22 July 2012

Ethiopia: Parliament Passes New Investment Proclamation

Parliament approved the new investment proclamation, last week, which aims to give one-stop-shop service for the manufacturing sector, while restructuring the Ethiopian Investment Agency (EIA).

The new law that repeals the 1992 investment law, which was amended about four times, was brought to the private sector for discussion during the past six months, while in its draft stage.

The new proclamation requires the Agency to give the major services, which the federal and regional executive organs have been giving, by delegation and to execute the different processes that the investor must go through in different executive organs on their behalf.

The services that the Agency will provide by delegation include issuance of construction permits, notary services, issuance of work permits to expatriate employees, and issuance of business licenses. Government organs, including the Ministry of Urban Development & Construction (MoUDC), Ethiopian Revenues & Customs Authority (ERCA), and Ministry of Trade (MoT) will delegate powers to the Agency.

Investors are also no longer to go to the different executive organs to process their requests, as the Agency has been made to handle all of the processes on behalf of the investor. Therefore, the investor is only required to indicate the services that are required on a form to be provided by the Agency, based on which the Agency will execute them.

These services include requests for land and loans, approval of environmental impact assessments, and requests for utilities, such as water, telecommunications, and electricity. In order to implement this, each investment project will have a responsible person from the Agency who will follow its execution, according to Getahun Negash.

In order to satisfy additional requirements and needs, the concerned executive organs, such as the Development Bank of Ethiopia (DBE) and the Environmental Protection Authority (EPA) are expected to establish an investment desk that will facilitate the investor's requests submitted by the Agency.

"There will also be no extra charge requested by the Agency for this, for now," Getahun, head of corporate communication, told Fortune. "But, there might be in the future."

The Agency is currently charging 600 Br when issuing new investment licenses and 400 Br for upgrading.

In order to implement such added responsibilities, the Agency will undergo a major restructuring to expand its human resources and facilities, according to Getahun.

The Industrial Zone Proclamation, which aspires to the formation of an independent authority called the Ethiopian Industrial Zone Authority (EIZA) and lays out how zones should operate, was also included in the new Investment Proclamation.

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