In an effort to streamline bureaucracy and see investment commitments evolve to fruition, the Oromia Investment Commission has completed its reengineering of the region’s business process.
 

Taking almost a year, the new guideline was approved by the executive branch of the regional state last month.
 

Under the new system, developers who are offered plots will be required to commit 10pc of the lease amount upon signing contracts. Although lower compared to the 20pc the Addis Abeba city government demands, this represents a sudden increase in investment charges by a regional government that previously asked for none.
 

The Oromia Regional State is the largest region in Ethiopia, covering 363,000sqm and divided into 14 zones and 197 districts. It is the second largest investment destination next to the capital.
 

It is also the place where investors are offered the cheapest leases: for example, a square meter plot in Kaliti industrial zone, just bordering the Oromia Regional State, costs between 45 and 51 Br, while developers can find land in Adama (Nazareth) industrial zone for between 3.72 Br and 7.53 Br. The numbers are according to an investment guide produced by UNCTAD and the International Chamber of Commerce, in 2004. The regional government started taking advances in the past two weeks.
 

The new directive is a result of frustration felt by authorities over the hundreds of developers who have taken plots (at no initial cost) and failed to start their projects.
 

“From experience, most investors who take land without paying an advance payment end up not being operational,” said Geremew Keno, Lease Implementation and Compensation Payment team leader with the Commission.
 

Last year, the regional government repossessed plots awarded to 116 companies in the floriculture, manufacturing and agricultural sector, claming that they defaulted on starting their projects within the six-month period agreed to. Officials at the Commission hope that the advance payment of 10pc of lease amount will deter developers from rushing into projects they may not be seriously committed to.
 

“The advance payment might make them go into the investment more quickly,” said Geremew.
 

In a another policy, the Commission has relaxed its requirement for a detailed project proposal from investors before issuing title deeds for plots. Developers are only required to fill a standard form available at the Commission, according to Geremew.
 

Those who have already invested seem positive about the new process. An investor in the Eastern Shoa Zone, involved in the agricultural sector, recalled that it used to take a minimum of five months for plots to transfer to developers.

“If they start to deal with everything in one place, then it will create a conducive environment for investment,” he told Fortune.