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Draft bill to lift CSO financing restriction

A new draft bill to repeal the existing restrictive Civil Society and Charity Proclamation has been tabled before the House of People’s Representatives (HPR) on Thursday proposing a resolution to lift the restriction imposed on CSO’s source of finance and the associated status of these organizations as resident or foreign Charities.

According to the existing law, charities registered as resident association and hence allowed to engage in advocacy work related to politics were prohibited from sourcing more than 10 percent of their funding from foreign sources.

In fact, organizations engaged in rights-based advocacy, peace building, conflict resolution among others, are barred from mobilizing funds in excess of 10 percent of their annual budget from oversees sources.      

The Draft bill, renamed as Civil Society Organization Proclamation, brought severe criticisms up on the government of Ethiopia since it was enacted in 2009.

According to the proposed bill that stipulates Resource Mobilization and Administration, CSOs, “shall have the right to solicit, receive and utilize funds from any [legal] resources.”

Explaining the major justification behind the amendment, the explanatory note to the proposed bill says, “The prevention of organizations from engaging in rights based advocacy paves the way for corruption and other bad governance practices.”

The draft bill also reduces the percentage of the overall budget that can be spent on administrative cost from 30 percent to 20 percent.

The administrative cost of an organization established for the benefit of the general public or to that of a third party may not exceed twenty percent of its total income, draft reads.

These are expenses not related to the project activities of an organization but are necessary to ensure the continuity of an organization and related to administrative activities including: salaries and benefits of administrative employees; purchase of consumables and fixed assets and repair and maintenance expenses related to administrative matters; office rent, parking fees, audit fees, advertisement expense, bank service fees, fees for electricity, fax, water and internet services; postal and printing expenses; tax, purchase and repair of vehicles for administrative purposes, and procurement of oil and lubricants for the same; insurance costs, penalties and attorney fees, according to the draft bill.

After a light discussion, the House referred the draft bill to the Law, Justice and Administrative Affairs Standing Committee for further reading.