The Reporter (Addis Ababa)

Ethiopia: Chamber Then, Chamber Now

Interesting fact: the chamber system in Ethiopia which dates back to the imperial era might well be one of the oldest of such institutions in the continent. Born out of the a charter 90/47 issued in the 1947 by the imperial regime, currently the chamber is among the most seasoned institutions in the country.

However, its actual existence, according to historical accounts, dates further back to 1943 where an association of local business enterprises played an important role in alleviating a commodity shortage right after the end of the five-year Italian invasion of the country. Some of these accounts claim that, it was courtesy of the role that the business community played in the crisis that compelled the imperial regime to enact the said charter to give the chamber a legal personality.

Emperor Haile-Selassie's appreciation went as far as giving the new born chamber a plot of land where its seven-storey building is sitting at the moment. The same historical records indicate that the completion of its headquarters and the publication of trade directories and bulletins bear testimony to the rise of the chamber in the 1960s and 70s.

Like every story, early success story of the chamber came to an end following the 1974 regime change and Ethiopia's newly adopted command economy system. The proclamation that replaced the 1947 charter made membership mandatory for every private enterprise while at same time the government confiscating virtually its only source of revenue, the headquarter building. In spite of expanded membership, due to the mandatory requirement of the proclamation, the chamber largely became incapacitated to execute its primary objective of advocating for its members. To some extent, few members also claim that the operation of the chamber during those days was not that different from a government institution.

The fall of the Derg as well was another milestone in the chamber's 70 years existence. With the lifting of the mandatory membership requirements, the chamber was allowed to revive and go about its work. But still, bureaucratic red tape challenged the operation of the chamber for long, after the demise of the Derg. In fact, it was a decade later that a proclamation was issued to lay down the rules for chamber in Ethiopia.

The 2003 proclamation saw the re-establishment of both city and national chambers with the incorporation of sectoral associations to the chamber system at all levels. Both the Addis Ababa and national chambers have themselves re-organized pursuant to the new proclamation in 2005. In all fairness, especially after the re-organization of the chambers, controversy either between city, regional or national chambers became a distinctive feature of the Ethiopian chamber system.

Mainly the arch rivalry between the Addis Ababa and Ethiopian chambers of commerce and the controversies within animated the recent chamber scene. The two quarreled almost about everything. Oddly, the very history of the chamber system in Ethiopia is one source of squabble between the city and national chamber. As far as the metropolitan chamber is concerned, it and it alone was the beginning of the whole chamber history in Ethiopia.

The Addis Ababa Business Operators (AABO), a body that was first established by the 1947 charter, is equally claimed by the Addis Ababa and Ethiopia chambers to be an ascendant of theirs. Since it [AABO] was an organization that was formed by the business community in the capital city, city chamber proclaim ownership of this history. Meanwhile, the national chamber on its part insists that the then AABO is what later came to be known the Ethiopian Chamber of Commerce. In those days, signifying the presence of a number of foreign firms and businesses owned by foreigners in the capital, the president of the chamber from 1961-62 was a businessman by the name M. Weerts.

However, more contentious than the history of the chambers is ownership of the headquarter building, and the revenue generated from it. The 65-year-old building has seen a lot of wrangling between the two chambers since it was returned to them. Sadly, rent income from this building in addition to serving as an office facility to both chambers and the newly formed national sectoral association is a primary source of revenue for the national chamber. And severe bickering over the headquarter building is really a question of existence; more so for the national chamber than the city.

However, It is quite obvious that the Addis Ababa chamber with its well established relationship with the donor community is at a relatively better financial position than the national organization. As a result, a serious of overlap between the two chambers in terms of their respective jurisdiction to undertake projects also constituted another part of the problem. Both based in the capital city, the two chambers ran into one another a couple of times. Especially issues of jurisdiction to undertake specific projects or programs in the Addis Ababa have come out as a serious problem in the past. If not for executing development projects, the national chamber has challenged the city chamber about its lack of mandate to negotiate and secure donor assistance for its activities.

Recently, things seems to be taking turn to the worst in the chamber system. And last weeks' Broad and Presidential election of the city chamber saw a new trend emerging in the chamber system. The election process which saw Elias Genete ascend to the presidency was plagued by controversies form the very start. Teshome Beyene, former secretary general, was not accepted to stand for election which later exploded into an all out controversy. In coming president seems to have recognized the problem.

