Sunday, December 4, 2022
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BusinessTransport Federation sets preconditions for registration of members as commercial entities

Transport Federation sets preconditions for registration of members as commercial entities

Transport associations will have five months to register as a business

A group of associations involved in the transport business under the Ethiopian Transport Employers’ Federation have listed sets of prerequisites to be fulfilled before registering as business entities.

Unhappy with the procedure the government underwent, which excluded consultation with the Federation before approval of the proclamation, the Federation raised concern about further exclusion from the processes.

Drafted by the Ministry of Transport and Logistics, the proclamation was tabled to the Parliament in February, 2022, and was legislated in July of the same year. It requires the associations to transform into commercial companies before April 2023.

In a general assembly of the Federation held last Thursday at Genet Hotel, leaders of the association presented to the members and representatives what they believe should have been considered while drafting the proclamation and should be included in the regulations and directives to follow.

Berhane Zereu, president of the association, says his office welcomes the proclamation positively but warns of a careful execution.

“We are the ones with the largest stake, but they didn’t receive any input from us. Following the proclamation, they should have prepared a regulation and a directive. It is impossible to continue implementation of the new proclamation with the old directive and regulation,” Berhane said.

The proclamation gives seven options for transport associations to reestablish themselves as business entities. This includes general partnerships, limited partnerships, limited liability partnerships, joint ventures, share companies, private limited companies, and single-person owned limited companies.

The Federation, however, wants only general partnerships, share companies, and private limited companies to be applied when the new rule comes into force.

Berhane said in his address speech that over 90 percent of the expenses for the trucks on their travel to and from Djibouti have no receipts.

Dagnachew Abebe, a member of an association and owner of a fuel truck with over two decades in the business, sees the transition from an association to a business organization as a disaster, given the sector’s problems.

“We have to pay a high amount of money for parking at all stops from here to Djibouti, make another expense of 2,400 birr to enter Djibouti, and 400 birr per day for our stay in the country, and also pay a high amount of money for the Djiboutian to help in case of accidents. We don’t receive receipts for all these,” Dagnachew said.

Spare parts importers don’t issue receipts because they source foreign exchange from unofficial sources, according to him. “And if they buy damaged vehicles from insurance companies and sell parts of these vehicles, they don’t give any receipts for that,” he said.

With a direct impact on over 70 percent of total transportation services in Ethiopia, the majority of which are cross-country cargo transport service providers, the Federation has about 68 associations under its wing, with 1,200 staff, excluding drivers and their assistants, and 15,000 trucks.

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