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14,000 licenses returned in the past six months
Redevelopment work, higher office rental prices, poor marketing, and bankruptcy have caused 14,000 people with business licenses to stop working and return their license to the Addis Ababa Trade Bureau in the past six months.
Addis Ketema sub city the location of Merkato, has been one of the places where many business have failed because redevelopment work has led to many of the smaller shops being demolished. According to the Addis Ababa Trade Bureau (ATB) the increasing cost of rent is making it difficult for new entrepreneurs. On average 70 business licenses are returned every day. One of the issues is that people often fail to plan.
In the last fiscal year 26,860 licensees were returned to the trade bureau. However, at the current rate the number will be even higher.
Business people in the city have been asking the government to help ease the price of shop rent.
Ermias Haile who sells computers in Mercato told Capital that building owners are increasing the price of rent very rapidly and business people are having a hard time maintaining their business. “Look in Merkato, small rooms are renting for up to 30,000 birr and people have no choice but to go to another place and return their license at the end, but if government builds more buildings more business people will rent offices at a fair price and it will decrease the cost and prevent greedy private building owners from hiking the rent all the time,” Ermias said.
He added that non-taxed import products also destabilizes the market and causes new entrepreneurs to go out of business.
“Some people import products illegally without paying any taxes and sell them at lower prices so those who import products and pay taxes cannot compete with illegal business people.”
Mitke Engeda, who works for the trade bureau says they are struggling to solve people’s problems. “We are in the path of development and we face many problems that challenge the business, we are building business malls and fighting illegal trade to protect the legal business but we cannot succeeded by working alone we need the support of all stakeholders,” she said.
In related news, 56,145 business licenses are facing a penalty because they did not renew their licenses by December 8, 2017.The bureau will fine them 2,500 birr if they pay on time but the fine will increase by 1,500 birr at the end of June.
Currently there are 267,401 business licenses in Addis Ababa and 197,456 of those have been renewed.