European Union Business Forum Ethiopia

The EU Business Forum in Ethiopia aims to facilitate operations for EU companies doing business in Ethiopia.
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      On April 6, 2022 EUBFE launched its maiden...
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As part of its strategic goal of supporting its advocacy engagement...
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EUBFE took part in security briefing in connection with the national...
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EUBFE delegation held meeting with the Minister of Finance- HE Ahmed...

EUBFE Launched Its Maiden Business Climate Report and Signed MoU with Ministry of Finance

Cover PageIMG 20220407 145953 408Nahom F. Abraham-EUBFE Executive Director
 
 
 

On April 6, 2022 EUBFE launched its maiden “Business Climate Report-2021” in the presence of high-level officials including H.E. State Minister of Finance H.E. Mrs. Semereta Sewasew, H.E.Mrs. Lelise Neme-EIC commissioner, H.E. Ambassador Roland Kobia-EU Ambassador to Ethiopia and H.E. Kassahun Gofe, State Minister of the Ministry of Trade and Regional Integration. 

 

The report was developed in response to the need to bolster public-private dialogue between the FDI community and the public sector with evidence-based input that would, in turn foster constructive and sustainable partnership. The report's findings will be used as the foundation for further analyses and studies that will inform ensuing PPDs between the FDI community and the government. Preparation to this end has been completed, with relevant resources already mobilized. The EUBFE business climate report is based on a survey of more than 80 European businesses with operations in Ethiopia, conducted in mid-2021. It was commissioned and managed by EUBFE, and supported by the two bilateral member associations; the French Business Association in Ethiopia (CAFE) and Ethiopia-Netherlands Business Association (ENLBA).

The report provides an up-to-date assessment of the Ethiopian business environment and investment climate by the international business community, with clear evidence on what the active international business community think about their Ethiopian investments as of mid-2021, and how they view prospects for future investment. The cooperation of government ministries and agencies was commendable throughout the study, with pertinent data extended to the experts in a timely fashion. The key challenges identified were in the areas of tax, customs, delay in the renewal of licenses, access to foreign exchange, unpredictability of the business climate. With the support of the EU, further studies and analyses will be made on these findings to develop clear policy recommendations. 

 

A Memorandum of Understanding (MOU) between the Ministry of Finance and EUBFE (including its member associations CAFE, and ENLBA) was also signed during the launch ceremony. The MoU will pave the way for a structured dialogue between the European FDI community and the ministry. Mrs. Semerata Sewasew signed the MoU on behalf of the Ministry of Finance. 

 

A panel discussion was held following the MoU signing ceremony, ENLBA and CAFÉ presidents as well as the EU Ambassador and EIC deputy commissioner-Ato Temesgen Tilahun, exchanged views on the finding of the report and related issues on ways of improving the business climate. The evening concluded with a cocktail reception an informal networking session. 

 
You my access the full content of the report via the link below.

Cover Page

 

 

 

On April 6, 2022 EUBFE launched its maiden “Business Climate Report-2021” in the presence of high-level officials including H.E. State Minister of Finance H.E. Mrs. Semereta Sewasew, H.E.Mrs. Lelise Neme-EIC commissioner, H.E. Ambassador Roland Kobia-EU Ambassador to Ethiopia and H.E. Kassahun Gofe, State Minister of the Ministry of Trade and Regional Integration. 

The report was developed in response to the need to bolster public-private dialogue between the FDI community and the public sector with evidence-based input that would, in turn foster constructive and sustainable partnership. The report's findings will be used as the foundation for further analyses and studies that will inform ensuing PPDs between the FDI community and the government. Preparation to this end has been completed, with relevant resources already mobilized. The EUBFE business climate report is based on a survey of more than 80 European businesses with operations in Ethiopia, conducted in mid-2021. It was commissioned and managed by EUBFE, and supported by the two bilateral member associations; the French Business Association in Ethiopia (CAFE) and Ethiopia-Netherlands Business Association (ENLBA).

The report provides an up-to-date assessment of the Ethiopian business environment and investment climate by the international business community, with clear evidence on what the active international business community think about their Ethiopian investments as of mid-2021, and how they view prospects for future investment. The cooperation of government ministries and agencies was commendable throughout the study, with pertinent data extended to the experts in a timely fashion. The key challenges identified were in the areas of tax, customs, delay in the renewal of licenses, access to foreign exchange, unpredictability of the business climate. With the support of the EU, further studies and analyses will be made on these findings to develop clear policy recommendations. 

A Memorandum of Understanding (MOU) between the Ministry of Finance and EUBFE (including its member associations CAFE, and ENLBA) was also signed during the launch ceremony. The MoU will pave the way for a structured dialogue between the European FDI community and the ministry. Mrs. Semerata Sewasew signed the MoU on behalf of the Ministry of Finance. 

A panel discussion was held following the MoU signing ceremony, ENLBA and CAFÉ presidents as well as the EU Ambassador and EIC deputy commissioner-Ato Temesgen Tilahun, exchanged views on the finding of the report and related issues on ways of improving the business climate. The evening concluded with a cocktail reception an informal networking session. 

 

You my access the full content of the report via the link below.

EUBFE Business Climate Report-2021

 

EUBFE Business Climate Study Report 2021 Validation Sessions Held

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As part of its strategic goal of supporting its advocacy engagement with empirical studies, the EUBFE commissioned its maiden business climate report in the middle of 2021. The draft report was presented to its members as well as government stakeholders on two separate sessions.

The validation session with member companies took place on the 21st of October in virtual setting. The consultants made a presentation of summary of the key findings, preceded by welcome and opening remarks from Nahom F. Abraham, the executive director of EUBFE, and Mr. Ben Depraetere, board chairman. Member companies who took part in the session provided key input into the report with suggestions and questions that would help in further enriching the report to reflect their perceptions and views.

