Ethiopian Business Review

Private Sector Echoes WTO Recommendations

Ethiopian Chamber of Commerce and Sectoral Association (ECCSA) presented a position paper- Regulation and Openness of Ethiopia’s Service Sectors with an objective of fostering discussion about the private sector’s opinions on Ethiopia’s World Trade Organization (WTO) accession process.

The event, at Hilton Hotel on June 28, 2013, was organized by ECCSA and International Trade Center (ITC). It brought together private businesspeople, officials from ECCSA, including Mulu Solomon, ECCSA’s president and Malcolm Mckinnon, chief executive of ITC and an international negotiator of WTO, who has a decade of experience in the field.

The Position Paper evaluated the openness of the services sector, which represent 46 Pct of the country’s GDP. It recommends that in Ethiopia’s offer to WTO members it should consider opening up professional services like architecture, accountancy and legal services to foreign investors. The Position Paper also suggested opening up computer, construction, distribution, education and health services. Some of these services are already open for foreign investment. The Paper suggests that the government should officially announce that these sectors are open to foreigners.

Ever since Ethiopia applied to join the 159-member WTO in 2003, the openness of the financial sector for foreign investors and monopolized telecom services has topped the agenda of the country’s accession process. No different was the tone of the position paper, which some participants, objected to being named ECCSA Position Paper and not the Private Sector’s. In the World Economic Forum’s Networked Readiness Index, which measures the impacts of ICT on competitiveness, Ethiopia ranked 130th out of an evaluated 142 countries, the Paper stipulates.

“The telecom is giving the government a revenue of about ETB6 billion which is used to finance mega public projects,” said Prime Minister Hailemariam Desalegn on National Business conference, which was held at the United Nations Economic Commission for Africa on June 27, 2013. “Telecom stays with us for a while.”

Such is the government’s policy in terms of opening profitable monopolies like the finance and telecom sectors for foreign investment; a move which does not help to bring the accession any closer. Says Mckinnon: Ethiopia is not going to be a member of the WTO unless it reacts to the requests it receives from other WTO members.

The government however, justifies this action by saying they are trying to protect local business and they do not have the sophisticated regulatory framework needed to open up these areas to foreign investment. Many private sector spokespeople disagree pronouncing that they have not seen the benefit.

“They try to protect us as local manufacturers, but we are still at a disadvantage; they don’t understand because they are not in the business,” said Mulu, bold as always.

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