ETHIOPIAN CHAMBER OF

COMMERCE AND SECTORAL

ASSOCIATION (ECCSA)

FIVE-YEAR (2014/5 – 2018/19)

STRATEGIC PLAN

(FINAL)

MARCH 2014
 ACRONYMS AND ABBREVIATIONS
AF Administration and Finance Department
AACCSA Addis Ababa Chamber of Commerce and Sectoral Association
AGOA African Growth Opportunity Act
BDS Business Development Services
CIPE Center for International Private Enterprise
CIR Communication and International Relations Department
COMESA Common Market for Eastern and Southern Africa
DFID Department of International Development of the United Kingdom,
E.C Ethiopian Calendar
EBA Everything But Arms
ECCSA Ethiopian Chamber of Commerce and Sectoral Associations
ECX Ethiopian Commodity Exchange
EFY Ethiopian Fiscal Year
EPA Economic Partnership Agreement (European Union)
EPPCF Ethiopian Public Private Consultative Forum
EPRDF Ethiopian People’s Revolutionary Democratic Front
ETB Ethiopian Birr
EU European Union
FDI Foreign Direct Investment
FEMSEDA Federal Micro and Small Enterprise Development Agency
FGD Focus Group Discussion
GC Gregorian Calendar
GDP Growth Domestic Product
GSP Generalized System of Preferences
HDI Human Development Index
IBRD International Bank for Reconstruction and Development
ICT Information Communication Technology
IDA International Development Association
IDS Industrial Development Strategy
IFC International Finance Corporation
IGA Income Generating Activities
IGAD Intergovernmental Authority on Development
IMF International Monetary Fund
IT Information Technology
LDCs Least Developed Countries
M&E Monitoring and Evaluation
MDG Millennium Development Goals
MOFED Ministry of Finance and Economic Development
MoI Ministry of Industry
MOT Ministry of Trade
MOT Ministry of Trade
MoU Memorandum of Understanding
MS Membership Support Department
NBE National Bank of Ethiopia
PESTLE Political, Economic, Social, Technological, Legal and Environmental
PLC Private Limited Company
PPBD Planning Project, and Business Development Department
PPDFs Public-Private Partnership Dialogue Forums
PSD Private Sector Development
RA Research and Advocacy Department
SADC Southern Africa Development Community
SGO Secretary General Office
SIDA Sweden International Development Cooperation Agency
SME Small and Medium Scale Enterprise
SNNP Southern Nations, Nationalities and People
SNV Netherlands Development Organization
SSA Sub Saharan Africa
SWOT Strength, Weakness, Opportunities and Threats
UNDP United Nations Development Program
US United States
USAID United States Aid for International Development
WTO World Trade Organization
EXECUTIVE SUMMARY
The Ethiopian Chamber of Commerce and Sectoral Associations (ECCSA) is an umbrella,
autonomous, non-for-profit, non-partisan, and membership based private sector
organization. It was established with the aim of prompting trade and investment, inter alia,
in a bid to creating business friendly environment and vibrant private sector, working in
partnership with the government, business community, development partners and other
stakeholders and the society at large.

The Ethiopian Chamber of Commerce and Sectoral Associations (ECCSA) has eighteen
members including nine Regional Chambers of Commerce and Sectoral Associations, two
City Chambers of Commerce and Sectoral Associations, one National Chamber of Sectoral
Associations and six Sectoral Associations organized at national level. The higher decision
making body at the Chamber is the General Assembly which is composed of the
representatives of member chambers of commerce and sectorial associations of
ECCSA. ECCSA is governed by a board elected by the Generally Assembly. A seven member
management team led by the secretariat manages the day to day operation of the chamber.
The chamber currently has 46 permanent staff members and five project staff.

The Ethiopian Chamber of Commerce and Sectoral Association (ECCSA) has been guided by
a five year strategic plan that covered the years 2009/10 to 2013/14. A decision has been
made by ECCSA to develop a new five years strategic plan for the upcoming five years
covering 2014/15 to 2018/19. To this end, this five years strategic plan was developed
with active participation of members, board, staff, management, donors, member
organizations, government counterparts, private sector operators, employers’ associations,
and other key stakeholders. A strategic planning steering committee composed of members
drawn from the management and staff of ECCSA was established to develop the strategic
plan, with technical support from an independent consulting firm, Icos Consulting PLC.

The reparation of the strategic plan was highly participatory. A comprehensive context,
stakeholder and strategic analysis report produced through rigorous consultation with
relevant stakeholders was the basis to the development of this summary final strategic
plan. The strategic plan covers five years (2014/15 to 2018/19) and provides the
leadership, management, staff, members, and other stakeholders with a clear roadmap and
strategic priorities the Chamber has chosen to pursue to realize its vision and accomplish
its mission while fulfilling its mandates in the coming five years.

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ECCSA’s Mission Statement

To provide a platform for unified voice of the private sector that can
play a leading role in the economy through advocacy, trade and
investment promotion and capacity building

Vision Statement

To see a private sector that plays a leading role in the economy by

putting in place an institutionally sustainable chamber by 2025

Core Values
i.) Commitment to excellence: Delivering more than what is expected through
innovation, learning, continuous improvement, and employee empowerment.
ii.) Corporate social responsibility: Commitment to ethical and responsible
organizational practices in employee relations, environmental stewardship,
community outreach and corporate governance.
iii.) Transparency and accountability: Openness to all stakeholders and obligation
to comply with agreed rules and standards.

Strategic Priorities:
To accomplish ECCSA’s mission and realize its vision, the five years strategic plan was built
on the following five strategic pillars.
i) Strategic Priority 1: Improving the institutional capacity of the chamber system
ii)Strategic Priority 2: Promoting an enabling business environment
iii)
Strategic Priority 3: Promoting trade and industry
iv)Strategic Priority 4: Broadening resource base and strengthening financial sustainability
v) Strategic Priority 5: Building the capacity of the private sector to be internationally and
locally competitive

Strategic Objectives:
ECCSA aims to achieve the following strategic objectives during the strategic period:
1. To improve operational efficiency and service quality level to accepted standard by 2019
2. To strengthen evidence based decision making and promote organizational learning
3. To improve organizational visibility, publicity and strengthen its brand as the voice of
Ethiopian business
4. To improve management and leadership capacity of ECCSA and members
5. To strengthen institutional capacity and organizational set-up in a way that adequately
responds to the requirements and needs of members and the private sector.
6. To enhance members’ participation and engagement in ECCSA programs and activities

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 7. To strengthen public-private consultation so as to improve government policies that
enhance ease of doing business in Ethiopia
8. To ensure the development and adoption of private sector strategy or roadmap by the
government in the next three years
9. To popularize and ensure the issuance of a legal framework for Public Private Partnership
10. To institutionalize dispute resolutions mechanisms for the private sector by 2016
11. To strengthen and diversify BDS
12. To serve as independent data/information source on Ethiopian trade and industry by 2019
13. To promote export trade and enhance FDI in priority sectors
14. To enhance the role of the chamber and the business community in regional and
international trade engagements
15. To increase and diversify internal and external income sources
16. To improve firm level competitiveness and compliance to market requirements
17. To enhance business ethics and corporate social responsibility among the business
community

Financing the Strategic Plan

The implementation of the five years strategic plan will require close to 175 million
Ethiopian Birr. About two-third of the budget is allocated to build the capacity of the
chamber system. Funding from loan and internal sources is expected to finance 81% of
the total budget while the remaining 19% is believed to be provided by development
partners.

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 TABLE OF CONTENTS
1. INTRODUCTION................................................................................................................................... 3

2. METHODOLOGY................................................................................................................................... 4

3. BACKGROUND ..................................................................................................................................... 6

4. ACHIEVEMENTS AND CHALLENGES UNDER THE CURRENT 2009/10-20013/14 STRATEGIC PLAN ... 14

5. SITUATION ANALYSIS....................................................................................................................... 16

5.1. General Country Context ............................................................................................................ 16

5.2. The Private Sector and Ease of Doing Business in Ethiopia ........................................................ 18

5.3. Trade Relations ........................................................................................................................... 24

5.4. Public Private Partnerships in Ethiopia ....................................................................................... 25

6. STAKEHOLDER ANALYSIS ................................................................................................................ 27

7. STRATEGIC ANALYSIS (SWOT ANALYSIS)...................................................................................... 30

8. MANDATES, MISSION, VISION AND CORE VALUES OF ECCSA ...................................................... 51

9. STRATEGIC PRIORITIES ................................................................................................................... 53

10. STRATEGIC OBJECTIVES............................................................................................................... 55

11. STRATEGIC INITIATIVES .............................................................................................................. 56

12. IMPLEMENTATION PLANS ........................................................................................................... 59

13. MONITORING AND EVALUATION (M&E).................................................................................... 68

APPENDICES .............................................................................................................................................. 76

Appendix 1) List of ECCSA staff that participated in FGD .................................................................... 77

Appendix 2) List of Key External Stakeholders Consulted ................................................................... 78

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Appendix 3) Stakeholders’ Expectations ............................................................................................. 79

Appendix 4) ECCSA’s Income by Source from 2008/9 to 2011/12 Fiscal Years .................................. 82

Appendix 5) Explanations and Definitions for Performance Indictors Identified for Objectives Under
Each Strategic Priority ............................................................................................................................. 83

Appendix 6) Bibliography .................................................................................................................... 87

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 1. INTRODUCTION
The Ethiopian Chamber of Commerce and Sectoral Associations (ECCSA) is an umbrella,
autonomous, non-for-profit, non-partisan, and membership based private sector
organization. It was established with the aim of prompting trade and investment, inter alia,
in a bid to creating business friendly environment and vibrant private sector, working in
partnership with the government, business community, development partners and other
stakeholders and the society at large.

The Ethiopian Chamber of Commerce and Sectoral Associations (ECCSA) has eighteen
members including nine Regional Chambers of Commerce and Sectoral Associations, two
City Chambers of Commerce and Sectoral Associations, one National Chamber of Sectoral
Associations and six Sectoral Associations organized at national level. The higher decision
making body at the Chamber is the General Assembly which is composed of the
representatives of member chambers of commerce and sectorial associations of
ECCSA. ECCSA is governed by a board elected by the Generally Assembly. A seven member
management team led by the secretariat manages the day to day operation of the chamber.
The chamber currently has 46 permanent staff members and five project staff.

The Ethiopian Chamber of Commerce and Sectoral Association (ECCSA) has been guided by
a five year strategic plan that covered the years 2009/10 to 2013/14. A decision has been
made by ECCSA to develop a new five years strategic plan for the upcoming five years
covering 2014/15 to 2018/19. To this end, it contracted Icos Consulting PLC to facilitate
the preparation of its five years strategic plan with active participation of members, board,
staff, management, donors, member organizations, government counterparts, private
sector operators, employers’ associations, and other key stakeholders. A strategic planning
steering committee composed of members drawn from the management and staff of ECCSA
has been established to develop the strategic plan together with the consulting firm.

A comprehensive context, stakeholder and strategic analysis report produced by the

consultant in consultation with relevant stakeholders was the basis to the development of
this strategic plan. The strategic plan covers five years (2014/15 to 2018/19) and provides
the leadership, management, staff, members, and other stakeholders with a clear roadmap
and strategic priorities the Chamber has chosen to pursue to realize its vision and
accomplish its mission while fulfilling its mandates in the coming five years.

3
 2. METHODOLOGY

ECCSA’s strategic plan for the period 2014/15 to 2018/19 was a product of wider
consultations with key stakeholders and strategic partners. Various stakeholders ranging
from members to board of directors to relevant governments officials to donors to
employers and bankers associations, key private sector operators and to staff and
management of ECCSA were consulted.

The initial step in the development of the strategic plan was the conduction of context,
stakeholder and strategic analysis to serve as a basis for planning. Both primary and
secondary data sources were consulted to gather the necessary information for the context
and strategic analysis. Secondary data and documents were collected from several sources,
including ECCSA, donors, member organizations, government agencies, and international
organizations. The list of documents collected and reviewed included legal, policy and
strategy of the federal government, relevant publications and reports of sector ministries,
strategic plans of member organizations and other chambers elsewhere in the world,
publications made on the Ethiopian Chamber system and the private sector, publications of
the Central Statistical Authority, publications on Ethiopian business and investment climate
by the World Bank, World Economic Forum and other foreign countries, and other
documents (see Appendix 6 for the list of references consulted). These documents were
mainly used for the analysis of the country’s context or situation with regard to the private
sector and the chamber system in Ethiopia and available opportunities and threats that
should be dealt with during the strategic period. In addition, all relevant documents
maintained by ECCSA such as strategic plan, annual plan and performance reports,
organizational policy, manuals and guidelines, and others were reviewed.

Primary data were gathered from various stakeholders, including ECCSA’s board,
management and staff, members, employers’ associations, private sector operators and
government counterparts. Various data gathering methods were employed to collect the
primary data, including member survey, group discussion, key informant interviews, and
observation. A survey was conducted with over 30 representatives of member
organizations, ECCSA board members, donors and management team at a workshop held at
Ghion Hotel on February 7, 2013. Apart from the data gathered through the survey, four
focus group discussions were also conducted with these representatives of member
organizations to obtain in-depth information. Key informant interviews were also
conducted with over 20 government officials that involved 12 different government
ministries and agencies, and other key external stakeholders. The interview was
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administered using semi-structured questionnaire (see Appendix 2 for the list of external
stakeholders consulted). Although ECCSA members are organizations rather than business
people, three focus group discussions were conducted with over 20 prominent private
sector operators at a workshop held at Radisson Hotel on March 14, 2013. In addition, two
focus group discussions were conducted with 17 staff members of ECCSA to gather in-
depth information about the health of ECCSA and its strengths and weaknesses (see
Appendix 1 for the list of staff members that participated in these FGDs). The consulting
team also made observations to complement the data captured through other data
gathering tools.

