Tensions eased between Ethiopia's two major chambers of commerce
Addis Ababa — Tensions have eased between Ethiopia’s two major chambers of commerce over the management of a private sector development project.
In 2005, the Addis Ababa Chamber of Commerce and Sectoral Association (AACCSA) signed an agreement on behalf of the Ethiopian business community with the Swedish Agency for International Development Cooperation (SIDA) to handle the Private Sector Development (PSD) Hub programme.
This deal came at the exclusion of the Ethiopian Chamber of Commerce and Sectoral Association (ECCSA), who, as the national chamber of commerce, was the obvious candidate to partner SIDA.
At the signing three years ago, the President of AACCSA, Eyesus Work Zafu, argued that although it is true that the PSD Hub was supposed to be run by the national chamber, it was too incompetent and disorganised to handle it.
He explained that although AACCSA is part of the national chamber, it has the capacity to handle the initiative and was very active in working closely with the private sector.
At the time, Getachew Ayenew, the president of ECCSA, admitted that the national chamber did not have the capability to administer the PSD Hub, but subsequently argued, three years on, that the national chamber is now in a position to handle the multi million dollar programme for the remaining two years.
After a year long dispute between the two chambers, they agreed through six selected arbitrators to administering the initiative equally and will sign a memorandum of understanding in the forthcoming weeks.
As a result of settling the dispute, the two chambers organised the 4th National Private Sector Development Conference last Tuesday at the Hilton Hotel. The theme of the conference was: ‘Competitiveness of the Ethiopian Private Sector: New challenges, new response’
At the event, Ahmed Tusa, State Minister at the Ministry of Trade and Industry, said that the relative competitiveness of the private sector in Ethiopia requires further improvement in order to effectively compete in the export market in a sustainable manner. The agricultural sector, as it has been for centuries, is characterised by subsistence farming employing traditional means. Consequently, improving the productivity of the sector remains a challenge.
The industry sector is also at an early stage and is dominated by manufacturing of primary goods. Therefore, the same problems of low productivity and poor quality characterise it.
He recommended that both the Government and the private sector identify the challenges for the development of the sector. Among these are likely to be Ethiopia’s planned accession to the WTO and the current economic crisis.
What is the PSD Hub?
• PSD Hub Programme has an objective to contribute to the economic development of Ethiopia by improving the entrepreneurial environment and strengthening the private sector.
• For the last three years, AACCSA has achieved the first phases of PSD Hub, such as company registration, accounting and auditing, finalisation of the commercial code of revision, competition and trade proclamation practices, corporate governance, and institutionalisation of WTO practices in the chamber system.
• The second phase will probably be handled by the two chambers working in the area of consolidating and transformation. This mean sectoral diversity and the size of the private sector are consolidated. The plan is for the private sector to transform itself in terms of business conduct and growth and expansion in the domestic market and beyond. The final phase is steady growth and economic leadership.
• It envisions that a vibrant private sector will emerge that can compete in the domestic and foreign market. The plan is for more big companies that subcontract medium and small companies and work closely with multinational companies.
- By Addis Mulugeta | Capital Ethiopia
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