirements and the regular introduction of additional standards and administrative requirements make doing business in Ethiopia unnecessarily challenging and negatively impact the country’s entrepreneurial environment and capacity to retain and attract new investors.
“While the registering of a license should be a formality, several of our members encountered unexpected difficulties in renewing their license this year, due to challenges in the investment proclamation or requests for additional requirements that were not asked previously,” the letter stated.
According to the letter: “difficulties and obstacles in the business registration and licensing procedures are a cause of concern (and even grave concern should some of our members be forced to discontinue their operations in Ethiopia) and we ask you to consider revising some of the current legal provisions and practices”.
The letter also recommends that they find a solution for those companies that risk not getting their licenses renewed ahead of the mid-December deadline.
Introducing equal treatment in the registering of a business for domestic and foreign investors will allow the legislation to be compatible with the forthcoming WTO obligations. Another recommendation made in the letter is to introduce the principal of the validity of commercial registration for the whole lifespan of a business, eliminating the need to renew commercial registrations every year.
Eliminating the requirement for permits for expansion and upgrading, as well as integrating the commercial and tax registration, have also been mentioned.
According to ministry officials what the European investors are requesting would require policy changes and take time.
EUBFE was set up in 2012 and represents about 300 EU investors that are active in Ethiopia.
Capital’s efforts to meet Dr Debretsion were unfruitful.