No other word but chaos can
adequately describe the scene inside the ground
floor of the Ministry of Trade (MoT) on Marshal Tito
Road. Indeed, last week was when businesses thought
that the season to renew their licenses was coming
to an end; thus the not-surprising hustle and bustle
by business owners and their liaisons to push things
along and push the bureaucracy harder to make it
before the deadline on January 9, 2012.
Many of them were greeted with
crammed rooms with no air-conditioning for
ventilation of the thick air that pushed people back
right from the gate. The mobile ACs put at the far
ends of the room were not functional, as the few
ventilation equipment lay about on the floor.
Customers did not want to expose themselves to
“cold”, according to staff members. The air was
filled with the steaming breath and sweat of so many
exhausted people waiting in the unmanageably long
line. Some stood on the sidelines. Others were sat
on a number of couches alongside the windows. Still
others tried to stretch their necks over others
heads in a bid to get the attention of the staff of
the Ministry processing the license renewals.
Customers holding documents and
waiting desperately to renew their licences got into
constant fights with the front desk employees who
are expected by the Ministry to clear an average of
30 files a day.
It was as if no one knew what was
going on. Neither was there anyone responsible to
advise businesspeople where to go to start the
process. The environment was simply devoid of order,
coordination or any sense of a system.
Zemichael Berhe, an exporter of
cereals to Sudan, was one of the many queuing to
renew their licenses. He came from his home town,
Metema, 897km north of Addis Abeba, where he has
been engaged in the business for the last 1o years.
He has been going to the Ministry daily since
October 7, 2011 in desperate search for his lost
Long gone are the days when
businessmen like Zemichael would take no more than
two days to renew their licenses. He was not able to
renew his license despite being at the MoT for five
days because his file was not found. The hustle and
bustle he experienced was a first for him, even
though he had gone to the Ministry many times over
the last decade when the office was still
“It only took me two days to renew
my license last year before they changed their
working procedures,” he told Fortune in frustration.
Tension was not the only thing in
the air in the room. There were also the clerks who
were manning the six customer service windows. Some
were impatient, impolite and dismissive; others were
outright rude. It was clear that the registry
department at the Ministry and its staff members
were near hysteria, unable to manage what appeared
to be a process out of control. Few of them tried to
accommodating and tolerant, carrying the burden of
handling the altered environment to which they
appeared to be little prepared for.
Indeed, the ministry changed its
working procedure by introducing an International
Standard Industrial Classification (ISIC) and
creating the Ethiopian Standard Industrial
“Customers do not understand what
has changed here,” a frantic staff behind one of the
windows, told Fortune.
Several other changes have occurred
at the Ministry over the past two years.
It all began with change at the helm
of the leadership, with Girma Birru, former minister
of Trade and Industry going to serve as Ethiopia’s
special envoy to the United States. The new leaders,
in their ambition to discipline what they considered
a rogue private sector, decided to initiate the
re-registration of businesses at the end of the last
Ethiopian fiscal year. The entire business registry
department was deployed to undertake this
politically significant task.
When they turned their attention
back to their regular jobs, there were already huge
numbers of files piling up. It seemed the whole
process of re-registrations carried out a few months
earlier had no use. The Ministry had acquired a new
system from a private company, Custer Computing Plc
headquartered at Sahlesellasie Building, Ninth
Floor, on Ras Mekonnen Street, that overrode the
previous process and now required businesses to
“All I have gone through a few
months back to get registered again has no use,”
said a private company manager, who claimed he has
been there for the past two weeks, visiting the
department almost every day.
Custor, which was hired by the
Ministry of Communication & Information Technology (MoCIT),
developed and installed the system software three
months ago. However, hardly any of the staff at the
Ministry were properly trained and few knew how to
operate the Online Trade Registration & Licensing
“We were trained for only three
days,” said one registry staff.
However Teshome Kassa, business
development team leader at Custor stated that the
front desk employees were trained for a total of
five days while the IT staff was trained for three.
Though accessed from anywhere and
fully automating all functions of registration and
licensing, operating the new software remains a
challenge for employees new to the system.
One staff at the front desk was
struggling to open a page that was stuck. Few
minutes later she had to call the Ministry’s IT
people for help. The solution of the staff in his
mid 20s was to restart the system to see whether the
page would resume the data entry. His trainers from
the company were no longer there in the afternoon,
for they usually come in the morning, according to a
It was apparent that the front desk
employee’s were ill-prepared to handle the influx of
people. This has been aggravated by the push by the
Ministry to have businesses renew their licences
before the actual deadline of January 9, 2012, after
which penalties will be levied for renewals.
Part of the problem affecting the
new system is the classification of businesses under
the new re-registration scheme that covers all
economic and social sector activities while grouping
similar business activities together. It was enacted
through a new Commercial Registration & Business
Licensing Proclamation passed in February 2011 and
applied to all businesses.
However, its aim of facilitating the
better functioning of trade while increasing
stability, effectiveness and fair trade practice has
put new demands on traders to fulfill; thereby
contributing to the longer queue at the ministry.
Those who have come for a new
license or to renew their old license are required
to obtain a tax identification number (TIN), support
the capital they claim to have with a bank statement
and provide a permanent address for their business.
Formerly, people simply declared their capital and
got general licenses for “import” and “export”.
Only nine employees are tasked with
making sure these requirements are met and handling
customers who come in droves. The requirement that
each process 30 files on average a day and the
haphazard situation of the office is no doubt the
source of their frustration, making them lash out at
Adding to the problem is the
extended processing time for a customer that results
from the re-registration scheme. A businessman
engaged in imports for instance is required to have
a license for each item he imports.
This system has increased the time
of processing to issue a license, according to Kiber
Temesgen, trade registration and license permit
supervisor, who claims that employees at the front
desk work over 10 hours a day.
It is because of this unsystematic
process of issuing licenses and searching for files
that are not returned to their original place but
strewn all over the small file room that delays and
arguments with customers ensue.
“No one understands what we are
going through.” Kiber told Fortune in frustration.
“We are exhausted.”
But business people are concerned
with expediency and no amount of explanation seems
satisfactory from the demeanor of many at the
Ministry last week. Such is the explanation for
businesses who had been led by the Ministry to
believe that the deadline was on Thursday, November
10, 2011, for renewal without penalties. Many were
under the impression that they would not be able to
receive services at government institutions and
banks if they did not do so by that time.
Hence, the chaos at the Ministry
last week. Although the Ministry’s staff told
businesses that there was still time and told them
to return, many were reluctant to take their word.
“We pulled the deadline back while
there was time,” Kiber told Fortune. “Based on
previous experience we wanted to avoid the
The Ministry which won praise from
its customers, multilateral organizations and the
domestic media only few years ago for successfully
introducing business process reengineering (BPR)
seems to have lost its previous image.
Ethiopia is to rank 111 out of 183
in doing business according to the forecast of the
World Bank’s (WB) doing Business survey published a
few weeks ago. Although this ranking puts it better
than Sudan and Eretria, it is below neighbouring
This is worse than last year when
Ethiopia ranked 104th. The survey found out that it
takes nine days to set up a business, including
acquiring a license.
With the sole responsibility of
handling business set ups and renewals, this is
indeed bad news for the Ministry. However, it seems
changes are not over. The leadership is once again
changing hands with both the Minister and the State
Minister replaced last week.
Customer frustration is bound to
increase as the real deadline to renew licences
approaches. Perhaps indicative of this frustration
is the number of licences being returned compared to
previous years. Over the past six months, 606
licenses were returned to the Ministry while only 94
licenses were returned the previous year. These
numbers were 38 and 139 in 2008 and 2009,