The Ministry of Trade & Industry is launching the new online system, which purports to reduce the days the former procedure took from 32 to six.
Businesses can soon apply for new licenses and renewal online when the Online Trade Registration & Licensing Service (OTRLS) becomes operational in a few days.
The Ministry of Trade & Industry is launching the new online system, which purports to reduce the days the former procedure took from 32 to six. The system is also expected to reduce the number of people who physically visit the Ministry for new business licenses and renew old ones.
By logging into the virtual system, clients can obtain information on the requirements for renewing and issuing a particular type of business license from anywhere in the country and beyond. Once logged in, an individual can fill out the appropriate forms, attach scanned copies of supporting documents such as a Tax Identification Number (TIN) and process their license.
The system, initially installed in 2012 by local firm Custor Computing for one million Birr, did not originally provide online access to clients. Businesses had to be present at the Ministry to process their documents physically.
To upgrade the system, the Ministry floated a tender in 2018, and Custor Computing Plc won the bid for eight million Birr, which was covered by the Ministry. Custor was established in 1993 and provides web-based public service delivery solutions, system development, infrastructure design consulting and IBM enterprise solutions.
Development of the system took one year to finalise.
Under the current updated system, businesses can apply online for registration and license renewal, and they do not have to visit the premises of the Ministry and the regional trade bureaus to pick up the hard copies of their permits.
"Anyone can print the hard copy of their permits from the system," said Eshete Asfaw, state minister for Trade & Industry. "The upgraded system will save customers time, money and energy, and it relieves the workload of our staff compared to the old manual system."
The procedures, which businesses were passing through to secure a business license, are also reduced from 11 requirements to five. The reform was made as part of the latest initiative from the Office of the Prime Minister to ease the requirements of doing business in the country. Ethiopia ranked 159th out of 190 nations in the World Bank's 2019 Ease of Doing Business report. Though far behind many other African nations, this was an improvement of two positions from the previous year.
The mandatory requirement to obtain a business license, which includes newspaper publication of trade names and a lease or rental agreement, was also lifted by the Ministry a few months ago.
The online registration system has 19 different services. The services are provided through 1,063 offices, out of which 163 are already operational throughout the country.
The system also integrates the Ministry of Revenues, the Document Authentication & Registration Agency and the Ethiopian Investment Commission to shorten the customer journey when processing licenses, according to Eshete.
The Commercial Registration & Business Licensing Proclamation was amended in 2016, adding a new feature to the business sphere of the country. It introduced the concepts of the franchise and holding company arrangements, new to the business environment in Ethiopia.
Bekalu Tadele, an IT expert and lecturer at Haramaya University, believes that such service is essential to the business community, especially to people who live in rural areas.
But he has reservations about internet connection, security and knowledge of information technology.
"I appreciate the initiative, because it saves time, transportation cost and effort," he said. "However, I have doubts about its security and the provision of internet connection."
Bekalu also recommends other governmental and non-governmental institutions provide these kinds of services, though he says they should be prepared in cases where the internet connection collapses.