The data collected were analyzed using different strategic analysis tools and techniques. A
stakeholder mapping and analysis technique was applied to identify key stakeholders of
ECCSA along with their expectations and power in influencing decision making at ECCSA. A
PESTEL (political, economic, social, technological, legal and environmental) framework was
utilized to guide data collection and analysis about the external environment which was
used to describe the current situation of the private sector and chamber system in the
country and identify opportunities that should be tapped and threats that should be tackled
by ECCSA in the years to come. Rigorous review of available literature and data collected
from a range of stakeholders were the major sources of data for the external environment
analysis. ECCSA’s internal environment as related to its resources and capabilities was also
analyzed through review of its documentations, observation of its activities, and collection
of first-hand data from staff, management, board members, member organizations and all
other stakeholders consulted. Apart from describing the current state and condition of
ECCSA, the internal environment analysis was used to identify its strategic strengths and
weaknesses. Finally, the SWOT (strengths, weaknesses, opportunities and threats) matrix
was used to summarize the key results of the internal and external environment analysis.

The development of the strategic plan took place in Adama city to minimize distraction and
ensure focus. Following the review and validation of the context, the strategic planning
team defined ECCSA’s mission, vision, values, desired strategic priorities, and the strategic
objectives to pursue in the next five years. Strategic initiatives along with key activities that
ECCSA should implement to achieve the strategic objectives, realize its vision and
accomplish its mission were also identified and costed. The draft strategic plan was
presented and validated at a stakeholders’ workshop held at Hilton Hotel that saw over 60
participants. This final strategic plan incorporated all the relevant comments and inputs
provided by the stakeholders.

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 3. BACKGROUND

An effective relationship between the state and businesses is critical for private sector
development. The state creates the environment within which the private sector operates
by providing political and economic stability, ensures human rights, provides safety and
security, develops social and economic infrastructure, puts in place trade policy, taxation
policy, competition policy, contact enforcement mechanisms, labor codes, etc. The private
sector serves as engines of economic growth by generating employment, livelihoods,
incomes, accessibility to goods and services etc. Business associations or chambers are
believed to maintain the private sector as the engine for a nation’s economy and promote
an open society and transparent government.

Although Ethiopia was a trading nation dating back thousands of years, the genesis of the
chamber system in Ethiopia is a recent phenomenon. It dates back to the commodity crisis
in 1941/42 immediately after the liberation of Ethiopia from the Italian occupation. At this
time there was a shortage of essential goods such as cotton, salt and other items and there
was a need to distribute these items to the public through rationing. Although it was not a
legal entity, the Ministry of Commerce and Industry of the time invited the Ethiopian
Patriotic Association, which was concerned with the affairs of merchants, to distribute the
essential goods to the general public through its estimated 300 members (ECCSA/PSD-
HUB, 2013). With the recovery of the economy, there was no need to ration the scarce
items and the membership of the association declined sharply. However, the Government,
cognizant of the achievements of the association, issued the imperial charter for the
establishment of the Addis Ababa Chamber of Commerce (AACC) that was published in the
Negarit Gazeta as General Notice Number 90/1947 in April 1947. Thus, the Imperial
Charter for the establishment of the Addis Ababa Chamber of Commerce marked the
beginning for modern legal history of Chambers of Commerce in Ethiopia. Although the
Charter provided the basis for the legal establishment of regional city chambers, it neither
imposes a requirement for businesses to a mandatory nor voluntary membership. In 1965,
the Addis Ababa Chamber of Commerce was renamed by the decision of its board of
directors as The Ethiopian Chamber of Commerce and this decision was submitted to and
accepted by the Emperor. However, such acceptance was not accompanied by the
amendment of the Charter.

A strong chamber and flourishing private sector and business associations, however,
suddenly suffered serious blow following the eruption of the 1974 revolution. The
“Dergue,” toppled the Emperor and proclaimed Socialism as its official economic policy and
6
ideological orientation. As a result, private land, private manufacturing industries,
mechanized farms and service rendering institutions were nationalised and emerging
private businesses discouraged. In line with its ideology, it felt the need to issue a new
proclamation to establish chambers of commerce, which would operate under the guidance
of “the National Democratic Revolution Program.” The Dergue, thus, issued the Chamber of
Commerce Proclamation No. 148/1978 which heralded for the first time, the legal
establishment of a national chamber, the Ethiopian Chamber of Commerce and other
“Urban Centre Chambers” to be established in consultation with the Minister of Commerce
and Tourism. The Ethiopian Chamber consisted of “the council whose members are
presidents of Chambers and a representative of the Minister.” The Proclamation introduced
mandatory membership and imposed the obligatory representation of virtually each public
commercial, agricultural, industrial, financial institutions as well as cooperative societies
and peasant associations. During this period, the relative independence chambers enjoyed
during the imperial era was abolished as the chambers become a wing of the government
and the small private sector was practically undermined.

Following the downfall of the Dergue regime in 1991, a new market oriented economic
policy was adopted by the Transitional Government of Ethiopia (TGE). However,
Proclamation No. 148/1978 continued to be in force even though most of the rules
contradicted the policies and laws of the TGE and later, the Constitution of the Federal
Democratic Republic of Ethiopia. With the adoption of the Transitional Government charter
and later the constitution, the right to freedom of association was recognized and
businesses of various sectors or sub-sectors quickly got organized at national and local
level. Although late, the Government issued the Chamber of Commerce and Sectoral
Associations Establishment Proclamation No.341/2003 which reconstituted the chambers
of commerce and sectoral associations in line with the free market policy of the
government and the federal structure adopted by the country. Consistent with article 31 of
the Ethiopian Constitution that ensures freedom of association, the Proclamation
introduced voluntary membership. It also included the establishment of sectoral
associations and their chambers.

At present, the Chambers of Commerce and Sectoral Association Establishment

Proclamation No 341/2003 and the Directives for the Implementation of the Proclamation
form the legal basis for the establishment of the current chamber system in Ethiopia. The
Proclamation provides for the establishment of the Ethiopian Chamber of Commerce and
Sectoral Associations (ECCSA), regional chambers of commerce and sectoral associations,
city chambers of commerce and sectoral associations, sectoral associations at woreda,
regional and national levels, the national chamber of sectoral associations, regional
chambers of sectoral associations and woreda chambers of associations, each with their
7
own powers and duties, organisation and juridical personalities. The directives on the
implementation of the proclamation issued by the MoTI specifies the sectoral associations
to be established from the beginning at the national, regional or woreda level as well as the
sectoral associations to be directly members of the ECCSA and the regional and city
chambers of commerce and sectoral associations. It also provides the criteria to be met for
the establishment of sectoral associations and the councils of sectoral associations and
defines the modalities for the registration of the sectoral associations.

The Ethiopian chamber system functions as a public law chamber under Proclamation
341/2003 with voluntary membership and two parallel organizational entities, namely:
The Chambers of Commerce and Sectoral Association with individual membership of
businesses in the non-manufacturing sectors and associated membership of specific
sectoral associations as prescribed by the directives of the then Ministry of Trade and
Industry for the implementation of the Proclamation; and the Chambers of Sectoral
Association with associated membership of sectoral associations, which in turn have
individual membership at different levels.

The chambers of commerce and sectoral associations are established at three levels. At
cities of the regions and woreda administrations levels, traders with business license and
permanent working place in the city and four sectoral associations that have been selected
as per the directives of the then Ministry of Trade and Industry for the implementation of
the Proclamation among the 13 sectoral associations that are prescribed to be established
at city or woreda level may become members of the city chamber of commerce and sectoral
associations. At regional level, City Chambers of Commerce and Sectoral Associations
established in the Region and Regional Sectoral Associations of the same region establish
their Regional Chambers of Commerce and Sectoral Associations. At national level, the
Ethiopian Chamber of Commerce and sectoral Association (ECCSA) has as its members
regional chambers of commerce and sectoral associations, the National Chamber of
Sectoral Associations, and six sectoral associations that have been selected as per the
directives of the then Ministry of Trade and Industry for the implementation of the
Proclamation among the 21 sectoral associations that could be established at the national
level.

As provided by the Proclamation, the Chamber of Sectoral Associations are prescribed to be

founded by owners of firms involved in different sectors of production activities. Similar to
Chambers of Commerce, Chambers of sectoral associations are again established at three
levels. At woreda (district administration) level, Sectoral Associations established by
owners of different production firms organize their respective woreda Chamber of Sectoral
Associations. At Regional level, Chamber of Sectoral Associations established at different
8
woredas in the region, shall organize their respective Regional Chamber of Sectoral
associations. At national level, Regional Chambers of Sectoral Associations organize the
National Chamber of Sectoral Associations.

The Ethiopian Chamber of Commerce and Sectoral Associations (ECCSA) is an apex

organization of Chambers and Sectoral Associations in Ethiopia with eighteen members
including nine Regional Chambers of Commerce and Sectoral Associations, two City
Chambers of Commerce and Sectoral Associations, one National Chamber of Sectoral
Associations and six Sectoral Associations organized at national level.

According to Proclamation 341/2003, ECCSA is mandated to encourage the establishment

of Chambers at different levels and provide necessary support; find local and foreign
markets for products and services; participate with the concerned organs, in identifying
export products, improving their quality and quantity and in finding solutions to problems
pertaining to trade activities; establish relations with foreign chambers in order to
exchange information and share experience; organize or participate in local or foreign
trade exhibitions upon obtaining license from the concerned organ; settle disputes arising
out of business transactions between members, by way of arbitration, when the parties so
request; issue product certificate of country of origin upon delegation by the Government;
prepare commercial gazettes, bulletins, reports, compile statistical information and provide
different trainings; make members aware of business related government policies,
proclamations, regulations and directives; and participate at discussion forum prepared by
the Government; determine the contribution to be made by members and charge fees for
the services it provides; and others

ECCSA Services: At present, its mission focuses on creating a vibrant private sector in the
country through advocacy, promotion of trade and investment and capacity building. To
accomplish this mission and fulfill its legal mandates bestowed to it, ECCSA delivers the
following main services:
i. Provision of business information to the business community
ii. Research and advocacy
iii. Business advisory
iv. Business networking
v. Trade fairs/exhibition
vi. Investment guide
vii. Exporters guide
viii. Importer guide
9
 ix. Issuance of certificate of origin
x. Document authentication (export)
xi. Invoice chamberization
xii. Affidavit of support for the business community
xiii. Need based training
xiv. Technical and skill development
xv. Preparation of strategic plan, project proposal, etc.
xvi. Soliciting supports for members from donors

Governance and Organization: ECCSA is governed and managed by a Council or general

assembly of members, a Board of Management, a Secretary, and the necessary staff. The
General Assembly or council is the highest decision making body in the chamber. It is
composed of the representatives of member chambers of commerce and sectorial
associations of ECCSA. The General Assembly is mandated to approve annual budget and
work program of the Chamber; elect Board members of the Chamber; assign an Auditor for
the audit of the books of accounts and financial documents of the Chamber; examine and
approve reports submitted to it from the Secretary General and the Auditor; and approve
internal regulations of the Chamber, and give decisions on other matters concerning the
Chamber.

The General Assembly or Council elects the president and the deputy and Board members
not exceeding 11 from among its members that direct the Ethiopian Chamber of Commerce
and Sectoral Association (ECCSA) every two years. The board, including the president, vice
president and the secretary general employed by the board, is the principal governing body
in the chamber and is primarily entrusted with responsibilities of ensuring the
implementation of the decisions of the General Assembly; employing and dismissing the
Secretary General; decide on the employment and dismissal of the heads of departments
and services of the Chamber, submitted to it by the Secretary; and submitting annual
budget and work program of the Chamber to the General Assembly. The Secretary General
leads the day to day administration and management of ECCSA and serves as the Chief
Executive Officer of the Chamber and reports to the Board of Directors. The secretariat’s
day to day activities are carried out by the five line departments as well as support units as
depicted in the figure below.

Figure 3: Governance and Organizational Structure of ECCSA

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 Source: ECCSA Website

Article 11 sub-article 3 of Chambers of Commerce and Sectorial Association Establishment

Proclamation No. 341/200 granted the board to decide on the employment and dismissal
of the heads of departments and services of the Chamber, submitted to it by the Secretary.
While it is true that the board is required to provide strategic and financial oversight to the
chamber and appoint and dismiss the secretary general, its involvement in decisions
regarding employment and dismissal of the heads of departments and services of the
Chamber don’t seem to comply with the principles of good governance. This is partly
because of the fact that interference of the board in the operation of the chamber could
create tacit or explicit dual accountability of staff (to board members and the secretariat)
which violates unity of command creates confusion. As the Secretariat is the chief executive
officer that will take both the credit and blame for the performance of the chamber,
decisions about resources, including the hiring and firing of staff should have been granted
to the Secretariat. Similarly, Article 12 (1) (a) of the 2003 Proclamation states that the
President shall be the Chairperson of the meetings of the Council and the Board. In fact,
article 9 (3) of the proclamation also granted the chairperson to have a casting vote in case
of a tie vote at the council. From a good governance perspective, the member of any board
cannot chair general assembly meetings as there is clear conflict of interest. The general
assembly meeting should be chaired by elected members that are not part of the board as it
would be difficult to seriously evaluate the performance and achievements of the president
and the other board members in a meeting chaired by themselves. These provisions of the
law could have significant negative governance ramifications and efforts should be exerted
to address them.

