The private sector in Ethiopia has issued a firm demand for the government to cease direct involvement in trade and business activities, citing pervasive corruption, bureaucratic hurdles, and an unpredictable regulatory environment as key barriers to investment and economic growth.
Representatives from the Addis Ababa Chamber of Commerce and Sectoral Associations (Addis Chamber) voiced these concerns during a recent forum themed “The Role of Business in Peace Building Initiatives,” where the link between business ease, peace, and investment was highlighted. Shambel Mideksa of Addis Chamber stated bluntly that government pressure on businesses “must stop” to allow the private sector to thrive. “Business is the legitimate right of private investors who hold licenses. Investors should be given convenience and incentives, not restrictions,” he said.
The core demand is for the government to “exit from business” entirely, emphasizing that the licensed private sector should be the primary driver of trade and commerce. This call reflects widespread frustration over government development organizations’ extensive interventions, which many believe stifle genuine private enterprise and distort the competitive landscape.
Shambel underscored the difficult operating environment faced by businesses, citing cases where companies are shut down and traders feel “crying, roaring” under regulatory burdens.
Zahara Mohammed, President of the Addis Chamber, linked peace and commerce, emphasizing that sustained peace is foundational for trade, investment, and product movement. She urged the business community to play an active role in fostering peace at all levels.
Adding to the chorus of concern, Ayele Shala of the Addis Ababa Butchers (Lukanda) Traders Association criticized unclear government trade regulations that impose harsh penalties without meaningful stakeholder consultation. Highlighting impractical directives, he questions requirements like mandatory written documentation for livestock purchases, asking, “Pushing the bull, how do you make a document?” Such rules often penalize investors unfairly.
The private sector representatives further accused the current system of corruption, alleging that unenforceable proclamations are exploited by officials demanding bribes under the pretense of withholding tax receipts. “Doesn’t this damage Ethiopianism?” asked one trader, characterizing the crisis as moral as well as economic.
These challenges align with the Addis Chamber’s detailed proposal, “Peace and Investment in Ethiopia,” which identifies legal and accountability gaps as major impediments to attracting investment and enforcing the rule of law. The report points to political interference and entrenched corruption within the justice system, creating uncertainty and risk for investors.
To address delays and investor risk in commercial cases, the proposal calls for improved judicial competence, especially through increased use of technology and expedited dispute resolution mechanisms. While some judges specialize in commercial law, institutional weaknesses and lack of centralized grievance systems impede the effectiveness of justice.
Business leaders also demand better security guarantees, emphasizing that conflicts and protests cause significant losses without adequate compensation, which discourages investment and economic activity.
Suggested solutions include rule of law reforms such as expanding specialized commercial courts, simplifying dispute resolution through mediation, and leveraging digital tools like online filing to enhance transparency and efficiency.
Regarding peacebuilding, the private sector insists it is not solely the government’s responsibility; effective peace initiatives require comprehensive reforms involving civil society, research institutions, non-governmental organizations, and community participation.
