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Tax, lack of finance, corruption smothering businesses

Members of the Addis Ababa Chamber of Commerce and Sectoral Associations (AACCSA) are frustrated with the organization’s failure to address the growing bottlenecks haunting the private sector.

Chamber leadership, including Secretary-General Sileshi Betemariam, faced tough questions during its general assembly at the Inter Luxury Hotel on December 21.

Sileshi and his management team presented their annual report during the assembly, which focused on the Chamber’s financial statements and activities. Its finances are relatively healthy, barring a 9.6 million Birr increment in salary and benefit package costs for employees.

However, when given the chance to address the assembly, AACCSA members voiced concerns that the meeting should instead focus on the Chamber’s foundational objectives rather than its financial performance.

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“The Chamber’s foundational objective is to represent the private sector and serve as a bridge between government and the private sector. The report does not mention any progress on this front,” said Adane, an AACCSA member.

He criticized the Chamber’s leadership for failing to address complaints from members and business leaders.

“The entire private sector is facing the same problems. The Chamber must represent the private sector diligently. It must fight for [a solution to] the problems facing the private sector,” he said.

Among the chief complaints is the proliferation of corruption across all levels of public institutions.

“Corruption has become the rule of thumb. The Chamber is not fighting this. It’s difficult to say there even is a Chamber,” he said.

Members decried what they see as unfair tax pressures on private businesses.

“The tax authorities are not fit for the 21st century business environment,” said Bekele Tsegaye, managing director of Bekas Chemicals Plc.

Financial challenges, such as access to credit and tight central bank regulations were also raised during the assembly.

Eyassu Dagnew, manager of Marvelous Ethiopia Tour Plc and AACCSA member, is among those who have been struggling with access to finance. He told The Reporter he has been complaining to the Chamber for years for a solution to the problems he encounters at commercial banks.

“There is no access to finance. Banks, including the central bank, are selectively choosing between businesses,” he said.

Others present at the assembly accused the Chamber of failing to challenge the government on controversial recently-introduced laws such as the property tax, ‘wall-and-roof tax’, taxation on dividends, and several other strains on the private sector.

The members warned the Chamber has had little to no say in the drafting of its own establishment proclamation, which is in the making by experts at the Ministry of Trade. The bill is expected to be ratified in the near future. It is long overdue, but Chamber members fear it will not incorporate the private sector’s interest.

The Chamber leadership was quick to ease the concerns.

“We are conducting studies and presenting them to the government,” said Mesenbet Shenkute, president of the AACCSA.

Management has received a plot of land from the Addis Ababa City Administration, where it plans to erect its headquarters. The Addis Ababa Chamber currently resides within facilities provided by the wider Ethiopian Chamber of Commerce and Sectoral Associations.

Land previously allotted to the AACCSA was reclaimed by the Administration, before the Chamber was granted a 3,000 square meter plot near the ICT Park on the capital’s outskirts, according to Mesenbet.

The Chamber is still conducting studies to determine the cost of the headquarters construction, which is estimated to be in the billions.

Chamber members have filed a request to take part in financing the headquarters via capital and shares. Mesenbet said the management would consider the feasibility of such an arrangement.

The Chamber has also secured the green light from the City Administration to co-develop the Addis Ababa Exhibition Center located adjacent to Meskel Square. The Center, which is the property of the Administration, had been under the management of the Chamber until recently.

“Now, we’re permitted to co-develop the Center and use it. This is a big step. Soon, we will upgrade the Center to international standard levels,” said Mesenbet.

Work on another large exhibition venue is underway in the capital at the Addis Africa Convention Center, near CMC Square. The Chamber holds a 10 million birr stake in the project, alongside the City Administration and other institutional investors.

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