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Human Resource: ECCSA has 46 permanent and five project staff that execute the day to
day activities of the chamber. Seven of the permanent staff members constitute the
management team. There are also 14 experts and 23 support staff. 24 of the permanent
staff members have first degree and above (six of them have second degree and the rest
bachelor degree) while the rest of them have diploma and below.

Asset base and infrastructure: ECCSA has had a total net worth (after deduction of
liabilities from total assets) of Birr 8,441,527 on July 7, 2012. Fixed assets such as building,
printing equipment, furniture, motor vehicles and others, at net book value, represent a
third of the total assets of the chamber. However, the market value of ECCSA’s resources is
expected to be much higher than the reported figure as key resources such as the
repossessed building is being taken at historical cost with zero value as it was fully
depreciated. It is important to note that the building, though taken at zero valued in the
balance sheet, generates almost half of the chamber’s annual revenue. The chamber also
has a well-developed website that is helping it to interact with the rest of the world. In this
information era, the webpage is an essential resource for the Chamber to promote its
services, avail information for members and the private sector at large, establish
relationships and perform other duties.

Sources of Income: ECCSA’s sources of income are mainly from its non-operating activities
accounting for close to 70% of its total annual income during the last four fiscal years (from
2008/9 to 2011/12). Rent income accounts for close to half of the total income (49%)
followed by donation (7.8%) and advertisements (7.1%). The contribution of the major
source of income, rental of the building repossessed by the chamber, to total annual income
has been declining steadily owing to the fact that some members that reside around Addis
Ababa were allowed to co-own and take a significant portion of the office space for
themselves.

Service or operating income accounted for a third (30%) of the total income of ECCSA
during the last four years ending July 7, 2012. Its operating income comes from members’
contribution, issuance or certificates of origin, recommendation services, legalization of
agreements and trade fair. Income from certificates of origin and trade fair are the major
service incomes sources of the chamber. Nevertheless, while member organizations are
required to contribute 10% of their net annual income (after deduction of expenditures
from total income), their contribution accounted for less than 3% of the total income
during the last four years ending July 7, 2012. In fact, it was learned that only few member
organizations pay their membership dues (see Appendix 4 for the details).

12
In sum, while the rental from the re-possessed building is an important source of income
for the chamber, its much reliance on a single non-operating income cannot be considered
a sustainable financing strategy. In other words, much effort is needed to significantly
increase income from operating activities and membership fees to put in place a
sustainable financing model.

13
 4. ACHIEVEMENTS AND CHALLENGES UNDER
THE CURRENT 2009/10-20013/14
STRATEGIC PLAN
ECCSA has been implementing its current five years (2009/10-20013/14) strategic plan
during the last four years. It was prepared with a vision to become an internationally
competitive and exemplary chamber in Africa. To realize this vision, 20 strategic objectives
were identified. These were:
1. To assist member organizations to increase their members to 100,000 in five
years
2. To engage in proactive and retroactive advocacy works to complement the
creation of conducive business and investment environment in the country
3. To create multi stakeholders’ platforms with a view to coordinating the efforts of
various stakeholders for the promotion of business and investment
4. To build the human resource, material and facility capacity of the National
Chamber to enable it to discharge the responsibilities vested upon it effectively
and efficiently
5. To build the human resource, material and facility capacity of member
organizations to enable them provide effective and efficient services to their
respective members
6. To enhance the public image of the national chamber
7. To enhance efficiency in service delivery in authentication of documents,
provision of certificate of origin, affidavit of support and business information to
the business community
8. To educate and encourage the business community to discharge their corporate
social responsibilities
9. To develop effective Information Communication Technology and achieve
efficient utilization of the system at the national level and member organizations
10. To Improve the advocacy services through institutionalizing Public-Private
Partnership Dialogue Forums (PPDFs) at National, Regional and City levels
11. To improve the financial capacity of the National Chamber and its members
12. To contribute to the improvement of the inflow of Foreign Direct Investment
(FDI) into the country
13. To contribute to the enhancement of the export earning of the country through
promoting Ethiopian products in foreign markets

14
 14. To promote products and services of the country with a view to strengthening
local industries.
15. To construct a building that serve as a source of income at a vacant place inside
the Chamber’s premises
16. To establish chamber academy which serves the private sector of the nation and
the continent
17. To complement the effective implementation of bilateral and international trade
agreements signed by the government
18. To ensure the protection of the interest of the private sector through
participating in bilateral, regional and multilateral trade and investment related
negotiations such as the WTO accession process at technical and higher levels.
19. To establish standardized communication system between ECCSA and member
organizations
20. To support member organizations so that they can deliver demand driven
services to their respective members

Although general impact ‘indicators’ were identified to measure the above strategic
objectives, targets were not set to evaluate progress on these performance indicators. The
indicators identified were also very difficult to measure. Adequate and systematically
documented evidences were not also available to determine progress to date and
achievements of ECCSA on its current strategic plan. Even so, annual plans that are claimed
to have emanated from the strategic plan were prepared along with budget and annual
physical and audited financial performance reports. However, performance reports were
mainly activity and input based and fell short of reporting real changes against planned
targets on the indicators identified to measure progress on the strategic objectives. The
annual report focused on implementation of planned activities during each fiscal year on
seven key areas, including members’ support, research and advocacy, trade and
investment, communications and international relations, plan and project, information
technology, and finance and administration. The reporting seemed to have been tailored to
show departmental performance rather than progress on the strategic objectives. Hence,
the consultant was unable to report on the achievements of the current strategic plan due
to the lack of measurable indicators with targets for strategic objectives, unavailability of
systematic monitoring and evaluation system, and weak documentations practices of the
chamber. Documented evidences were also lacking on challenges faced and lessons learned
during the implementation of the current strategic plan.

Nevertheless, several activities were carried out during the last four years that might have
contributed to some of identified strategic objectives such as institutionalizing Public-
Private Partnership Dialogue Forums (PPDFs), promoting the products of the country,
15
attracting Foreign Direct Investment and improving export earning of the country.
Discussion with stakeholders revealed that ECCSA’s performance on strategic objectives
such as improving members’ membership and capacity to design demand driven
approaches, establishing standard communication system and improving image and
efficiency of ECCSA, and educating the business community of corporate social
responsibility were either unachieved or barely pursued.

5. SITUATION ANALYSIS
5.1. General Country Context

Ethiopia is the second-most populous country in Sub-Saharan Africa with a population of

about 85 million (United Nations, 2011). One of the world’s oldest civilizations, Ethiopia is
also one of the world’s poorest countries. The country’s per capita income of USD $370 is
substantially lower than the regional average of US$1,257), although the government
claims that Gross Domestic Product (GDP) per capita has grown to USD 513 in 2012/131.
Ethiopia is one of the least developed countries in the world. According to UNDP’s Human
Development Index (HDI) report (2013), poverty rates in Ethiopia are quite high and the
country was ranked 173th out of 187 countries on Human Development Index in 2012.

For much of the 20th century, Ethiopia was ruled by highly centralized governments. The
current ruling party, the Ethiopian People’s Revolutionary Democratic Front (EPRDF) has
governed Ethiopia since 1991. Since taking power, the EPRDF has led several reform
efforts to initiate a transition to a more decentralize authority. The nine regional states of
Tigray, Affar, Amhara, Oromia, Somali, Benishangul-Gumuz, Southern Nations Nationalities
and Peoples (SNNP), Gambela, and Harari with the two city administrations of Addis Ababa
and Dire Dawa constitute the administrative structure of the country. The government
follows a federal system and election is held every five years.

The Ethiopian government aspires to reach middle income status (current threshold:
US$1,025) over the next decade. According to a new report by the World Bank 2, over the
past decade, the Ethiopian economy has been growing at twice the rate of the Africa region,
averaging, 10.6 percent GDP growth per year between 2004 and 2011 compared to 5.2

1
Ministry of Finance and Economic Development (MoFED), Brief Note on the 2012/13 National Accounts Estimates
series, 2012
2
Geiger, Michael; Goh, Chorching. 2012. Ethiopia economic update: overcoming inflation, raising competitiveness.
Washington DC : World Bank.. http://documents.worldbank.org/curated/en/2012/11/17073947/ethiopia-
economic-update-overcoming-inflation-raising-competitiveness
16
percent in Sub-Saharan Africa. The same report also states that two and a half million
people in Ethiopia have been lifted out of poverty over the past five years as a result of
strong economic growth, bringing the poverty rate down from 38.7 percent to 29.6 percent
between 2004/05 and 2010/11.

The economy has experienced strong and broad based growth over the past decade,
averaging 9.9% per year in 2004/05 - 2011/12. Economic growth brought with it positive
trends in reducing poverty, in both urban and rural areas. While 38.7% of Ethiopians lived
in extreme poverty in 2004-2005, five years later this was 29.6%, which is a decrease of 9.1
percentage points as measured by the national poverty line, of less than US$0.6 per day3.
However, the fast economic growth seems to be adversely affected by the existence of
inflation. Headline inflation has been strongly affected by volatility in food prices, much of
it reflecting international price developments and the exchange rate adjustment (Assefa,
Bienen and Ciuriak; 2012). Macroeconomic policies, especially in interest rate adjustments
were suggested by the International Monetary Fund (IMF) to Ethiopia and the Sub-Saharan
Africa to restore macroeconomic stability to reasonable level.

According to the national census survey of 2007, around about 85% of the total population
of Ethiopia lives in the rural area that have primarily based their livelihood directly or
indirectly on agriculture which accounts for 41% of GDP and 85% of total employment
(NBE, 2011 and MoT, 2010). Industry and the service sectors account for 13.4 and 45.6
percent of GDP, respectively (NBE, 2011).

Currently, the Ethiopian government is implementing a five year strategic plan dubbed
“The Growth and Transformation Plan (GTP)”, the implementation of which has entered its
third year. The GTP is geared towards fostering broad-based development in a sustainable
manner to achieve the MDGs. The GTP envisions a major leap in terms of not only economic
structure and income levels but also the level of social indicators. Key goals include
doubling the size of the economy and achieving MDGs by 2015

According to a 2012 Doing Business in Ethiopia commercial guide published by the U.S. and
Foreign Commercial Service and U.S. Department of State, Ethiopia generally suffers trade
deficits. In fiscal year 2010/2011, exports totaled $2.75 billion, while imports totaled $8.25
billion for a trade deficit of $5.5 billion, compared to $6.4 billion in fiscal year 2011/12.
Ethiopia's major exports include coffee, oil seeds, gold, chat, flowers, pulses, and live
animals. Coffee is the leading export, constituting 30.6%% of total exports by value in fiscal
year 2010/11 followed by gold, which comprised 17% of total exports. The country's main

3
World Bank, Ethiopian Review, http://www.worldbank.org/en/country/ethiopia/overview, April 2013
17
imports include petroleum products, machinery, metal products, agricultural and industrial
chemicals, fertilizers, medical and pharmaceutical products, and food grains. The major
sources of Ethiopian imports in fiscal year 2010/11 were: China (15.6%), Saudi Arabia
(9%), India (7.2%), UAE (7%), Japan (5.4%), Italy (4.5%), Turkey (3.5%), and United States
(3.4%). Ethiopia's top five export destinations in fiscal year 2010/11 were: Switzerland
(17%), Germany (11.5%), China (9.1%), Somalia (8.2%), and the Netherlands (6%).

5.2. The Private Sector and Ease of Doing Business in Ethiopia

Ethiopia’s private sector is small, un-competitive and largely informal contributing only
25% of total economic output (Kolli, 2010). The informal sector dominates, accounting for
80% of GDP and 88% of the workforce (DFID, 2010). Gietema (2012) notes that the private
sector in Ethiopia is still in its infancy and the state continues to play lead role in the
development process, but as it has a hold on most resources, it risks ‘crowding out’ the
private sector. Even so, the amount of investment by the private sector in Ethiopia has
shown descent increase over the years. According to 2011/12-2014/15 the strategic plan
of the Ministry of Industry, investment of the private sector has increased from 12,927
million Ethiopian Birr in 1998 E.C to 46,399 million in 2002 E.C.

According to the recent World Bank survey, despite the perceived obstacles, Ethiopia is an
attractive business destination for enterprises (World Bank, 2012). The limited market
capacity and market competition, cheap labor, cheap land, and an expanding Ethiopian
market; cross-border investment incentives provided by the government; and stable
political environment are believed to be among the major drivers of FDI in the country.
During the last decade, the Ethiopian government has continuously provided FDI
incentives, such as tax holidays and tariff-free policies for FDI equipment imports. These
incentives have proved to be a large motivation for foreign firms’ investment in Ethiopia,
especially for the manufacturing industry. In addition, the Ethiopian government provides
a stable political environment for the firms to do business smoothly around the year. The
fact that the production capacity in Ethiopia is still low, and the local market is rapidly
expanding could also mean that the market is very attractive for foreign investors. There
also efforts to cut down on bureaucracy and rent-seeking in the country. Senior managers
in Ethiopia spend about half the time of those in Sub-Saharan African (SSA) countries in
dealing with the requirements of government regulation (World Bank, 2012).