The second validation session was held on November 02 2021, in the presence of key government ministries and commissions. Representatives of ministries of Finance, Trade, Revenues, Innovation and technology were in attendance. Moreover, the National Bank and the customs commission were also in attendance. The guest of honor at the session was the deputy commission of the Ethiopian Investment Commission, Mr. Temesgen Tilahun. He appreciated the efforts of EUBFE in it endeavor of working in tandem with the government in continuously improving the business climate. Ms. Sanne Willems, team leader at the EU Delegation in Ethiopia, also underscored the importance of public-private partnership and the EU’s readiness to support the country’s drive towards creating conducive environment of the private sector in general. The comments and suggestions garnered at the session, including those from the first session will be incorporated into the draft report. It is, tentatively planned that the report will be officially launched by early December 2021.

Joint Workshop between EUBFE and Ethiopian Customs Commission Delivered

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A joint workshop organized in collaboration with the Ethiopian Customs Commission was held on April 15, 2021 The basis of this workshop is the list of specific issues that were submitted by the EU Business Forum to the commission, following a mini survey disseminated amongst members. Some 40 logistics managers and staff members from EUBFE member companies took part. From the Customs Commission’s side, a number of directors including Mrs. Abeba Kiros- Director, Strategic Partnership Directorate, Ato Endashaw Temesgen -Director, Import goods procedure and support directorate as well as Mrs. Gennet Abreham - Director, Manufacturer and Export Trade Procedure and Support took the podium to lead the Q&A session.

The objectives of the workshop were
• to present the key systems that are instituted that would enable swift release of goods, within the 10/15 days deadline
• to discuss on the issues and challenges submitted by member companies, including but not limited to o repetitive inspections, rejection of transaction values, LC extension related challenges, duty free imports privilege rejection, lack of clarity on investment on logistics sector, missing HS codes on single window and consolidation of goods

Based on the queries raised by participants, the panelists as well as the other invited guests from ECC provided detailed explanation upon the return of participants from health break. The explanations were made by the panelists as well as Ato Habtamu Tilahun from Legal Directorate, Mr. Behailu Bedasso (lead valuation expert) from Valuation Directorate, Ato Sebsbie Fekade from ESW (team coordinator), Mr. Zewdu Tsehay from transit and warehouse directorate (lead expert) and Ato G/Egziabher G/Tsadik (deputy manager) from Kality Customs branch.

A summary of the responses is as below.

  • Price valuation is tolerated if it falls between 5-10% of ECVS. Regardless, the ECVS is being updated to reflect current prices and add new commodities; it is now at a pilot stage
  • Companies need to supply complete documents to enable ECC assessors make informed decision. In this regard, for ECC to be convinced of transaction value, sales contract needs to be submitted on top of LC and commercial invoices.
  • Price valuation remains a contentious area.
  • The first 4-6 digits of HS code are usually the same globally and the remaining will differ according to country context. Transiters should have the ability to navigate this.
  • The Ethiopian Single Window system (ESW) is currently serving the business community. Some 16 companies, mainly banks and insurance companies operate within this framework. Training is being provided to the business community on ESW on a continuous bases and based on needs experts will be happy to extend one to EUBFE members.
  • In situations where system failure happens in partner organizations, like Ministry of Agriculture, the ESW secretariat will be happy to intervene to support business in clearing their commodities on time.
  • The 10/15 days deadline kicks in on the day T-1 is validated. This means the day the shipment arrives in its designated warehouse, be it in Modjo, airport or even ECC certified duty-free warehouses.
  • Pre arrival clearance is indeed actively applied although some transiters do not seem to use this opportunity. However, it is one area that is targeted for improvement since it lacks harmonization across branches and does not meet international standard.
  • ECC is committed to developing the capacity of its staff. It also takes note that some of the challenges are rooted in absence of the right skills. ECC is open to partner with stakeholders including the private sector to this end.
  • The issue of expanding the privileges being an AEO to other government agencies has been tabled for consideration at the prime minister’s office. In this manner, law abiding companies will have significant benefits.

Joint Workshop between EUBFE and Ministry of Revenues Held

A joint workshop organized in collaboration with the Ministry of Revenues was held on January 29, 2021 at the BestWesten Plus Hotel in Addis Ababa. The workshop focused on Auditing, tax compliance and related issues. It attracted more than 40 finance managers, drawn from member European companies. 

This workshop falls within the memorandum of understanding signed between EUBFE and the ministry to bolster relationship between member companies and the ministry. A small survey was conducted at the end of 2020, that brought some problematic areas in the tax administration that gave rise to the design and the delivery of this workshop.

Hence, the major objectives of the workshop were

  • enable participants grasp the basics of risk-based audit
  • to equip participants on basic assumptions taken into consideration on frequency of audit
  • exchange experiences on audit work between European companies and auditors of MoR and identify areas that require better collaboration

The Ministry of Revenues was represented by five directors;

  1. Ato Kebede Lidetu- Director, Risk and Compliance
  2. Ato Birhanu Kebede-Director, Tax Audit Management
  3. Ato Sisay Gezu-Director Tax Fraud Investigation
  4. Wro. Abaynesh Abate- Directress, Tax Debt Management
  5. Ato Dereje Meonnen- Director Filing and Return Processing

All the directors made a brief presentation on the major tasks of their respective directorates and the challenges encountered in expediting their responsibilities. 

The discussion that ensued addressed concerns raised by participants in the areas of VAT fund delay, frequency of audit, withholding tax, capacity of auditors and related tax administration concerns.

Follow this link to download the full content of the workshop: https://eubfe.eu/images/Minutes-_Workshop_on_Audit_and_Tax_Compliance_29.01.21.pdf 

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