2016年-世界发展银行全球_The_Cost_of_Business_Registration_and_Licensing_in_Ethiopia_and_Options_for_Reform_156页_1mb

Summary of the Cost of Business Registration and Licensing in Ethiopia and Reform Options

Core Content

This report evaluates the cost of business registration and licensing in Ethiopia and proposes reforms to streamline the process and enhance the business environment. It is part of the World Bank Group's (WBG) Ethiopia Investment Climate Program, aimed at improving the regulatory framework to support private sector development and economic growth.

Key Findings

• High Number of Licenses: Ethiopia has over 1,320 specific licenses, many of which are redundant or not frequently used. This is significantly higher than international standards.
• Cost Burden on Businesses: The total compliance cost for businesses in Ethiopia is estimated at ETB 3.46 billion or 0.47% of GDP. This includes both direct and indirect costs.
• Compliance Costs Outweigh Licensing Fees: Licensing fees account for only 3.3% of total compliance costs, with the majority of costs stemming from documentation, administrative procedures, and time delays.
• Per License Costs: The average compliance cost per license is ETB 35,593.1, which is 443% of per capita income. The average license fee is ETB 1,359.0, or 17% of per capita income.
• Inefficiencies in the System: The current licensing regime is overly prescriptive, lacks compatibility with sector-specific laws, and involves excessive use of competence certification, which is often unnecessary and burdensome.

Main Views

• Regulatory Complexity: The licensing system is complex and burdensome, with many licenses not being used regularly, leading to inefficiencies.
• Cost of Compliance: Compliance costs are the main driver of the total cost, not the fees themselves. This is due to time-consuming procedures and excessive documentation.
• Need for Reform: The report emphasizes the need for a more streamlined, business-friendly licensing regime that aligns with international best practices and reduces the administrative burden on businesses.

Key Recommendations

Conceptual Reforms

1. Reduce the Number of Licenses:

   • Issue a single license covering all business activities under each "Major Group" defined by the ESIC.
   • Merge licenses for similar products or services into a single license to reduce complexity and cost.
   • This would reduce the number of licenses from 1,320 to around 400, a decrease of 70%.

2. Align ESIC with Sector Laws:

   • Conduct a comprehensive review of the ESIC to ensure it is in line with sector-specific legislation.
   • Eliminate licenses that are not required by sector laws.

3. Split ESIC into Two Classifications:

   • Create a separate classification for statistical purposes (ESIC) and another for licensing (Ethiopian License Classification, ELC).
   • This would improve the effectiveness of both functions and ensure coherence with international standards.

4. Review Competence Certification Requirements:

   • Competence certification is frequently applied across most licenses and is often unnecessary.
   • A review is recommended to eliminate redundant certifications and ensure that they are only required for activities that truly require them (e.g., construction, healthcare, etc.).

Operational Reforms

5. Simplify Trade Name Registration:

   • Address weaknesses in the current trade name registration process to reduce administrative burdens.

6. Remove Redundant Requirements:

   • Eliminate requirements without a clear legal basis to reduce unnecessary compliance costs.

7. Enhance Agency Coordination:

   • Improve inter-agency coordination and implement integrated systems to avoid duplication and streamline processes.

8. Build Institutional Capacity:

   • Strengthen the institutional capacity of relevant agencies to handle licensing and registration processes efficiently.

9. Increase Awareness and Participation:

   • Promote awareness creation among businesses to ensure better understanding and participation in the licensing process.

10. Reduce Time and Costs:

    • Streamline the time required to obtain licenses and reduce delays in the process.
    • Address penalties that are often excessive and not well justified.

Conclusion

The report concludes that Ethiopia's current licensing regime is too complex and burdensome, significantly increasing the cost of doing business. Streamlining the system by reducing the number of licenses, aligning with sector laws, and simplifying procedures can enhance the ease of doing business, improve competitiveness, and support economic growth. These reforms are essential for creating a conducive environment for the private sector and aligning Ethiopia with international best practices.

Key Information

• Total Compliance Cost: ETB 3.46 billion or 0.47% of GDP.
• Licensing Fees as a Share of Compliance Costs: 3.3%.
• Most Expensive License: ETB 240,000, or 2,989% of per capita income.
• Least Expensive License: ETB 0, or 0% of per capita income.
• Number of Licenses: Over 1,300, with only 10% being issued more than 100 times in a year.
• Reforms Proposed: Reduction of licenses, alignment of ESIC with sector laws, and simplification of procedures and requirements.

Annexes

• Annex 1: Lists licenses for which competence certificates are proposed to be abolished.
• Annex 2: Provides a simplified list of licenses for further consideration.
• Annex 3: Offers a detailed analysis of the licensing regime across sectors.