"We have to narrow the differences and address the controversies surrounding the chamber at this time," he told The Reporter. And he vowed to make the issue first order of business when he takes office. "I need to make election process as clear as possible to mend relationships and install trust among the business community," he admitted. Nonetheless, there are some who argue that it has not been bad all along. They say that the chamber had its days where it posed serious challenges to the policymakers advancing the interest of its private sector members. In this regard, businessmen who came to the chamber system during the second half of 1990s were few worthy of mention, they say.

In fact, this was the first batch of business leaders who came forward voluntarily to lead; and with them came the culture of campaigning. In a way people who were actually motivated enough to work and bring about some changes in the chamber started to dominate the scene, they recall. Among them was the likes of Kebour Genna, Berhane Mewa and Eyesuswork Zafu. For instance, Kebour was the first to openly campaign for the presidency of the city chamber and won. He remembers how he went to Mercato to lobby members of the business community to elect him.

Structural changes such as the installment of periodical business luncheon programs and what was called a chamber forum were two such platforms that was initiated back then and are still continuing today. These were the very forums where the business community invites professionals to get explanation regarding problems that the business community faces in the country. This in turn gave the business community a strong understanding of the policies and bottlenecks for doing business in Ethiopia when they meet government officials for discussion.

In fact, may are convinced that the types of questions that the private sector posed to the government officials were much more stronger back then. Research outcomes discussed during either the business luncheon or the chamber forum also served as good inputs for the policymakers of the country. Hence, various consultations with the pertinent government bodies also helped to resolve many issue which has a stifling effect on the business community.

This trend was kept by leaders who came after Kebour, inventor of the city chamber slogan "yichalal" meaning "it is possible". A very lively discussion with government officials and a series of challenges that was coming from the business community is also claimed to be one of the factors which gave rise to the later institutionalized Public Private Dialogue Forum. The importance of every chamber or a private sector association is measured by how much it advocated and solved problems of its constituent businesses, a legal expert comments.

For national chambers, the extent to which it voices concern of the private sector as whole and the influences it has on the final legislation is how one can appraise its work. Of course, other chamber services like promoting a country's export products via trade fares are also important, legal expert says, but these can be performed by other entities even without the existence of the chamber. "The main objective of the existence of a chamber is giving solution to problems of the business community," he explains. Kebour seem to be even more radical in his idea. He says that if the chamber system can not offer an immediate solution to the problems of the business community in consultation with the government, then there is no need for its existence.

"All purported services offered by the chamber can be offered by any private sector player; rather more efficiently, if you like," Kebour told The Reporter. As far as chamber's current status is concerned, both agree that it could not be claimed that it is giving solution to the business community. And that is why the expansion of membership has been quite sluggish in recent years, they argue. Kebour is of the view that the business community is in fact pulling away from the chambers. And this is due to the recognition that the system is no more powerful to effect change in the Ethiopian business environment. From a different perspective, the success of the chambers also hinges on the external environment. According to the two professionals, the developmental state ideology of the government which the incumbent is pursuing since mid 2000s has highly impacted the activities of the chamber.

Kebour says that current leadership seem to have forgotten to take into account what the developmental direction is. It is a direction where the private sector is no more the leader of the economy; rather a follower, he continues to elaborate. Although it is still a free market economy system, the private sector has to understand that it should go with the strategy put in place by the government, whether it is right or wrong. Hence, the chamber should be flexible in its structure, take into account the changes and maximize within the parameters set for them. "I think current chamber mind set is from a system where the private sector was more or less a driving force in the economy, nevertheless, I do not think that the chamber has given thought to this," he expanded. And he is also reject the idea that the current chamber can not be compared to his time or any of its predecessors since the condition are diametrically different between the two time tables.

"When talking of the way forward, the chamber should think of the ways to proceed with the government set framework," he concludes. Today, the chamber system is famous for other reasons than advocating interest of the business community. A fierce in-fighting and wrangling not necessary between two independent chambers but even within the same organization. And the main showdown appears to come and pass around election times indicating power struggle. It is the belief of the professionals and commentators that things needs to change fundamentally; and they need to do it now. Ed.'s Note: Asrat Seyoum has contributed to this story.

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