Although Ethiopia is among the top fast growing economies in the world, according to the
World Bank, its position in ease of business doing has been eroding in the last two years.
The World Bank’s recently released Doing Business 2013 report for Ethiopia revealed that
Ethiopia has slipped from the high point of 104th position in 2011 back to 127th in 2013
18
out of 185 economies ranked globally. By comparison, Rwanda ranked 52 and the average
for Sub-Saharan Africa was 140. Ethiopia performed best on enforcing contracts and worst
on starting a business, trading across borders and protecting investors.

19
 Table 1: Ease of Doing Business 2013 Ranking
Ease of... Doing Business 2013 rank
Doing Business (Overall Ranking) 127
Starting a Business 163
Dealing with Construction Permits 53
Registering Property 112
Getting Credit 104
Protecting Investors 128
Paying Taxes 103
Trading Across Borders 161
Enforcing Contracts 50
Resolving Insolvency 117

According to the 2006 Enterprise Surveys, access to finance, access to land, practices of the
informal sector, tax rate and administration, electricity, courts, political instability,
inadequately trained workforce, and corruption were the major obstacles to running a
business in Ethiopia (see figure below).

Figure 1: Major obstacles of running a business in Ethiopia

A recent study conducted by the World Bank on Chinese firms doing business in Ethiopia
also revealed similar findings. According to the survey findings, trade regulation and
customs clearance efficiency, perceived foreign exchange rate risks, government regulation,
tax administration inconsistency and inefficiency, labor education, and insufficient local
20
access to finance are the major are the six principal obstacles that Chinese invested
enterprises face in Ethiopia. In addition to the obstacles identified by previous studies,
crowding out of the private sector due to high government spending and slow economic
reform and liberalization were considered additional key challenges of the private sector in
the country. A brief discussion on each of the key obstacles to running business in Ethiopia
is presented below:

 Contract enforcement. With regard to contract enforcement, Ethiopia stands at 50

in the ranking of 185 economies and enforcing a contract takes 530 days, costs
15.2% of the value of the claim and requires 38 procedures. Nevertheless, its judicial
system is poorly staffed and inexperienced, particularly with respect to commercial
disputes (U.S. and Foreign Commercial Service and U.S. Department of State, 2012).

 Ease of starting business. Ethiopia stands at 163 in the ranking of 185 economies
on the ease of starting a business and starting a business requires 9 procedures,
takes 15 days, costs 135.3% of income per capita and requires paid-in minimum
capital of 249.1% of income per capita. Access to finance is one of the major
challenges of doing business in the country as evidenced by its 104th position in the
ranking of 185 economies on the ease of getting credit.

 Economic liberalization. The government of Ethiopia is engaged in a slow process

of economic reform and liberalization; and, the state remains heavily involved in
most economic sectors. The government retains control over the utilities sector, as
well as telecoms, and prohibits foreign ownership of banking, insurance, and
financial services companies. According to the 2012 Country Commercial Guide
published by .S. and Foreign Commercial Service and U.S. Department of State for
U.S. Companies, state-owned enterprises and political ruling-party owned entities
dominate the economic landscape, reducing room for the private sector to flourish,
although many of the subsidiaries of these entities themselves seek joint venture
and equity partners (U.S. and Foreign Commercial Service and U.S. Department of
State, 2012). Ethiopia imposes restrictions on foreign equity ownership in many
sectors, in particular the service industries. The list of sectors in which FDI is
prohibited includes the telecommunications industry (including fixed-line and
mobile/wireless services and infrastructure), the financial services industry
(insurance and banking), the media sectors (TV broadcasting and newspaper
publishing), the transportation industry, and the retail sector. According to the
Doing Business 2013, Ethiopia stands at 161 in the ranking of 185 economies on the
ease of trading across borders and exporting a standard container of goods requires

21
 7 documents, takes 42 days and costs $2160. Importing the same container of goods
requires 9 documents, takes 44 days and costs $2660.

 Tax administration. Customs and trade regulation are among the big constraints
for businesses that operate in Ethiopia, especially those frequently engaging in
international trade. The World Bank Enterprise Survey finds that the average time
to clear exports/imports through customs is 15.8/25.1 days in Ethiopia, about twice
long as the custom clearance time in SSA (7.9/13.8 days) and the worldwide level
(7.2/11.4 days). Firms, on average, make 31 tax payments a year, spend 306 hours a
year filing, preparing and paying taxes and pay total taxes amounting to 33.3% of
profit. Globally, Ethiopia stands at 103 in the ranking of 185 economies on the ease
of paying taxes, according to the Doing Business 2013 report. Due to the recent
change of custom clearance policies, time spent on custom clearance for Ethiopian
firms seem to have further expanded over recent months. As a result, trade and
customs regulation is regarded the main issue impeding Chinese FDI in Ethiopia.

While a more predictable and stable tax law practice would likely attract more
foreign investment, inconsistent tax law explanations and frequent law amendments
increase uncertainty in business operations for foreign companies. Firms in Ethiopia
suffer from inconsistency of tax law explanation and frequent law amendments. A
good illustration is the ongoing tax disputes on the payment of undistributed
dividend tax. Despite the continuous discussions and consultations with the
customs and revenues authority by the business community on the issue, the
authority didn’t budge and insisted on collecting the said tax which was considered
to lack any legal ground. In a very unexpected turn of event, however, senior
government officials that included the Prime Minister have recently reassured
members of the business community at the public-private dialogue forum that
dividends, which remain undistributed to shareholders, will not be taxed as tax on
dividends should only be paid after part of the net earnings are paid to
shareholders. Such inconsistencies of tax laws could greatly impede investments in
Ethiopia, as investors do not have a clear expectation for the future cash flows of
their new projects. The different interpretations of laws and rules, which cost
foreign investors extra time and resources to understand and follow policies
appropriately.

 Insufficient local access to finance. According to the 2006 Enterprise Surveys,

Access to Finance is one of the top three obstacles to running a business in Ethiopia.
Globally, according to the 2013 Doing Business report, Ethiopia stands at 104 in
the ranking of 185 economies on the ease of getting credit. Lack of access to finance
22
 is a hindrance for local businesses. Lending caps imposed on commercial banks in
order to control the money supply and inflation were lifted in April 2011 but
immediately replaced with a directive compelling banks to purchase five-year
central bank bills, at three percent interest, in an amount equal to 27% of total new
loans. As a result, commercial bank liquidity and capacity to supply credit has been
seriously threatened. The central bank recently reduced reserve and liquidity
requirements of commercial banks from 15% and 25% to 10% and 20%,
respectively, which is expected to at least temporarily result in an uptick in available
loans. The prohibition on foreign financial services institutions from operating in
Ethiopia and the undeveloped regulatory environment have resulted in a limited
and weak financial sector (U.S. and Foreign Commercial Service and U.S.
Department of State, 2012). 96.3% of loans in Ethiopia require collateral, compared
to the regional average of 80.4% (World Bank, 2006).
 Perceived foreign exchange rate risks deter investment. Restrictions on foreign
currency transaction and conversion affect business operations, and discourage
existing foreign invested enterprises to increase investments and prevent entry of
new investors. Large and unanticipated foreign exchange rate movements, like the
one that happened in August/September 2010 in Ethiopia, increase the risk of doing
business (World Bank, 2012). According to the survey, 90 percent of the firms
perceive foreign exchange rate as one of the largest risks doing business in Ethiopia,
and 78 percent of the firms experienced great losses in the past due to an
unexpected depreciation.
 Undeveloped supply chain: Due to the lack of local supply network, the production
processes of many firms in Ethiopia heavily rely on imported supplies and materials.
In 2011, 91.5 percent of the surveyed Chinese companies by the World Bank needed
to import materials and supplies, and 61 percent of their total material inputs and
supplies were from foreign origins. Unfortunately, current regulations are not
designed well enough to facilitate fast customs clearance of imported materials.
According to the finding of the World Bank survey conducted on Chinese firms
doing business in Ethiopia, the average customs clearance duration is 47 days, about
twice longer than that in China and Kenya, and one month longer than that in
Djibouti. The main reasons for the high import content are in the underdeveloped
supply chain systems in Ethiopia. Apart from unavailability of factors of production,
local sourcing is very costly for investors and enterprises often look for substitutes
from abroad. In situations where inputs are available locally, it is also often difficult
to obtain legal receipts from local suppliers of input material, even though the
suppliers are legal and formal entities. To avoid tax issues, companies then need to
spend more time to seek other suppliers and often settle for higher prices.

23
  Labor productivity. Labor education impedes productivity and skill transfer. A
largely illiterate and semi-skilled workforce suffers from low productivity levels
(U.S. and Foreign Commercial Service and U.S. Department of State, 2012). In order
to fill in the gap of inadequate education of local workers, firms are often required to
provide on-site trainings for Ethiopian employees which costs them money.

 Less developed infrastructure. A 2010 survey conducted by the World Bank on a

sample of countries revealed that infrastructure appears to be particularly
important for poor developing countries as it was found to have positive effects for
productivity, factor returns, and international integration. Nevertheless,
infrastructure obstacles, especially electricity as related to long waiting times to
actually be connected to desired services are among the biggest obstacles to do
business in Ethiopia. According to data collected by Doing Business 2013, getting
electricity in Ethiopia requires 4 procedures, and costs 2544.3% of income per
capita which puts the country 94th in the ranking of 185 economies on the ease of
getting electricity. Firms in Ethiopia expect to wait for 111.8 days to be connected to
the electricity network after their submission of service application, nearly three
times longer than the waiting time in Sub-Saharan Africa (SSA) (33.0 days) and the
world average (33.9 days) (World Bank, 2012). The state-owned
telecommunications company, Ethio Telecom (ET), offers slow, expensive, and
unreliable phone and Internet services (U.S. and Foreign Commercial Service and
U.S. Department of State, 2012).

5.3. Trade Relations

Ethiopia follows a strategy of increasing exports to facilitate growth. As an agrarian

economy, Ethiopia’s prime export still remains to be coffee. During the last decade the
Ethiopian government has been engaged in different types of trading agreements. These
agreements take the form of unilateral and bilateral agreements, regional trade agreements
and international trading agreements.

Up until 2002 E.C, Ethiopia signed general trade agreements with 13 individual countries in
Africa, Asia, Europe and Latin America (MoT, 2010) 4. Ethiopia has also been negotiating
with regional trading blocs including European Union Economic Partnership Agreement
(EPA), COMESA, IGAD Minimum Integration Plan, Sana’s Forum, and tripartite agreements

4
Ministry of Trade and Industry, 2011/12-2014/15 Strategic Plan, 2010
24
between Common Market for Eastern and Southern Africa (COMESA), Southern African
Development Community (SADC) and East African Community (EAC).

Bilateral trade agreements have also been entered by the Ethiopian government with
different countries. These bilateral trade agreements include agreements made with Sudan,
Kenya, Algeria, Tunisia, Libya, Nigeria, Equatorial Guinea, Iran, India Yemen, South Korea,
Malaysia, Russia and Cuba. These bilateral agreements do not relate to tax reliefs with the
exception of the agreement made with the Sudan, which was a preferential trade
agreement.

Some developed countries have given preferential and unique trade opportunities for least
developed countries (LDCs) such as Ethiopia. These include the Everything But Arms (EBA)
export right provided by the European Union (EU), the African Growth Opportunity Act
(AGAO) of the US, and the Generalized System of Preference (GSP) offered by other countries
such as China, Russia, Korea, Turkey, Canada and others allowing non-tariff trade
opportunities for LDCs. These offers create a fertile ground for the ECCSA to promote
Ethiopian products internationally, improve trade opportunities for local businesses, and
fulfill some of its main mandates.

Internationally, Ethiopia is in the process of becoming a member to the International Trade

Organization (WTO). Recent official reports of the government revealed that Ethiopia will
join WTO in two years.

5.4. Public Private Partnerships in Ethiopia

As partners in developmental efforts of a country, the private sector and the public sector
need a means to communicate their concerns in a formal way. The Ethiopian Public Private
Consultative Forum (EPPCF) was established for this purpose through a Memorandum of
Understand (MoU) with a mandate to be the main vehicle for public private consultation in
Ethiopia.

The Ethiopian Public Private Consultative Forum (EPPCF) has been mandated via a
Memorandum of Understand (MoU) signed between the Ministry of Trade and Industry
(MoTI) and the Ethiopian Chamber of Commerce and Sectoral Associations (ECCSA) in
2010 can be the main vehicle for public private consultation in Ethiopia. The EPPC has an
ambitious structure that covers three levels; Federal, State and Woreda. To implement the
structure, a Secretariat has been established within the ECCSA to provide a valuable
resource for private sector members to utilize the information and research emanating

25
from the EPPCF mechanism. To further support the implementation of the EPPCF, the
Ministry of Trade has assigned an EPPCF focal person which is expected to grow into a unit.

26
 6. STAKEHOLDER ANALYSIS
Effective identification of stakeholder with their needs and designing a strategy that meets
these needs plays a vital role in achieving planned results. ECCSA has both internal and
external stakeholders that it needs to satisfy which are essential for the successful
accomplishments of its mission. The internal stakeholders of the Chamber constitute the
staff/employees, management, and board of directors and members of the Chamber. The
external stakeholders of the chamber include the private sector operators, workers
associations, employers’ associations, trading partner countries and organizations, civil
society and local and federal governments. A brief discussion of the key stakeholders along
with their expectations is presented below:

 Members: Members of the Chamber include Representatives of Regional Chambers of

Commerce and Sectorial Associations, Representatives of the Chamber of the National
Sectorial Associations and Representatives of City Chambers of Commerce and Sectorial
Associations. The prime expectation of members from the Chamber is an appropriate
representation of the interests of the private sector. This could be manifested in terms
of proactively influencing the policies of the government in favour of the private sector.
Most members expressed the need for ECCSA to focus on bigger issues related to
private sector development and creation of favourable business environment in the
country.

