Monday, July 22, 2024
PoliticsCoM endorses bill to amend Commercial code

CoM endorses bill to amend Commercial code

After decades of enforcement, the Council of Ministers (CoM) has endorsed a new draft bill to amend the Commercial Code of Ethiopia which proposes some sections of the Code to be governed under a separate legislation.

According to a statement issued by the Office of the Prime Minister, on Monday, the CoM, in addition to endorsing amendments to the commercial code, has also endorsed three other draft legislations. These include the power purchase agreement signed with CORBETTI, a draft bill to amend Mining Business Proclamation as well as a draft digital transformation strategy.

The Council passed the decisions in a virtual meeting.

“The adoption of a draft Commercial Code, half a century after the adoption of the existing Commercial Code, is a significant milestone in our endeavor to modernize and reform the country’s legal system,” PM Abiy Ahmed (PhD) said.

Abiy noted that the new Commercial Code is geared towards spurring innovation and enterprise, which are essential in our aspiration to build a prosperous society.

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According to a detailed explanation obtained from the Office of the Attorney General, is now required to revise and update it in a way to compliment the modern systems of the global economy and technology, while addressing wide ranges of challenges in respect to the changes that have come over time. Despite its strong qualities, it lacks to fully address the dynamism of commercial transactions of the real and virtual world, the statement said. 

The code consists of five books including Book -1 (Traders and Businesses), Book-2 (Business Organizations), Book-3 (Carriage and Insurance), Book-4 (Banking and Transitory Provisions) and Book-5 (Bankruptcy and Schemes of Arrangement).

Among the proposal, out of the five stated books, Book-3 and Book-4 are not related with trade business; hence, should be enacted separately in a Financial Code. Meanwhile, the remaining three books will be amended and provisions added.

During Monday’s session, the CoM held a debate on the provisions of the draft bill and later endorsed it, to be sent to the House of People’s Representatives (HPR).

The Reporter has learnt that, the approved bill has been reviewed for more than 18 years with the participation of several professionals and legal experts.

Another significant draft bill indorsed by the CoM in the same session, is the draft bill signed between Ethiopian government and CORBETTI, for a power purchase agreement. This particular draft agreement is believed to be a milestone for the country, bringing in the private sector in to the foray, for the first time.

According to the statement released by the Office of the Prime Minister, this draft legislation will give the green light for Corbetti and Tulu Moye companies, to develop a 300MW Geothermal Power, in a Public Private Partnership agreement.

At the event, Prime Minister Abiy Ahmed (PhD) said the conclusion of the Power Purchase Agreement with CORBETTI was finalized, having wasted many years to come up with an effective legislation such as PPP, Geothermal and Energy Proclamations, to support foreign direct investment and private sector participation for investment and technology transfer in Ethiopia. The Geothermal sector and skills in Ethiopia are critical to tap green, clean and renewable energy source to increase energy capacity, security and reliability of Ethiopia, he said.

According to Abiy, geothermal power provides a constant output of power to support our industrialization and continued economic growth.

The Council has further held debates on a draft bill dubbed Ethiopia’s Digital Transformation Strategy, and is said to play an  instrumental role in improving interconnectivity of kebele’s to woreda’s, develop digital knowledge, provide support to the tourism sector, and empower the technology sector as a whole.

The Office of the PM described this draft strategy as “a centerpiece of government’s effort to drive inclusive growth through innovations and digitalization.”

Moreover, the bill will support ongoing reform efforts on ease of doing business, by increasing the capacity of the public sector, to provide digital services while enabling faster growth of the digital economy in the country.

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