Ministry to Upgrade Online Business Registration System

The Ministry of Trade (MoT) is upgrading its online registration and licence renewal system with an estimated cost of 10 million Br.

The system enables businessmen to apply for a new trade name, business licences, and renew old ones virtually from anywhere in the country and beyond.

It also allows logging into the system to obtain information on the requirements for a particular type of business licence or renewal. The individual can then go on to fill out the appropriate forms and attach scanned copies of supporting documents such as Tax Identification Number (TIN) and other details.

To hire a company for the turnkey project, the Ministry announced a tender on December 23, 2017, on the state English daily The Ethiopian Herald through the Ethiopian Trading Business Corporation, with February 9, 2018, as the deadline to submit documents.

The bidders are required to attach a 100,000 Br bank guarantee through a certified payment order (CPO), which is usually one or two percent of the total project cost.

Its aim is to upgrade the system installed by Custor Computing Plc at a total cost of one million Birr facilitating applications for new business licences or to renew permits without requiring presence at the premises of the Ministry or regional trade bureaus.

Custor was established in 1993 and has been providing localised web-based public service delivery solutions, system development and infrastructure design consulting and IBM enterprise solutions. It deployed the OTRLS programme in 2012.

Although businesses can apply online for registration and licence renewal,  they have to visit the premises of the Ministry and the regional trade bureaus in person just to pick the hard copies of the permits.

“The upgrade was necessary as the business registration and licensing proclamation was amended soon after the first system was installed,” said Wondimu Filate, Public Relations director at the Ministry.

The Commercial Registration and Business Licensing proclamation was amended in 2016 adding new features to the business spheres of the country. It acknowledged the concepts of the franchise and holding company arrangements, new to the business environment of Ethiopia.

Business registration in Ethiopia has been labelled as sluggish and complicated by different international finance organisations.

The World Bank (WB), in its report ‘The Costs of Business Registration & Licensing in Ethiopia and Options for Reform’ published in March 2016, states that the business registration process of the country has bottlenecks due to redundant procedures, documentation and lack of coordination among different institutions involved in the process, and decentralisation of licensing offices.

An integrated online system could be the best way to put the country in a better position in its business registration and licensing process and doing business index ratings.

The total cost businesses in Ethiopia face as a result of complying with the registration and licensing regulations is estimated at 3.46 billion Br or 0.47pc of the gross domestic product (GDP). And more than 95pc of the costs for businesses are incurred due to, amongst other requirements, cumbersome and time-consuming documentation procedures, according to the WB.

“The upgrade will also add new features, such as integrating stakeholder institutions in the business license registration and renewal processes,” said Wondimu.

Ethiopian Revenues & Customs Authority (ERCA), Ethiopian Investment Commission (EIC) and Document Authentication & Registration Office (DARO) will provide credentials during business license issuance and renewals. The integration is required as the validation process has to be crosschecked with these stakeholder institutions.

“The project requires intensive work,” said Dawit Nehemia who has 15 years experience in information technology and currently works at SSC Communications, one of the local IT solution providers.  “It requires various servers and software.”

The system could be upgraded by Customer Relations Management (CRM) programme which will be imported from overseas and used after customisation, according to Dawit.

Multilink Consulting