 The private sector: As chambers and sectoral associations are membership-based

organizations, their most important stakeholders are the individual members
themselves for whose cause the associations exist. Hence, the private sector operators
are key stakeholders of ECCSA who expect effective representation from the association
they belong to which calls for coordinated effort among the chambers and associations
at all levels in the country. Discussions with key private sector operators revealed that
they want the chamber and the associations to involve more in policy advocacy to
create an enabling business environment in the country. Additionally, they have
mentioned a need for developing the capacity of the private sector through effective
training, research and consultancy.
 Board of Directors: ECCSA’s Board of Directors expect to see a strong chamber of
commerce that represents the interests of the private sector and one which can create a
vibrant private sector in the country. To do this, internal strengthening was emphasized
by the board members. One of these methods is capacitating the board members
through training and development programs which aid them to make better and sound
decisions in setting the direction of the board. Another expectation from the board of
directors in creating a Chamber fit for its mission is to modernize the internal working
procedures, manuals, structure, and employee performance management and
motivation system. The board also expects the chamber to improve its financial position
27
 through increasing the number of its members and engaging more in different sorts of
resource mobilization and income generating programs.

 Staff/Employees: Employees of the chamber articulated their need for a competitive

compensation system and salary packages. Besides, they highlighted the need for a
good working environment through the availability of a well-furnished and a well-
equipped office. An active participatory management style is another expectation of
employees which requires an involvement in decision makings in the Chamber.
Manifestations of this participation could be portrayed by the management’s effort to
seek and accept comments from the employees and making its decisions transparent
for the employees of the Chamber as expected by the employees. Staff have high
interest in what ECCSA does but their power is minimal to bring about significant
changes.

 Donors: The role of the Donor agencies is to provide developmental assistance and to
ensure that resources provided are allocated in accordance with the conditions of
signed agreements. This group represents both multilateral donors such as the United
Nations, the World Bank, and bilateral groups such as the Swedish Agency for
International Development (SIDA), the United States Agency for International
Development (USAID), the Department of International Development of the United
Kingdom (DFID), German Technical Cooperation, the Netherlands Development
Organization (SNV), and others. The primary interest of these donors with respect to
private sector development is to support the chamber and government in developing
conducive business environment, building the capacity of local business and
strengthening of institutions, trade and investment. Donors expect transparency and
accountability, effective resource utilization and sustainability of the outcomes of their
supports.
 Government Agencies: The government plays an important role in the functioning of
chambers and sectoral associations. This is particularly the case for Ethiopia where the
government plays major roles in the economic management of the country. Hence, the
government is a key stakeholder for ECCSA as policy maker and regular, business
owner, as well as facilitator and supporter of chambers and associations in Ethiopia.
The key federal level government stakeholders include Ministry of Finance and
Economic Development (MOFED), Ministry of Information Technology and
Communication; Ministry of Agriculture, National Bank of Ethiopia, Ministry of Tourism
and Culture, Ministry of Industry, Ethiopian Revenues and Customs Authority; Maritime
Authority, Ministry of Trade, Ethiopian Investment Agency, Ministry of Foreign affairs,
Federal Micro and Small Enterprise Agency (FEMSEDA), Ministry of Health, Ethiopian
Standards Agency, Ethiopian Commodity Exchange (ECX) and all these government
agencies at regional and local government levels. Interviews conducted with most of
these government counterparts revealed that the government seeks to work together
with the Chamber in attracting business priority areas, create a socially responsible
private sector by educating the private sector in business ethics and corporate social

28
 responsibility, resolve the problems of the private sector in collaboration with the
government, and so on.
 Civil society: The most common entities falling in this category are local and
international NGOs, interest groups, and professional associations. These groups
represent the interests of others and are often considered strong advocates of their
respective agenda. They can be of help for ECCSA and its members by advocating for
good governance and conducive policy framework. However, the civil society does not
seem to possess much power to influence policy decision making owning to the
restrictions imposed by the charities and societies proclamation that was passed in
2009.

 Employers’ Associations. Employers’ associations exist at national, regional and

sectoral levels in the country. The primary agenda of such organizations is to promote
the interest of employers of that particular industry. These associations can be strong
partners for ECCSA in coalition building. Although they may have high interest in ECCSA
activities, their power to influence its decision making may be minimal.

 Workers Associations: In Ethiopia, workers are organized along administrative and

sectoral lines. The Confederation of Ethiopian Trade Unions (CETU) is the national apex
organization which constitutes eight industry federations and the regional trade unions.
These workers associations defend the interests of their respective constituencies.
However, although they have low power to influence the activities of ECCSA and they
could have high interest.

 Foreign trade partner countries and regional and international trade

organizations: There are unilateral, bilateral, and multilateral trade arrangements that
Ethiopia has forged with other countries and organizations. There are bilateral trade
arrangements between Ethiopian and other individual countries such as the USA,
China,, Japan, Sudan, Kenya and others. There are also trade regimes with in regional
blocs such as Common Market for Eastern and Southern Africa (COMESA) Economic
Partnership Agreements which is a free trade arrangement between Africa and the
European Union (EU). At global level, Ethiopia has also applied for membership at the
World Trade Organization (WTO). All these and the many more not mentioned here
will closely follow any private sector reform in the country and have a stake in the
activities of ECCSA and its members. WTO is expected to have a significant influencing
power in the country in the coming two years.

The specific expectations of these key stakeholders can be seen in Appendix 3.

29
 7. STRATEGIC ANALYSIS (SWOT ANALYSIS)
Strategic analysis was done to determine the strategic position of ECCSA by analyzing its
internal and external environment. A brief summary of the strengths, weaknesses,
opportunities and threats/challenges that result from analysis of the internal and external-
environment is presented below:

7.1. Analysis of the External Environment

The purpose of the external assessment was to identify and assess changes and trends in
the general environment which have a significant impact on ECCSA for the strategic period.
These are the factors beyond the control of the organization that influence its choice of
direction and action, organizational structure and internal processes. These external
opportunities and threats were analyzed using the PESTLE (Political, Economic, Social,
Technological, Legal, and Environmental) framework.

Different opportunities for the ECCSA exist in the political, economic, social, technological,
legal and environmental atmospheres it is operating. These strategic opportunities that
could be exploited by the ECCSA in the coming five years of the strategic period are
presented as follows.
 Growing government recognition of business associations. The recognition by
the government that chambers do play a significant role in the promotion of trade,
industry and investment in the proclamation that re-established chambers of
commerce and sectoral associations is a key opportunity in Ethiopia. There is a clear
recognition that business associations play a crucial role in the economic
development of the country which must be taken advantage of by ECCSA to fulfill its
mandates. There is also a growing government interest to work with ECCSA.
 Availability of public-private consultative platforms. The Ethiopian Public
Private Consultative Forum (EPPCF) has been mandated via a Memorandum of
Understand (MoU) signed between the Ministry of Trade and Industry (MoTI) and
the Ethiopian Chamber of Commerce and Sectoral Associations (ECCSA) in 2010 can
be the main vehicle for public private consultation in Ethiopia. The EPPC has an
ambitious structure that covers three levels; Federal, State and Woreda. To
implement the structure, a Secretariat has been established within the ECCSA to
provide a valuable resource for private sector members to utilize the information
and research emanating from the EPPCF mechanism. To further support the
implementation of the EPPCF, the Ministry of Trade has assigned an EPPCF focal
30
 person which is expected to grow into a unit. This Unit will be responsible for
facilitating and coordinating government input into the EPPCF. These platforms
could also play an important role in improving the level of trust between the public
and private sector institutions, influencing policy decisions, and enhancing business
community support to business associations in the country.

 Legal mandate to represent the private sector. The fact that ECCSA is legally
mandated to represent the interests of the private sector can be considered an
important opportunity to mobilize the business community, attract funding, and
advocate for a favorable business environment in the country.

 Favorable investment policy. Experiences in successful countries around the

world show that foreign investment is instrumental to the facilitation of such a
structural transformation and to the maintenance of sustained and broad-based
economic development. Despite the perceived obstacles, Ethiopia is still an
attractive business destination for enterprises (World Bank, 2012). GOE seeks to
attract investors through incentives for priority export sectors - textiles/garments,
leather, horticulture/floriculture and agro-processing. During the last decade, the
Ethiopian government has continuously provided FDI incentives, such as tax
holidays and tariff-free policies for FDI equipment imports. According to a World
Bank survey conducted on Chinese firms in Ethiopia, these incentives have proved
to be a large motivation for Chinese firms’ investment in Ethiopia, especially for the
manufacturing industry. Data from the Ministry of Industry shows that foreign
investments have shown a steady increase over the past five years period of 1998-
2002E.C. During this period, foreign investments have shown an annual increase of
60.6% and 81.8 % in project number and capital amount respectively. The US State
Department investment climate survey report, citing the National Bank of Ethiopia
(NBE) revealed that the annual inflow of FDI increased from $150 million in 2005 to
$935 million during the period from January to September 2011. Government’s
increased interest to have public private consultations is also another enabling
environment for the Chamber to fulfill its mandates.

 Growing local economy and market. Limited market capacity and market
competition, cheap labor, cheap land and an expanding Ethiopian market are some
of the features that could describe the current state of the Ethiopian economy. The
fact that the production capacity in Ethiopia is still low, and the local market is
rapidly expanding could mean that the market is very attractive for foreign
investors. The growing economy could also boost private sector growth and
membership at chambers and business associations.
31
  Efforts to cut down on bureaucracy and rent-seeking in Ethiopia. According to a
World Bank report, senior managers in Ethiopia spend about half the time of those
in SSA countries in dealing with the requirements of government regulation. On
average, to deal with Ethiopian regulations requires 1.3 meetings per year per firm
for tax issues, compared with 2.7 meetings required in the SSA countries (World
Bank, 2012).

 Growing trading agreements and market integration. Up until 2002 E.C, Ethiopia
signed general trade agreements with 13 individual countries in Africa, Asia, Europe
and Latin America (MoT, 2010)5. A preferential trade agreement has also been
signed with Sudan which includes tariff reduction. The trade agreements promote
trade and investment, boost traders confidence, ensure that trade exchanges made
with the country have a legal ground. Ethiopia has also been negotiating with
regional trading blocs including European Union Economic Partnership Agreement
(EPA), COMESA, IGAD Minimum Integration Plan, Sana’s Forum, and tripartite
agreements between Common Market for Eastern and Southern Africa (COMESA),
Southern African Development Community (SADC) and East African Community
(EAC). Government sources revealed that Ethiopia may join COMESA free trade
agreement in 2014 and All Africa Free Trade Area in 2017. There also some interest
to join the East Africa Community that currently has five members.

Some developed countries have given preferential and unique trade opportunities
for least developed countries (LDCs) such as Ethiopia. These include the Everything
But Arms (EBA) export right provided by the European Union (EU), the African
Growth Opportunity Act (AGAO) of the US, and the Generalized System of Preference
(GSP) offered by other countries such as China, Russia, Korea, Turkey, Canada and
others allowing non-tariff trade opportunities for LDCs. These offers create a fertile
ground for the ECCSA to promote Ethiopian products internationally, improve trade
opportunities for local businesses, and fulfill some of its main mandates.
Government stakeholders believe that ECCSA should provide input to negotiations
the government is undertaking with governments and economic blocks and follow
up the realization of bilateral and multilateral agreements.

 WTO Accession. Ethiopia is acceding to become a member of WTO, since its

application in 2003, which is expected to come to an end in two years, according to
recent government press release. Relevant government officials were heard saying

5
Minsitry of Trade and Industry, 2011/12-2014/15 Strategic Plan, 2010
32
 that joining WTO which has over 160 member countries will be inevitable. The WTO
membership provides secure and predictable market access under the umbrella of
legally enforceable rules, which govern international trade. In addition, membership
to WTO is expected to bring several benefits with it for ECCSA and its members,
including handling of disputes constructively, freer trade that cut costs of trade,
economic growth, and good governance. ECCSA has several roles to play during the
final years of the country’s accession process ranging from strongly participating in
the negotiations to conducting research and building the capacity of its members to
help them understand the ramifications of the membership. It could also help the
government to successfully complete WTO accession negotiations and undertake
the domestic reforms that are to be made by contributing towards securing solid
consensus among major stakeholders. The provision of capacity building support
for private sector to improve understanding or capability in terms of trade policies
at the international and multilateral level is also an important area of intervention
for ECCSA during the coming two years. As representative of the private sector,
ECCSA is expected to play a leading role in Ethiopia’s accession process by providing
input to the government that could also help it earn certain position in the process.

 Relative political stability in Ethiopia. The Horn of Africa is one of the most
conflict-prone regions in Africa. These conflicts often led to war in different time
periods. However, political stability in the Horn of Africa is getting more stable as
time goes on. Despite continued instability in Somalia and persistent tensions along
the Ethiopia-Eritrea border, the Horn of Africa as a whole is making progress
towards improved regional stability and governance. Several stakeholders and
international organizations seem to agree that the Ethiopian government provides a
stable political environment for the firms to do business smoothly around the year.
And this relative stability will attract foreign investors and create exporting
opportunities for local investors creating strong market ties. Relative peace in the
area will also make it easier for the Chamber to promote trade and investment
because regional image is linked with security for doing business.

