Commentaries | May 14,2022
Officials of the Ministry of Trade & Regional Integration (MTRI) plan to fully digitise business registration and licensing services beginning July this year, although the Ministry has provided online services since last year.
Although the Ministry has a digital platform dubbed ETRADE, it failed to have the impact officials had hoped, with only around 20,000 businesses using the platform thus far. The platform was developed by Custor Computing Plc, a company involved in the Ministry's previously launched digital back-office business registration system. It won the contract in 2019 to develop the platform for eight million Birr. Custor also installed an integrated revenue management system for the Document Authentications & Registration Agency (DARA) and the E-tax system for the Addis Abeba Revenues Bureau.
The platform is part of a digitalisation initiative introduced by the administration of Prime Minister Abiy Ahmed (PhD).
In 2020, it took an average of 32 days to complete the registration and licensing of a business in Ethiopia, which placed it 159th among 190 countries in the World Bank's Ease of Doing Business rankings for last year. Officials expected the digital platform to reduce the number of days required for business registration and licensing. Last year, the Ministry reduced the number of business categories required to present certificates of competency from various regulatory bodies to acquire a trade license. Previously, the requirements applied to 52 various lines of business, but that number has been lowered to nine.
“The Ministry is doing its job in easing the process for registration and licensing,” said Amele Mune, director of trade registration and licensing at the Trade Ministry.
Several federal agencies, such as the Information Network Security Agency (INSA) and the Ministry of Innovation & Technology (MIT), which initiated the national trade registration system, play a role in system facilitation and security provision.
Despite reductions in requirements for acquiring or renewing a trade license, the process remains drawn-out and bureaucratic. Among the requirements eschewed by the Trade Ministry are those compelling businesses to present office lease agreements. However, they are forced to present the agreements to receive a taxpayer identification number (TIN) from the Ministry of Revenues.
“One of the benefits of taking license registration services online is to make it easy for businesses to renew their licenses,” said Amele.
Close to one million renewed their trade licenses last year. The remaining 1.5 million or so are inactive or failed to renew.
Businesses are charged 102 Br in fee to renew a trade license, with the window lasting from the beginning of the financial year to December. Businesses and traders who fail to renew in time face penalties of 1,000 Br with 1,500 Br added every month. License alterations cost 82 Br, while the Ministry charges disclosure on registered businesses a 57 Br fee.
Officials say the rates will remain the same when the services go online, with the disclosure fee to be waived entirely.
Low computer literacy has pushed the Ministry officials to begin engaging with IT centres, often called internet cafes, to assist business owners in accessing and using the platform. As part of a pilot programme, the owners of around 30 internet cafes attended training provided by the Ministry last December. According to Amele, they were chosen based on their previous experiences with the Federal Documents Authentication & Registration Agency (DARA).
“Technology literacy among business owners is so low that we have to prepare third-party providers to assist,” she said.
The Ministry plans to provide training to thousands more before the platform becomes mandatory, Amele disclosed. Her office plans to engage all internet cafes in Addis Abeba.
Among the 30 internet cafes that took part in the training is one run by Azeb Adane. The IT centre is located in the Semien Hotel area, near a branch of DARA.
Azeb has provided secretarial services at the cafe for the past three years. When DARA took its services online last year, she began to process paperwork for those visiting the branch. However, despite posting an announcement on her cafe door that she would provide similar services for the Trade Ministry's ETRADE platform, she has not received many clients. Only five have asked for help in license renewals.
“I’m sure I'll get many clients when they make it mandatory,” she said.
Azeb charges her clients service fees for scanning, internet, and printing when licenses are processed. The Ministry has also been engaged in providing training to officials at regional trade bureaus, according to Amele.
IT experts like Social Beyene, general manager of DAFTech Social ICT Solution Plc, praise the government’s decision to go digital. He observed the move would most benefit the businesses themselves, saving them time, money, and effort. He acknowledges that inadequate computer literacy levels will present a challenge but believes the efforts are well worth it.
"Businesses must adapt for their own sake," he said.
Social points out the move would also be an incentive for internet cafes, which saw business decline with the proliferation of internet connectivity and smartphones.
PUBLISHED ON Mar 26,2022 [ VOL 22 , NO 1143]
Commentaries | May 14,2022
Radar | Jan 03,2021
Radar | Jun 11,2022
Radar | Feb 02,2019
Fortune News | Sep 10,2021
Fortune News | Mar 30,2019
Radar | Mar 06,2021
Fortune News | Jun 11,2022
Radar | Mar 13,2021
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