Trade Ministry Heads to Ease Hustles in Business Registration

Following the order from the Office of the Prime Minister, the Ministry of Trade (MoT) has slashed the number of business activities, which need a competence certificate as a prerequisite to obtain a business license by three-fold.

Close to 1,352 business activities were obligated to get a certificate of competence before obtaining a business license. However, the new procedure reduced the amount to 429. The order was passed with a letter signed by Assed Ziyad, state minister of Trade, and accorded to the two branches offices of business registration and licensing department under the Ministry on April 16, 2018.

It was mandatory for all the business activities that are related to environmental protection, public, animal and plant health to obtain a competence certificate, according to the amended business licensing and registration proclamation issued in 2016. However, an assessment conducted by the ministry revealed that businesses which do not have an effect on the environment, public, animal, and plant health were included in the list, Assed’s letter explains.

“This led the business community to be subjected to bureaucratic bottlenecks and become victims of good governance problems,” adds the letter.

The MoT is mandated to identify business categories that require a certificate of competence. It coordinates formulation of criteria and issuance of the certificate to those business categories that fall under its jurisdiction. Close to 37 public institutions are delegated by the Ministry to issue a certificate of competence.

The order for the amendment was given in September 2017 by the former Prime Minister Hailemariam Desalgn. Since then the Ministry has been identifying the businesses which do not need the certificates, according to Hagos Aregay, team leader of pre-licensing and verification at the Ministry, which started a sector based certificate of competence issuance in 2011.

“Before excluding the 923 business activities from the list, we receive feedback and comments from the delegated institutions,” he told Fortune.

In the new procedure, the Ministry has delegated the regional trade bureaus to issue the certificates after the federal institutions formulated criteria and requirements for the certification process. It also branched out the registration and licensing department by opening an additional office in the Lideta District along with the operational office inside its premises.

“Except for the agencies that do not have a regional structure such as the Ethiopian Energy Agency, issuance of certificates were given to regional bureaus and offices,” Hagos said.

The new procedure also reduced the number of business categories under sector institutions. The Ministry of Construction (MoC) was entitled to issue certificates for 38 businesses, but it went down to 18. And the 57 business activities certified by the Ministry of Environment, Forest & Climate Change were squeezed to 30.

A legal director at one of the sector institutions applauds the move, stating that there were many businesses which do not need to get certificates. However, he solicited the lateness of the decision.

“Since the amendment of the proclamation, many institutions have been formulating criterias,” he said. “However, the new change discarded all the directives issued from the certification process.”

Just a month and a half ago the cabinet of the Ministry of Construction (MoC) has approved the criteria prepared for the issuance of a certificate of competence for seven businesses.

For Eyob Balcha, an economist and former manager of the Public Private Consultative Forum and a current director of an American Investment Firm, Schulze Global Investments Limited, the move is incremental as it would solve the bureaucratic bottlenecks.

“However, the system still needs a complete overhaul,” Eyob commented. “For instance, a certificate should not be mandatory for exportable items as it is up to the interest of the purchaser.”


Published on Apr 28,2018 [ Vol 18 ,No 939]



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