 High government commitment to private sector development. As stipulated in

the GTP, government considers the private sector as the engine for development
and expects more participation in industry, agriculture, health, education,
infrastructure, energy and other sectors. It also outlines objectives to develop the
capacity of the private sector in the industrial sector to create a competitive private
sector. The discussion with the various actors of government offices also
supplements this interest as the intention to work together was outlined by several
officials. These initiatives could be utilized to establish and improve smooth
33
 relationship with the government. Government sources indicate its interest to
increase the contribution of the industry to GDP by about more than 50%.

 Increasing number of registered investors. The Ethiopian Investment Agency

and regional Investment Offices licensed some 56,421 investment projects with an
aggregate capital of Birr 1.1 trillion between 1992/93 and 2010/11. Of these
projects, 47,420 (or 84.1 percent) were domestic, 8,896 (or 15.7 percent) foreign
and 105 (or 0.2 percent) public (NBE, 2011). In 2010/11, a total of 6,322 investment
projects with a combined capital of Birr 249.5 billion were approved, a record high
in a single year since 1992/93 (Ibid). Foreign direct investment (FDI) is also
growing rapidly as the government has given much increased encouragement to
Foreign Direct Investment (FDI) in various sectors of the economy. In the last few
years, FDI has been rising at a rate of 25% a year, with increasing amounts from
Saudi Arabia, India, China, Sudan and Turkey in particular (Ministry of Foreign
Affairs, 2013). The US Department of State (2012) investment climate survey
indicates that floriculture, horticulture, textile, and leather are the sectors that have
attracted the most FDI. Recently, commercial farming has attracted Indian, Saudi,
European, and U.S. investors. Hence, the increase in domestic and foreign
investment creates a prospect to increase the membership of member organizations
which could in turn benefit ECCSA.

 Diplomatic concentration in Addis Ababa. A number of international

organizations exist in the capital which creates favorable atmosphere for discussion
with concerned bodies. These opportunities could be exploited for the benefit of the
Chamber. The FGD with the key resource people indicated that this opportunity
could serve well in terms of creating business linkage and trade and investment
promotions. One of these opportunities is the presence of the Pan African Chamber
of Commerce’s office in Ethiopia. This opportunity affords a huge networking and
partnership potential in terms of experience sharing for the Chamber.

 Legal right to engage in policy advocacy. Unlike most kinds of civil society
organizations that are restricted to engage in advocacy and rights based
development activities by a proclamation passed in 2009, chambers of commerce
and sectoral associations in Ethiopia are not forbidden from engaging in such
activities as they were established in a separate proclamation. Considering the
country’s current context for civil society, this is a huge opportunity of ECCSA and
its members to effectively influence policy decisions and protect the interest of
member organizations. In addition, other difficult provisions made by the civil

34
 society proclamation such as allocation of at least 70 percent of the annual income
in operation activities do not apply for ECCSA and its members.

 Growing investment on national and regional infrastructure. The Ethiopian

government is investing significantly in very large-scale hydroelectric project
construction (using both external loans and its own resources). If successfully
completed, these projects could meet domestic electricity demands and produce a
significant surplus for export. This could solve the intermittent power outages that
used to force factories to cease operations. Much investment and attention has also
been given to road infrastructure. There is also regional infrastructure development
which eases access to goods and market.

 High donor interest to support the private sector and chambers. Different
international and bilateral organizations such as UNDP, World Bank, International
Finance Corporation, SIDA, DFID, and others are designing and implementing
programs to build the capacity of the private sector and business associations. This
is a great opportunity for ECCSA to mobilize funding and secure technical support so
as to improve the quantity and quality of its services, build members capacity and
meet their expectations, improve membership and so on.

i. Threats/Challenges:

The external environment where ECCSA operates also poses different kinds of challenges
and risks that could negatively impact its effort to meet its mission. Some of these threats
are already seen in the environment whereas the others are anticipated to occur in the
coming strategic period. For ECCSA to stay in business and accomplish its mission, it needs
to deal with these externally imposed existing and emerging external bottlenecks and risks.
The following are the likely challenges or threats the Chamber should deal with to fulfill its
mandate and achieve its strategic objectives:

 Declining position in ease of doing business in Ethiopia. Even though Ethiopia is

among the top fast growing economies in the world, according to the World Bank,
its position in its ease of business doing reports has been eroding in the last two
years. The World Bank’s recently released Doing Business 2013 report for Ethiopia
revealed that Ethiopia has slipped from the high point of 111th position in 2012
back to 127th in 2013 out of 185 economies ranked globally. By comparison,
Rwanda ranked 52 and the average for Sub-Saharan Africa was 140. Ethiopia
performed best on enforcing contracts and dealing with construction permits and
35
 worst on starting a business, trading across borders and protecting investors. The
report also revealed that starting a business there requires 9 procedures, takes 15
days, costs 135.3% of income per capita and requires paid-in minimum capital of
249.1% of income per capita which puts the country at 163 in the ranking of 185
economies on the ease of starting a business. Ethiopia also stands at 128 in the
ranking of 185 economies on the strength of investor protection index.
 Slow economic liberalization and high public investment: The government of
Ethiopia is engaged in a slow process of economic reform and liberalization; and, the
state remains heavily involved in most economic sectors. The government retains
control over the utilities sector, as well as telecoms, and prohibits foreign ownership
of banking, insurance, and financial services companies. According to the 2012
Country Commercial Guide published by .S. and Foreign Commercial Service and U.S.
Department of State for U.S. Companies, state-owned enterprises and political
ruling-party owned entities dominate the economic landscape, reducing room for
the private sector to flourish, although many of the subsidiaries of these entities
themselves seek joint venture and equity partners (U.S. and Foreign Commercial
Service and U.S. Department of State, 2012). Ethiopia imposes restrictions on
foreign equity ownership in many sectors, in particular the service industries. The
list of sectors in which FDI is prohibited includes the telecommunications industry
(including fixed-line and mobile/wireless services and infrastructure), the financial
services industry (insurance and banking), the media sectors (TV broadcasting and
newspaper publishing), the transportation industry, and the retail sector.
 Weak private sector and lack of awareness among the business community.
Another challenge to business associations is the general distrust they face from the
business community. Members do not feel that they own their organization and do
not yet trust it. They also feel that it is merely a promotion mechanism for those
who lead it. Governance of these associations is also not perceived to be
transparent. Lack of government support to the associations and also the lack of
enthusiasm for policy dialogue eroded support and understanding of the business
community for the chambers. The business community perceived that the
associations could not provide demand-driven programs and were merely
extensions of the government (ECCSA, 2013). Some stakeholders also believe that
the attitude of the public towards business has not changed. The private sector is
also less developed to provide adequate support to ECCSA.
 Establishment of parallel trade forums. The formation of such parallel
organization as “Traders forum,” “EPRDF Supporters Traders Association,” “Hidase
Traders Associations” has created confusion and it became even common to witness
antagonistic stand within the same sector on the same issue between various
representatives of the business communities. The creation of parallel forums may
36
 challenge the chamber to unite the business community around common issues,
recommendations, and policy alternatives. It also creates fragmentation of
membership as more than one advocacy group represents the same constituency.
 Unfavorable legal framework for chamber establishments: A major challenge of
the chamber that stakeholders believe is a major obstacle for the chamber to
function and meet the expectations of its stakeholders relates to the law which
provides for the organization of business associations. Proclamation No. 341/2003
currently recognizes the Ethiopian Chamber of Commerce and Sectoral
Associations, the Ethiopian Chamber of Sectoral Associations as well as regional and
woreda level offshoots and city chambers as the officially recognized
representatives of the business community. Such designations have left other
business organizations in a legal limbo and deprived them of legitimacy. The law
also rigidly dictates the way associations have to organize, creating conflict of
interest and depriving them of advantages of scale economies. Another challenge
that relates to the proclamation is the fact that chamber law and regulations limits
sectoral associations to those engaged in “directly productive” activities only,
sidelining those engaged in the service industry, which accounts for over 40 percent
of the GDP. This implies that the chamber law needs to be revisited to enable the
service industry to organize itself. Proclamation 341/2003 also suffers from
duplications of the provisions. For instance, the powers and duties of Regional
Chambers of Commerce and Sectoral Associations and Chambers of Sectoral
Associations are almost exact copies. The proclamation and the directive also
introduced double advantages in voting for sectoral associations and members and
encourage them to exercise dominance on members of the Service Sector. By
providing unequal voting advantages to sectoral associations and members, it also
seems to promote the voice of sectoral associations. Since in most cases the service
sector and the productive sector may not have similar issues and agendas to discuss,
conflicts of interest could arise inviting division and escalating differences among
members.

Membership to the chambers is voluntary in line with Article 31 of the constitution

which guarantees freedom of association, including the right not to associate which
results in a free-rider behavior where business people can take advantage of the
efforts of chambers or associations without contributing anything. Mandatory
membership could have helped chambers to have broad-based membership which
could also afford authoritative representation to businesses. Nevertheless,
consultations with government officials revealed that the government will not
support mandatory membership. The government doesn’t also seem to support
unitary organization for membership and argues that regional governments have
37
 the right and power to prescribe any form of associations. Owing to the provisions
of proclamation 341/2003, Chambers in Ethiopia are also subject to controls over
their decision making in that they have to conform to the parameters of public law
and operate under the supervision of the public authorities. The state also exercises
certain controls over the selection of chamber leaders, particularly in defining the
electoral procedures. It is the state that decides by statute how many
representatives are to be elected to a chamber and the way in which the chamber
seats are to be distributed amongst the different economic sectors.

 Difficult and unpredictable customs and trade regulations and bureaucracies.

