The Addis Ababa City Administration Trade Bureau (AATB) announced that only 122,752 businesses have renewed their licenses out of the existing 262,688. There is only one week left until the renewal period ends. Starting from July 9 the bureau asked business owners to bring clearances from the Revenue and Customs Bureau by January 8 or face penalties.
Addis Ketama, which has the largest number of business, has only renewed 13,178 licenses from a possible 35,000, Bole renewed 15,858 from 42,000. In the other ten sub cities, Yeka, Lideta, and Arada 53 percent of the 60,000 business were renewed.
Recently the government increased the presumptive tax, estimating the tax based on the number of products and transactions in a day, for the first time in six years. By 2020 presumptive taxes are expected to reach 17 percent of GDP. However, tax collection has remained stagnant. To achieve this goal the government is conducting a study to expand the tax base and collect more taxes.
However business people have been repeatedly complaining to the government that the increase in taxes has not taken into account their actual transactions. AATB and customs officials maintain that business people still need to renew their licenses regardless of issues they have with the presumptive tax.
Berahanu Tegengne, Trade Licensing Director at Addis Ababa Trade Bureau told media on December 22, that the Bureau is working on a license renewal proclamation and that each business must renew their licenses even if they have complaints with the Revenue and Customs Authority.
He added that last year 13,692 licenses were given out which is 1,000 less compared to the previous year. However, during the same period 27,116 businesses entered into the market.
High rent prices, poor business planning, less support for entrepreneurs, and lack of a tax holiday are some of the reasons businesses have struggled in Ethiopia which is ranked 161st out of 190 countries on ease of doing business.
The Addis Ababa Trade Bureau (AATB), recently assigned Mesfin Assefa (former mayor of Legatfo) as director.
Only 49 percent of businesses renew licenses in Addis Ababa
TECNO experiences sales increase after tele implements registration system
Sales have gone up for local phone assembler TECNO thanks to the phone registration system that Ethio Telecom has recently put into effect. The company said they had experienced losses when similar phones from other companies entered the Ethiopian market without following the necessary procedures but now this is no longer the case.
“The tele system has been incredibly encouraging and helpful. When our phones are assembled, we follow the correct procedures and pay the necessary tax to the government. In the past we were really affected by phones entering the country illegally. Through contraband it was easy to find similar phones to the ones we assemble here in the market. We have now seen a significant change with our sales after the phone registration system was put in effect recently,” said Liya Gebreyohannes a communications director at TECNO.
TECNO says they are currently focused on assembly, but their long-term plans include manufacturing some parts of the phones locally. Currently, TECNO is number one when it comes to market share and sells its phones that have been assembled in Ethiopia to the rest of Africa and some Asian markets.
“The company has its only assembly factory in Africa, in Ethiopia and it supplies many markets on the continent and some in Asia. Looking at their 2017 performance the company has sold phones worth 50 million USD. It has over 2,000 employees in its factory as well as other facilities and departments,” said Liya.
According to her, every year, the company sets a target the number of phones to be sold in Ethiopia. This December their goal is 43,000.
“The demand for the phones has been really good, one reason for this is the one warranty service we provide as well as other after sales services. One of the most important things in the local market is durability and the long-lasting battery,” Liya stated.
Local soft drink maker to start smoked water
Zebym Trading is set to introduce its new soft drink products by January 11, 2018. The company that set up its 200-million-birr production plant in the Legetafo area currently supplies the local market with three products; bottled water, sparkling water and smoked water.
“We have these products out already and we expect our new soft drink products to be received well and become successful,” said Frezer Abiy, Vice President of Zebym.
The new soft drink product line will have different flavors of passion fruit, Habiscus, and Moringa. According to the company all of the materials for the production will be sourced locally.
“We source the products from farmers. We want to be able to source everything locally and in the future hope to also establish our own market to grow the raw materials,” says Frezer.
The company currently employs 55 workers and expects that number to grow to 90 in the near future. They are also looking into expanding.
“We are bringing something different to the market; of course, there are other well-known soft drinks like Coca Cola, but ours is different and we don’t think we will have a problem getting a good market share,” Frezer said.
Regarding issues around the shortage of sugar that recently affected factories who use it as an ingredient, the vice president underlined that it is currently not a problem.
“Yes, that problem used to exist but not anymore; now it is available to us. For the future, we are also developing a way that will solve issues that come with the shortage of sugar, although I can’t reveal what they are at this moment,” Frezer told Capital.
The factory currently has the capacity of producing 24,000 bottles per hour and the next step, Frezer says, is to get another machine that will increase the capacity to 36,000 bottles per hour.
Djibouti now competing with giants as a ship to fuel location
Red Sea Bunkering (RSB), a Djibouti based ship to ship fuel bunkering service company formed by Djibouti Ports and Free Zones Authority (DPFZA) and UCIG, stated that it has expanded its business in the region.
The company that was formed as an exclusive fuel operator throughout Djibouti and territorial waters of Djibouti has been one of the companies promoting its business at the recent international trade fair and regional integration forum organized by Chamber of Commerce of Djibouti.
Officials of the company told Capital that 65 percent of the shipping activity in the world passes via the corridor in Djibouti.
The company is formed with the aim of ship fuel delivery. We own the ship and the fueling operation offshore. “In the last two years we already filled 600 main international ships that did not plan to come to Djibouti but on their route to the sea,” the officials said.
DPFZA has the major share of RSB with 55 percent ownership and the balance is for UCIG.
“The company is a unique, nobody has made this before. We invest in our ships and the ship which delivers the fuel belongs to the company’s ownership,” Abdi Ismail, Deputy General Manager of RSB told Capital.
The company is supplying fuel for vessels of Ethiopian Shipping and Logistics Services Enterprise.
Previously, Ethiopian vessels were getting the heavy fuel from the Gulf. They were only getting diesel in Djibouti because heavy fuel was not available here.
“We have been in Addis Ababa and met the management of the enterprise to explain about the company and now we are providing the heavy fuel on their way to the gulf,” Abdi explained.
The current annual turnover is about USD 90 million, while it is very young. The company is currently is supplying fuel for huge international shopping companies.
The offshore bunkering services will be available at both inner and outer anchorages.
Djibouti is strategically located near the world’s busiest shipping lines, controlling access to the Red Sea and Indian Ocean. Apart from being a major bunkering and trans shipment centre in the region, it is also a burgeoning commercial and trade hub.
The new company has helped Djibouti compete with prominent fuel providers of Jeddah and Salalah.
