Recap on June program “Doing Business in Ethiopia: The Challenges and Rewards”

AWiB’s June monthly seminar was a descriptive look at the main bodies in government directly related to investment, trade and taxes. Each bureau, as listed below, plays an essential part in one’s decision to invest in Ethiopia. Individually each institution provides support as well as encouragement to anyone aiming to start a business in Ethiopia, invest with foreign institutions and contribute to the country’s economical development.

Although the bureaucratic ordeals are many, the fruitful success of the end goal of investing in Ethiopia is well worth the struggle. One must understand first and foremost that Ethiopia being a developing country carries its own set of obstacles, as the country is aggressively rearranging its government bodies and private institutions to better suit the willing and able domestic and foreign business investor in all sectors. Of the many topics covered during the seminar, the most imperative point that all the invited speakers wanted to convey was just that. 

The invited speakers were:

(1) Ms. Fantu Farris Mulleta

Investment Law and Policy Advisor

Ethiopian Investment Commission (EIC)

World Bank – Private Sector Advisor

(2) Mr. Firew Mamo

Trade Minister

Advisor to the Minister

Ministry of Trade (MOT)

(3) Mr. Nebiyou Samuel

ERCA Director

Ethiopian Revenues and Customs Authority (ERCA)

(4) Mr. Girma Tafesse

ERCA Federal Domestic Tax Officer

Support & Follow-Up Director

Ethiopian Revenues and Customs Association (ERCA)

They each went through the list of services that each of their institutions provided, they talked about the current situation of various factors involving a trader/investor in Ethiopia. During the Q&A, many of the concerns raised from the audience included requirements with joint ventures, policy procedures mishandling with officers across the boarder, the element of fear instilled in citizens during tax payment periods, the issue of contraband items entering and skewing the market price of products and under invoicing, available incentives schemes, and the ongoing problem of corruption. 

In response, the speakers explained that one of their major message to the public was that, not only should the institutions be held responsible for their officers’ behavior and lack of adequate and appropriate service delivery but the public should also carry some of the responsibility and exert their rights as citizens by pointing out corruption, for instance, by using the newly established complaints’ office for any grievance and concern, and by sharing information as well.

All three institutions have created information centers that are readily available to the public with whatever information one seeks to find concerning working and investing in Ethiopia. The EIC stated that country is working tirelessly to attract foreign investors by creating many incentive schemes for different sectors. It is exploring different ways in which different sectors can function more efficiently and has even started a program to implement financing software. With the creation of different industrial parks, the EIC is continuing to create skill and technology transfer from abroad and in collaboration with the government has created expatriate salary payment schemes for example. 

MOT mentioned that one of their major struggles is maintaining customer service with all of their officials. Even with all the training and follow-up carried out, this still remains an issue and MOT is continually tackling the problem currently. It has aims to build an online system where all services can be carried out by the customer online, without the need of the office in the coming future. Utilizing benchmarking methods, the ERCA is always researching its taxation laws and regulations. With the participation and vote of the Ethiopian citizens, it has created a service delivery charter as well. It has also started an initiative called customs evaluation systems in its continuous struggle to control the issue of under invoicing and contraband. 

About the Institutions

The Ministry of Trade encourages domestic trade development by creating conducive conditions in support of export and import trade practices. The Ministry is involved in establishing foreign trade relations and negotiations including quality control measures of all goods, imported and exported. As stated by the Ministry, raising the efficiency and competitiveness of the trade sector, eradicating rent seeking activities, ensuring consumers’ rights, strengthening the transparency, fairness and accountability of legal framework of trade activities, promoting a competitive domestic trade and distribution system, establishing favorable environments for productive investors, and strengthening consumer’s cooperatives are all areas given priority to in the coming five years.

(Ministry of Trade, 2017)

The Ethiopian Investment Commission (EIC) is a government institution accountable to the country’s Investment Board, currently restricted to focus on attracting more FDIs and improving services to investors. The EIC promotes Ethiopia’s working conditions and job opportunities to foreign and domestic investors; it is directly involved in registering technology transfer agreements and export-oriented non-equity-based foreign enterprise collaborations with domestic investors. The Commission, under governmental approval, negotiates and signs protection treaties with other countries and bilateral investment promotions. It also sits as an advisory body to government policy makers ensuring the attractive investment climates for investors.

(The Ethiopian Investment Commission, 2017)

The Ethiopian Revenues and Customs Authority (ERCA) is the governmental body that assesses, collects and accounts for all revenues in addition to providing support to regional states in its aims to effectively maintain its regional and federal tax administration system. The ERCA has the power to implement tax exemptions incentives for investors while ensuring of their proper usage and participates in legal international agreements and contracts in regards to customs and tax administration. It collects and analyzes imported and exported goods’ information to assess and determine tax assignments accordingly and to control the standard of quality being traded.

(The Ethiopian Revenues and Customs Authority, 2017)

For more, you can go online to each institution’s website and get additional information on the services provided and their contact information for further in-depth understanding.

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