Government procedures and paperwork are usually complicated and time-
consuming, although improvements have been made in recent years. The customs
clearance process is slow and imported goods are sometimes taxed at attributed
values instead of invoice values. According to the Doing Business 2013 report firms,
on average, make 31 tax payments a year, spend 306 hours a year filing, preparing
and paying taxes and pay total taxes amounting to 33.3% of profit. Globally, Ethiopia
stands at 103 in the ranking of 185 economies on the ease of paying taxes. The
World Bank Enterprise Survey finds that the average time to clear exports/imports
through customs is 15.8/25.1 days in Ethiopia, about twice long as the custom
clearance time in SSA (7.9/13.8 days) and the worldwide level (7.2/11.4 days). Due
to the recent change of custom clearance policies, time spent on custom clearance
for Ethiopian firms seem to have further expanded over recent months. A study
conducted by World Bank on Chinese firms doing business in Ethiopia revealed that
while the lack of local supply network forced Chinese firms in Ethiopia to heavily
rely on imported supplies and materials, the current regulations are not designed to
facilitate fast customs clearance of imported materials. As a result, trade and
customs regulation is regarded the main issue impeding Chinese FDI in Ethiopia.
There is also mismatch of tariff base value in that when collecting tariffs for
imported supplies, the customs authority often does not accept the documented
value from sellers and instead uses an international ‘standard price’ for the
imported goods to compute import tariffs accordingly which can be higher by as
much as twice the real value especially for imported products from countries that
have low prices. The GOE's de facto requirement that imports be transported by
state-owned Ethiopian Shipping Lines (ESL) has caused severe delivery delays and
high transportation costs for importers (U.S. and Foreign Commercial Service and
U.S. Department of State, 2012).
 Tax administration inconsistency and inefficiency. Inconsistent tax law
explanations and frequent law amendments increase uncertainty in business
operations for foreign companies. A more predictable and stable tax law practice
38
 would likely attract more foreign investment. Nevertheless, firms in Ethiopia suffer
from inconsistency of tax law explanation and frequent law amendments. A good
illustration is the ongoing tax disputes on the payment of dividend tax on retained
profit regardless of whether it is distributed to shareholders as dividends or not.
Despite the continuous discussions and consultations with the customs and
revenues authority by the business community on the issue, the authority didn’t
budge and insisted on collecting the said tax which was considered to lack any legal
ground. In a very unexpected turn of event, however, senior government officials
that included the Prime Minister have recently reassured members of the business
community at the public-private dialogue forum, held at the UNECA, on Thursday,
June 27, 2013 that dividends, which remain undistributed to shareholders, will not
be taxed as tax on dividends should only be paid after part of the net earnings are
paid to shareholders. The response from the senior government officials on the
issue was a complete reversal of the position held by authorities at the Ethiopian
Revenues and Customs Authority (ERCA), who, in the past, have claimed that their
views were supported by legal grounds. Such inconsistencies of tax laws could
greatly impede investments in Ethiopia, as investors do not have a clear expectation
for the future cash flows of their new projects. The different interpretations of laws
and rules, which cost foreign investors extra time and resources to understand and
follow policies appropriately. In addition, companies of all ownership and industry
types spend a significant portion of senior management time on government
relations, according to a World Bank Survey. For example, a survey conducted on
Chinese firms doing business in Ethiopia revealed that more than one-third of
senior management time in Chinese Ethiopian joint ventures is spent on these
activities. Other findings regarding government regulation show that 65 percent of
surveyed Chinese companies disagree with the sentence that “the court system is
fair, impartial and uncorrupted”. Likewise, 74 percent of surveyed Chinese
companies disagree that “Government officials’ interpretations of the laws and
regulations affecting their company are consistent and predictable”.
 Less developed infrastructure. A 2010 survey conducted by the World Bank on a
sample of countries revealed that infrastructure appears to be particularly
important for poor developing countries as it was found to have positive effects for
productivity, factor returns, and international integration. Nevertheless,
infrastructure obstacles, especially electricity as related to long waiting times to
actually be connected to desired services are among the biggest obstacles to do
business in Ethiopia. According to data collected by Doing Business 2013, getting
electricity in Ethiopia requires 4 procedures, and costs 2544.3% of income per
capita which puts the country 94th in the ranking of 185 economies on the ease of
getting electricity. Firms in Ethiopia expect to wait for 111.8 days to be connected to
39
 the electricity network after their submission of service application, nearly three
times longer than the waiting time in Sub-Saharan Africa (SSA) (33.0 days) and the
world average (33.9 days). Similar longer delays in obtaining water connections and
mainline telephone connections are also significant problems for doing business in
Ethiopia (World Bank, 2012). The state-owned telecommunications company, Ethio
Telecom (ET), offers slow, expensive, and unreliable phone and Internet services
(U.S. and Foreign Commercial Service and U.S. Department of State, 2012).
 Contract enforcement challenges: According to Doing Business 2013, Ethiopia
performed best on enforcing contracts. Globally, Ethiopia stands at 50 in the ranking
of 185 economies on the ease of enforcing contracts and enforcing a contract takes
530 days, costs 15.2% of the value of the claim and requires 38 procedures.
However, Ethiopia's judicial system is poorly staffed and inexperienced, particularly
with respect to commercial disputes (U.S. and Foreign Commercial Service and U.S.
Department of State, 2012).
 Low confidence of the government on the Chamber. Although recent trends
show a slight steady increase in cooperation between the government and the
chamber, many stakeholders indicate that the government’s confidence on the
chamber is not as satisfactory as it should be. This is evident in the Chamber limited
participation on policy issues and bilateral agreements. Owing to the legacy of its
previous leaders, some also fear that the Chamber may be seen a political
organization by the government.
 Growing public investment. The current Ethiopian government is following a
developmental state government. Conceptually, a developmental state government
plays an active role in guiding economic development and using the resources of the
country to meet the needs of the people (ETU, 2013). However, as per the FGD with
the Secretariats of member organizations, this active role of the government is
feared to create confusion between the free market economy and developmental
state thinking. The scale of public involvement is large: for the five-year GTP period,
the sum of budgetary government spending and off-budget spending by public
enterprises is programmed to reach ETB 1.26 trillion or an average of 41% of GDP,
disproportionately weighted to capital spending (Assefa, Bienen and Ciuriak; 2012).
The World Bank report also observes similar trends which reports that 19.7% of the
GDP in the year 2011-12 was accounted for public finances in Ethiopia.
State-owned enterprises dominate major sectors of the economy. There is state
monopoly or state-run dominance in sectors such as telecommunications, power,
banking, insurance, air transport, shipping, and sugar. The 2012 Investment climate
report on Ethiopia by the US department of state suggests that ruling party-affiliated
endowment companies have a strong presence in the ground transport, fertilizer,
and textile sectors. Some stakeholders argue that state-owned enterprises have
40
 considerable advantages over private firms, particularly in the realm of Ethiopia's
regulatory and bureaucratic environment, including ease of access to credit and
speedier customs clearance. Local business owners as well as foreign investors
complain of the lack of a level playing field when it comes to state-owned and party-
owned businesses (US Department of State, 2013).
 Lack of business association culture. Owing to the ideology of disregard to the
private sector initiative followed by the former regime is believed to have
suppressed independent association culture in the country. Chambers and
associations were meant for the benefit of the government, not members during the
previous government. Mandatory association membership is also believed to have
eroded associations’ ability to be effective representatives of the business
community’s interests. As a result, members do not seem to have owned and trusted
their associations (ECCSA/PSD Hub, 2009). In fact, the associations are not self-
initiated and demand driven. The lack of business community support to chambers
and associations might have stemmed from the belief that they either could not
provide demand driven programs and services or that they were merely extension
of the government as had been the norm in the past.
 Lack of adequate government support. Studies and many stakeholders argue that
there is a lack of disposition on the part of the policy makers to engage in open
debates with the business community which they believe have eroded support and
understanding of the need for the association movement within the private sector
(ECCSA/PSD HUB, 2009).
 Unethical practices among private sector operators. Corporate social
responsibility can add value in building the image of an organization in the eye of
the public and other stakeholders. Experts of the private sector and key resource
people consulted seem to agree the existence of unethical behaviors and practices
observed among private sector actors in the country. In response to this, they
suggested the need for ECCSA to educate the private sector about corporate social
responsibility so as to create an assertive and ethical private sector in the wider
economic platform.
 Growing corruption in public offices. Another challenging factor that could
impact private sector development and activities of business associations, according
to several stakeholders, was the growing corruption in different public offices of the
country. Studies by international organizations such as the World Bank also provide
the same. A negative impact is feared to prevail as a result of increased corruption in
the private sector because for one reason or another interaction of the private
sector with the public offices is bound to occur.
 Unfavorable land lease policy. According to the 2006 Enterprise Surveys, Access
to Land is one of the top three obstacles to running a business in Ethiopia. All land is
41
 owned by the state and cannot be purchased or sold, but can be leased for up to 99
years. A land-lease regulation passed in late 2011 places limits on duration of
construction projects, allows for revaluation of leases at a government-set
benchmark rate, places previously owned land (―old possessions‖) under
leasehold, and restricts transfer of leasehold rights. The land management policy the
country has recently adopted was not found conducive for business development by
many stakeholders. Currently, acquiring land is an arduous process and lease prices,
particularly within Addis Ababa, are expensive (US Embassy, 2012). Moreover,
some participants in the focus group discussion have labeled the policy as
unconstitutional and suggested that it should be one potential area ECCSA must
focus on in its upcoming strategic plan.
 Limited members’ capacity. With the exception of Addis Ababa Chamber of
Commerce and Sectoral Association, most members of ECCSA were considered too
weak to effectively engage in policy advocacy and other important activities that
could protect the interest of their members. Many of them lack qualified full time
staff and office facilities to run their day to day activities. Membership is not also
broad based to be seen as private sector representatives. Their income sources are
too limited to finance their programs and make membership contributions to
ECCSA. In fact, they expect much from ECCSA to build their capacity and mobilize
funds. Cohesion among members for a common goal was also questioned by many
stakeholders.
 High competition: As the government of Ethiopia is preparing to open up the
market for regional and global firms, competition is expected to be fierce in the
years to come. The government contends that it will not give preferential treatment
and protection to domestic firms as it used to be in the previous periods. Local
business lack modern systems and are unable to go along with the demands of the
modern world. With low productivity and quality and high prices, the private sector
will not be able to compete with global firms. Some stakeholders believe that
accession to WTO could also pose a serious challenge unless ECCSA is able to
develop competitiveness of its members and the business community at large.

7.2. Analysis of ECCSA’s Internal Environment

Internal environment analysis is about resources and competencies of ECCSA. Assessment

of ECCSA’s resources and competencies with reference to stakeholders’ expectations, its
mandate, and standard institutional capabilities resulted in the following strengths and
weakness:

7.2.1. Strengths and Weaknesses of ECCSA

42
Internal environment analysis is about resources and competencies of the Chamber.
Analysis ECCSA’s resources and competencies with reference to stakeholders’ expectations,
its mandate, and standard institutional capabilities are described below:

i.) Strengths

Strengths are resources and capabilities that enable an organization to perform well and
that need to be leveraged. Assessment of resources and capabilities of ECCSA has
uncovered following strategic strengths.

 Strengthened working relationship with government. Stakeholders agree that

there is a growing recognition of ECCSA by the government. The organization of
PPDFs by ECCSA with the involvement of key senior government officials can
illustrate such recognition. The recognition by the government that chambers play a
significant role in the promotion of trade, and investment and industry is a key
strength for Chamber to fulfill its mandates.

 Good image by donors and international institutions. Many stakeholders believe

that the name Chamber in itself is a recognized and international brand and most
donors positively support different initiatives taken by the Chamber. Among other
things, this recognition by donors could help the Chamber to secure funding and
improve its financial sustainability. For example, the International Finance
Corporation (IFC) supported the establishment of the Ethiopia Public-Private
Consultative Forum which brings together representatives of the private sector in a
structured dialogue with the government to improve the business environment. The
International Development Association (IDA) funded Private Sector Capacity Building
Project that provided support to many Ethiopian exporters to improve their
competitiveness and productivity through the matching grant scheme under
Ethiopia Competitiveness facility (World Bank, 2013).

 Good cause and brand: The Ethiopian private sector is still weak and business
associations are not strong enough to influence policy. This calls for the need to
have organizations such as ECCSA that could coordinate the sector actors, build
their capacity and improve their competitiveness. Globalization has also highlighted
the need for sound institutions and legal sectors. Put simply, without proper
institutions, companies and entire economies risk being left out of the global market
place. The creation of international standards are thus forcing companies to
reevaluate the way they do business, and business associations are key to the

43
 promotion of these standards. In addition, the name by itself is an international
brand which can be harnessed to forge international partnerships and raise fund.

 Strong linkage with funders and trade systems. ECCSA has a good linkage with
different partners in different areas of agreements. One of these partnerships is with
the Rhein-Main Chamber of Skilled Crafts financed by Federal German Ministry for
Economic Cooperation and Development (BMZ) for institutional capacity building
and to assist small and medium enterprises (SMEs) build their capacity through
technical vocational training program. This project will assist tackle challenges of
Chambers on different areas focusing on Chamber system, operational management
and services including advocacy. ECCSA has also another partnership agreement
with WTO to strengthen the institutional role of ECCSA in providing relevant
services in the context of WTO accession, as well as to target the members of ECCSA
directly, through improved service delivery on advocacy and trade information.
Besides, the UNDP under its “Enhanced Economic Growth project” supports the
chamber to strengthen knowledge and devising strategy for development and
utilization of economic growth corridors; enhance the public and private
partnership and promotion of the private sector; develop trade capacity; and
promote agro-industries. Apart from the aforementioned partners, ECCSA has
strong relationship with International Finance Corporation (IFC), Center for
International Private Enterprise (CIPE) and SIDA (ECCSA, 2013). These
relationships enable the Chamber to strengthen its internal capacities to meet the
needs of its stakeholders and also create opportunities to develop the capacities of
the private sector. Moreover, as a national chamber association, ECCSA has
relationships with different regional and continental chambers which could create
opportunities to learn best practices through experience sharing and promote
collaborative effort that could capacitate both the private sector and ECCSA.

 Long years of accumulated experience in representing the Ethiopian business

community. Since its establishment in 1947, the Chamber has been representing
the private sector which has endowed it a valuable more than 65 years of
experience in the area. This accumulated experience of the Chamber is an internal
strength to build upon as it enables the Chamber to understand the ups and downs
that the private sector is facing and administering business association. One of the
core tasks of the Chamber is organizing trade bazaars and exhibitions to promote
trade and investment, which the ECCSA has been conducting. The discussion result
from the representatives of the private sector, key resource people and secretariats
of the regional chamber of commerce and associations shows that this actually is
one of the strong areas of ECCSA. This annual trade exhibition plays a good role in
44
 promoting trade and helps the private sector become closer to the public at large.
ECCSA has been organizing international and national trade fairs for the private
sector to promote trade and investments.

 Good infrastructure and resources: ECCSA owns a building in the center of the
city that is worth millions of Birr. Apart from hosting its offices, the building is a
major source of revenue for the chamber. It also has printing press with good
equipment that could be exploited to generate and diversify income. A new building
is also planned to be constructed. Although much of the infrastructure of ECCSA
could be considered threshold resources that it needs to operate, ECCSA can take
advantage of these resources to mitigate its dependence on external funding and put
in place sustainable funding models.

ii.) Weaknesses

Weaknesses refer to resource and capability gaps that prohibit an organization from
performing well. The following strategic weaknesses were identified for ECCSA that it
needs to address to better fulfill its mandates in the years to come.

 Inadequate and unsustainable financing model. The Chamber’s budget also

reflects a lean operation, which makes it financially difficult for the organization to
increase its staff capacity or dedicate resources to additional or expanded Chamber
activities. ECCSA’s sources of income are mainly from its non-operating activities
accounting for close to 70% of its total annual income during the last four fiscal
years (from 2008/9 to 2011/12). Rent income accounts for close to half of the total
income (49%) followed by donation (7.8%) and advertisements (7.1%). Service or
operating income accounted for a third (30%) of the total income of ECCSA during
the last four years ending July 7, 2012. Although member organizations are required
to contribute 10% of their net annual income (after deduction of expenditures from
total income), their contribution accounted for less than 3% of the total income
during the last four years ending July 7, 2012. In fact, it was learned that only few
member organizations pay their membership dues. In sum, while the rental from
the re-possessed building is an important source of income for the chamber, its
much reliance on a single non-operating income cannot be considered a sustainable
financing strategy.

 Lack of systems that promote organizational learning. Many staff members

argue that ECCSA is not a learning organization that properly documents knowledge
and best practices produced internally or obtained from benchmarking visits
45
 elsewhere. They substantiated their argument with the fact that there is no formal
system of sharing lessons learned from foreign travel by board or staff members
with other staff. Issues discussed at management meetings are not also shared
among the staff. This could have great repercussion in affecting sense of
belongingness and hindering from having shared vision. A case in point was the fact
that many of the staff consulted did not know whether or not ECCSA has a strategic
plan as there was no opportunity for staff to actively participate in its development
and implementation.

