Wednesday, June 12, 2024
BusinessChamber of Commerce set to split as Industry Ministry finalizes designs for...

Chamber of Commerce set to split as Industry Ministry finalizes designs for dual structure

Officials say Chamber not doing enough for manufacturers

The authorities are crafting legislation that would see the Ethiopian Chamber of Commerce and Sectoral Associations split into two along lines of industry and trade. The business community is divided on its reception of the impending split.

Both trade and manufacturing are represented under the existing Chamber, with the Ethiopian Chamber of Commerce and Sectoral Associations (ECCSA) overseeing a number of sectoral, regional, and city chambers.

However, the ratification of new proclamations in the works under the Ministry of Industry would see only trade businesses remain part of the existing structure, while manufacturing industries will move to a new ‘chamber of industries.’

Last week saw stakeholders discuss the draft proclamation, sources confirmed to The Reporter. The Ministry of Trade is also simultaneously finalizing an amendment for the establishment proclamation for the existing Chamber. The amendment has been in the pipeline for three years but progress has been stagnant for a number of reasons.

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“Under the existing Chamber of Commerce, more focus is granted to trade businesses. Manufacturing industries are also under this umbrella, but do not receive sufficient attention and support,” Tilahun Abay, an advisor to the minister of Industry, told The Reporter. “The government has decided to split the Chamber.”

The idea was adopted from other countries. The decision comes following a recent visit from the Japanese Ministry of Industry, according to Tilahun.

Officials plan to mobilize sectoral associations in the manufacturing sector and establish a national confederation following the formation of the chamber of industry.

“Under the existing Chamber of Commerce and sectoral associations systems, the concerns and challenges of manufacturing industries are overlooked,” said Tilahun. “Manufacturing industries are typically disinterested in joining the Chamber because it is dominated by traders’ interests.”

He argues the establishment of a new, separate chamber will help address the problems facing the manufacturing sector.

However, representatives of ECCSA told The Reporter of suspicions that the efforts to split the Chamber are intended to weaken it.

“If manufacturing businesses exit and form a new chamber, the number of ECCSA members will dwindle. This will affect membership fees and the strength of the Chamber,” said a representative.

On the other hand, Tilahun argues the move is necessary.

“The Chamber might fear a drop in its membership numbers if manufacturers are gone, but this should not be a concern,” he said. “The major issue is solving the challenges facing manufacturing industries.”

Estimates placed the number of manufacturing industries in the country at 31,000 prior to the conflicts that have gripped large swathes of the country in recent years. However, reports of factories sustaining damage or closing due to conflict means that number has surely dropped, but it is difficult to say by how much.

A door-to-door manufacturing industries survey is currently underway by the Central Statistics Service (CSS).

Out of the 31,000 total industries estimation, 4,000 enterprises are classified as large-scale industries, with the remainder consisting of small and medium-sized establishments, according to official figures.

The Ministry of Industry, which outsourced the survey task to the CSS, hopes it will be finalized before the end of the current fiscal year.

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