The chamber challenge

Getachew Regass, Secretary General of AACCSA Abebaw Mekonnen, Vice President of AACCSA and Elias Genete, President of AACCSA

The Addis Ababa Chamber of Commerce and Sectoral Association (AACCSA) has kicked off its general assembly to mainly revamp the daily income perceptive of the Ethiopian Revenue and Customs Authority (ERCA) that has been one of the top discussed issues in the country within the past Ethiopian year. The drop of donors fund influenced the revenue of the chamber.
On the city chamber general assembly held at Intercontinental Hotel on Thursday October 5, members of the chamber raised several issues regarding the current status of the chamber and its performance in the past fiscal year, out of which topics of tax and daily income evaluation process sat at the top.
Some of the members have blasted against the daily revenue evaluation process and the role of their chamber. They have also criticized the authority who undertook the perceptive after six years, instead of every year according to the rule imposed about seven years ago.
On the latest public Private Partnership Dialogue Forum chaired by Prime Minister Hailemariam Dessalegn the issue has been a priority and the PM has accepted the criticism that came from the business community.
He said that ERCA was not doing its homework very well. Members of AACCSA, on the other hand, said situations are going according to the norm. The business communities in the capital and other regions have expressed their anger about the perceptive and some even have closed their shops in the capital and regional towns for days.
The chamber management and the board chaired by Elias Genete said that the chamber is putting its effort to solve the problem.
“We have been discussing with ERCA to settle the issue and give members acceptable evaluation,” Elias said.
Members on the other hand said that the media had played a better role in solving this issue than their institution.
The chamber’s general assembly attended by about 1,300 from its total of over 15,000 members has concluded its smoother session compared to conferences held in the preceding periods.
Previous hot debates and disagreements at the chamber have been during the election period.
In his annual speech, the president stated several achievements that AACCSA registered in the past one year. The gathered members have also appreciated its works.
The president said that AACCSA has got 3,000 square meter land from Addis Ababa City Administration around Megenagna for the construction of its HQ.
The city administration has also allocated 8.5 hectares of land for the expansion project of Addis Ababa Exhibition Center and 300,000 Euros for the feasibility study of the center.
The Addis Africa International Convention and Exhibition Center is the other new project that Elias mentioned on his report. The project was launched in June.
Donor fund drops
The chamber has registered massive achievements in the past year, with a significant increase of revenue compared with the 2015/16 budget year.
The income that chamber earned in the past few years has significantly increased in the past years.
For instance, in the 2015/16 fiscal year the chamber has earned 65.5 million birr with about 12 million birr more than the 2014/15 budget year.
The revenue that AACCSA earned in the 2016/17 budget year was 57.6 million birr, which is 8 million birr less than the preceding year’s achievement.
One of the members raised this issue to the leader seated at the stage when sufficient answer was not given from the podium, according to experts.
Elias said that it is recalled that the past trade fair was not stable. “The security issue has reduced the number of oversee exhibitors used to attend the trade fairs, organized by the chamber every year, including some of the major source of revenue,” he said.
Getachew Regass, Secretary General of AACCSA added that the revenue collected from the members has declined. Only these two points were raised by the leaders of the city chamber as reasons for the revenue decrement.
However the external audit report done by TMS Plus indicated that the chamber has earned 7.49 million birr from membership registration and annual subscription and 7.1 million birr from international trade fairs. While both revenues have shown slight decrement they cannot be considered as major reasons for the general revenue shrinkage.
A year ago the chamber collected 7.9 million birr and 8.79 million birr from members and trade international trade fairs, which is higher by 410,000 and 708,000 birr respectively.
But the audit report stated that the revenue that the chamber earned from donors has reduced by close to 300 percent compared with the 2015/16 performance.
The external audit report stated that a year ago the chamber has earned over 21 million birr grants from partners mainly from international donors and embassies, but this revenue has dropped to 5.9 million birr in 2016/17 budget year.
Meanwhile, the revenue shrinkage observed from the president and the secretary general grants were not spoken about.
Experts told Capital that the chamber uses grants as a source of revenue for projects that it runs for a given year or years. To get this grant, the chamber competes in a bid launched by international donors after it assesses funds for projects that it designed.
“The decrement of revenue is the weakness of the chamber’s management who is responsible to asses finance to launch projects and programs that could be run under the institution,” an expert said.
In the past year the chamber launched only a single project, which is less than its previous trend, according to experts.
An expert who knows the chamber very well told Capital that donors fund has been one of the major revenue sources for the institution. “In the past few years AACCSA has registered ample success in the collection of fund from various sources than the last period,” he added.
The expert who demands anonymity said that donors have approached the chamber since they are confident in the institution’s competence. Furthermore, the chamber is looking for source of financers for the project that it has targeted to undertake.
“Credibility of the institution in the eye of donors has been shaken, contributing to the current revenue decrement from international donors,” the expert provides his analysis.
“The controversies in the past that reaches up to the court may affect the image of the chamber in the face of the potential financers,” he added.
The revenue from grant registered significant decrement for the year the chamber has earned higher revenue on sundry and from Exhibition Center and Marketing Development Enterprise.
The revenue earned from sundry is 23 million birr, which was close to 17 million birr a year ago. The exhibition center revenue has also grown by more than 3 million birr and reached 13.9 million birr.