 Small membership. ECCSA and its members are believed to have very small
membership base. Sources from the Ministry of Trade revealed that only 10% of
Ethiopian traders and producers are members of the chamber system in Ethiopia
which undermines its roles as the voice of the private sector in the country.
Although proclamation 341/2003 is blamed for the limited membership, ECCSA was
also considered weak in mobilizing the business community for membership.

 Previous leaders’ legacy. Some stakeholders argued that the legacy of some
leaders of chambers and associations in the country who were considered having
political agenda was also considered a challenge for these organizations to
effectively engage in policy advocacy. Hence, addressing organizational issues
inherited from the past and rebuilding sound governance structures will be critical
to effectively secure government support and influence policy decisions.

 Lack of dynamism: The manner in which election of board members is conducted

was blamed for the difficulty of bringing capable and visionary leaders as board
members. They also argue that the board lacks dynamism and proactiveness to deal
with the changing business climate and the demands of stakeholders. A case in
point, advocacy and several other activities of the chamber were also considered
reactive and not well structured and evidence based. Many staff were heard saying
that ECCSA is mostly engaged in firefighting such as lobbying for changes in laws
and policies after they have been formulated. Engagement and active participation
of the chamber in policy development was poorly rated by many stakeholders. The
extent to which the leadership, management and staff keeps abreast of changes in
the external environment was questioned by some stakeholders. Overall, ECCSA was
seen as an organization that is traditionally managed that failed to play a leadership
role and lack dynamism and responsiveness to changing circumstances and
expectations of stakeholders. Some stakeholders argue that the government is going
much ahead of ECCSA on several issues that affect the private sector such as
taxation and investment.
46
 Weak organizational capacity, leadership and systems: Many members argue
that the chamber lack strategic, visionary, and experienced leaders. Some board
members lack the right qualification and experience that the position demands.
Some stakeholders suggested the need to set minimum requirements in the areas of
education level achievements, experience and so on for a person to become board
members. Most importantly, the leadership and management practices are activity
oriented which made it difficult to measure the key contributions and impacts of its
activities in the country and on its members. Both the leadership and management
were also blamed for their focus on routine tasks rather than bigger and strategic
issues that could make a difference for private sector development and protection of
members’ interest. ECCSA was poorly rated on its implementation and performance
management capacity. Many stakeholders believe that the organization lack the
capacity to execute its plans. The capacity of ECCSA was also rated as limited by
several stakeholders to influence policy and government decisions and meet
stakeholders’ expectations. As much as ECCSA has competent staff in some areas, it
was also blamed for the lack of adequate staff capacity in others. Under-utilization of
organizational resources such as building and professionals were also identified as
part of ECCSA’s weakness. Internal working procedures are sub-standard and are
not up-to-date. Staff of ECCSA also indicated that while it is good that ECSSA has a
staff performance appraisal system, the appraisal if often conducted for the sake of
formality. According to them, staff promotion and salary increment issues do not
take the performance appraisal results in to consideration. There is also overlapping
of responsibilities by different departments as the same activity may be undertaken
by different departments. It was also learned that unity of command is lacking in
some situations as the existing organizational structure is not respected and
followed. Boundaries of authority are not clearly defined, hence, some leaders of the
Chamber seem to overstep the chain of command within ECCSA and give directions
to employees.

 Lack of systematic and formal M&E system. ECCSA lack a systematic and formal
monitoring and evaluation system. A monitoring and evaluation framework and
plan with clear results framework measurable indicators of performance along with
their data sources, definition, frequency of data collection, and responsible parties
was lacking. Many stakeholders agree that the actual implementation of the current
strategic plan was not properly and periodically monitored and evaluated. ECCSA’s
existing practice is also more focused on tracking activities rather than outcomes of
these activities.

47
 Weak governance and organizational structure. The Chamber’s organization
structure must be appropriate to deliver on its key priorities, particularly, as the
Chamber faces new challenges arising from the current economic climate and
increased pressure to deliver more value to members. Many stakeholders believe
that ECCSA has limited staff capacity to support increased programming in the
Chamber. The existing structure was believed to have resulted in overlapping of
responsibilities in some departments and duplication of effort that ultimately led to
wastage of resources. With the current structure, there is also a lack of clear
working relationship between board members and employees. There were
situations where the board gives instructions to staff bypassing the secretariat. Re-
organization of ECCSA was among the highly suggested initiatives by stakeholders.
The reorganization could also mean redefining the Board of Director roles and
responsibilities so that their time can be dedicated to providing strategic leadership
by restricting their involvement in managing the day-to-day operational details of
the Chamber. Following the approval of the new strategic plan, the Chamber could
explore using board sub-committees to oversee the major themes from the strategic
plan. A revised organizational structure is required to incorporate the clear
succession planning for the board of directors, and incorporate the need for the
injection of fresh-blood into leadership and management team on a regular basis.
The suggested restructuring will, however, require changes that are beyond the
control of the chamber such as advocating for changes in some of the provisions of
proclamation 341/2003 as related to the governance.

While it is true that the private sector constitutes a wide range of business areas in
the economy, representatives of the private sector indicate that the structure of the
Chamber fails to address these differences. Sector specific expertise and structure is
lacking at the Chamber to respond to the varied needs of its members. In fact, the
unavailability of sector specific experts (or office) within ECCSA was mentioned by
some stakeholders as the major factor that resulted in lower involvement and
contribution of the sectorial associations with the ECCSA. The Board’s structure
does not also constitute technical committees to address diverse needs of the
private sector.

 Loose relationship and communication with members and different

stakeholders. Although improving communication systems between ECCSA and
members was one of the strategic objectives of ECCSA in its current strategic plan,
several members mentioned the existence of weak and unhealthy communication
with members. The lack of effective and structured communication and active
engagement between ECCSA and its members was blamed for ECCSA’s difficulty to
48
 design demand driven programs and services and its ability to effectively market
the benefits of membership. Communication was also cited as a problem internally.
Some staff members argued that ECCSA doesn’t have a strong system of
communication that informs staff members at all levels. According to them, it is not
uncommon to hear about ECCSA from a stranger or over a media. Several
stakeholders argue that ECCSA has unstructured reporting system.

The relationship with the members is another weakness identified for the chamber
by several stakeholders. They argue that ECCSA didn’t create strong relationship
and facilitate harmony among members. Its support and working relationship with
sectoral associations was particularly considered weak. The support provided to
them by ECCSA was also considered inadequate. ECCSA was also blamed for not
supervising the activities of its members. They also wanted to be treated equally as
some members feel that some close and powerful members and chambers get
preferential treatment. Members are often unwilling to pay their fees to
chambers/associations as they do not see direct benefits and their expectations in
the delivery of services are generally unmet. In the absence of members’ ownership
and contribution, it would be difficult for ECCSA and its members to implement
their activities and programs in a sustainable manner. Their engagement was also
considered weak by many stakeholders as they don’t seem to own ECCSA and
believe that they could benefit from their membership. Some stakeholders fear that
some members may withdraw from ECCSA if the Chamber doesn’t live up to their
expectations. Although recent trends show a slight steady increase in cooperation
with the government, stakeholders believe that there is still loose relationship
between the government and Chamber.
 Poor publicity. The Chamber was considered absent in bigger national issues and
events. Many stakeholders believe that the chamber didn’t promote itself and its
services help increase visibility and help members increase their membership.

The following table summarizes the threats, opportunities, weaknesses and strengths of
the ECCSA.

Table 2: Summary of Threats, Opportunities, Weaknesses and Strengths

Opportunities Strengths
1. Growing government recognition of chambers and 1. Strengthened working
sector associations relationship with government
2. Legal mandate and availability of public-private 2. Good purpose and brand
consultative platforms for doing advocacy 3. Good image and growing
3. Favorable investment policy, growing economy linkage with development

49
 and national and international market partners and trade systems and
integration chambers
4. Relative political stability 4. Long years of accumulated
5. Growing investment in national and regional experience
infrastructure 5. Good infrastructure and
6. Entrepreneurship development opportunities resources
7. High diplomatic concentration in Addis Ababa to
promote trade and investment and mobilize
resources
Threats Weaknesses
1. Declining position in ease of doing business in 1. Inadequate and unsustainable
Ethiopia financing model
2. Slow economic liberalization and high public 2. Lack of dynamism and
investment organizational learning
3. Establishment of parallel trade forums 3. Weak organizational capacity,
4. Unfavorable legal framework for chamber leadership and management
establishments systems
5. Unethical practices among private sector 4. Lack of systematic and formal
operators M&E system (accountability)
6. Limited members’ capacity 5. Loose communication with
7. Low competitiveness of the private sector to cope members and different
up with market integration/opening up stakeholders
8. Lack of clear private sector development strategy 6. Limited career development
of the government and capacity building
9. Inconsistency and unfavorable policies opportunities/packages
10. Low confidence of the government on the private 7. Inadequate publicity and
sector visibility

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 8. MANDATES, MISSION, VISION AND CORE
VALUES OF ECCSA

8.1. ECCSA’s Mandate

Article 5 of the Chambers of Commerce and Sectorial Association Establishment
Proclamation 34/2003 states that ECCSA shall have the following powers and duties:

1. To encourage the establishment of Chambers at different levels and provide necessary

support
2. To find local and foreign markets for products and services
3. To participate with the concerned organs, in identifying export products, improving
their quality and quantity and in finding solutions to problems pertaining to trade
activities
4. To establish relations with foreign chambers in order to exchange information and
share experience
5. To organize or participate in local or foreign trade exhibitions upon obtaining license
from the concerned organ
6. To settle disputes arising out of business transactions between members, by way of
arbitration, when the parties so request
7. To issue product certificate of country of origin upon delegation by the Government
8. To prepare commercial gazettes, bulletins, reports, compile statistical information and
provide different trainings
9. To make members aware of business related government policies, proclamations,
regulations and directives; and participate at discussion forum prepared by the
Government;
10. To determine the contribution to be made by members
11. To charge fees for the services it provides
12. To own property, enter into contract, sue and be sued in its own name
13. To perform such other duties deemed necessary for the attainment of its purpose

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8.2. ECCSA’s Mission Statement
To provide a platform for unified voice of the private sector that can
play a leading role in the economy through advocacy, trade and
investment promotion and capacity building

8.3. Vision Statement

To see a private sector that plays a leading role in the economy by

putting in place an institutionally sustainable chamber by 2025

8.4. Core Values

i.) Commitment to excellence: Delivering more than what is expected through
innovation, learning, continuous improvement, and employee empowerment.
ii.) Corporate social responsibility: Commitment to ethical and responsible
organizational practices in employee relations, environmental stewardship,
community outreach and corporate governance.
iii.) Transparency and accountability: Openness to all stakeholders and obligation
to comply with agreed rules and standards.

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 9. STRATEGIC PRIORITIES
Analysis of ECCSA’s mandate, context, stakeholder expectations, and the internal and
external environment resulted in the following strategic priorities that should be pursued
during the coming five years:

i. Improving the institutional capacity of the chamber system

In order to effectively represent member’s interests and advocate for the creation of
enabling business environment in the country, there is need to enhance the institutional
capacity of the Chamber system. Under this priority, ECCSA plans to improve its
operational efficiency and service quality, strengthen evidence based decision making and
organizational learning, improve communication, publicity and visibility to facilitate
smooth information flow and strengthen its brand as the voice of the Ethiopian business,
enhance management and leadership capacity of itself and that of BMOs, provide an
organizational set-up that responds to the needs of members and the business community,
and improve the participation and engagement of members in its programs and activities.

ii. Promoting an enabling business environment

To promote an enabling business environment in the country, ECCSA will strengthen

advocacy role to enable better representation and increased influence with policy makers;
strengthen public-private consultations so as to improve government policies that enhance
ease of doing business in Ethiopia; advocate for the development and implementation of a
private sector strategy or roadmap; improve business community's awareness of the
government laws and policies; advocate for the issuance of a legal framework for Public
Private Partnership; institutionalize dispute resolutions mechanisms; and enhance the
working relationships and linkages with the government.

iii. Promoting trade and industry

ECCSA plans to promote trade and industry in the country by enhancing business linkages
and networking of the Ethiopian private sector with the rest of the World; strengthening
and diversifying BDS; developing an information system to serve as an independent data
source on Ethiopian trade and industry; supporting the improvement of the country's
export trade; promoting and attracting FDI and local investment in priority sectors of the
government; and enhancing the role of the chamber and the business community in
regional and international trade engagements.
53
 iv. Broadening resource base and strengthening financial
sustainability

ECCSA’s sources of income are mainly from its non-operating activities accounting for close
to 70% of its total annual income during the last four fiscal years (from 2008/9 to
2011/12). Rent income accounts for close to half of the total income (49%) followed by
donation (7.8%). Service or operating income accounted for a third (30%) of the total
income of ECCSA during the last four years ending July 7, 2012. Its operating income comes
from members’ contribution, issuance or certificates of origin, recommendation services,
legalization of agreements and trade fair. Income from certificates of origin and trade fair
are the major service incomes sources of the chamber. Members’ contribution accounted
for less than 3% of the total income during the last four years ending July 7, 2012. In sum,
while the rental from the re-possessed building is an important source of income for the
chamber, its much reliance on few non-operating sources of income cannot be considered a
sustainable financing strategy. ECCSA has planned to significantly increase income from
internal operating activities, and diversify its resource base and overall revenue through
proactive resource mobilization so as to effectively finance the implementation of this
strategic plan and improve financial sustainability.

v. Building the capacity of the private sector to be internationally

and locally competitive

Improving the competitiveness of the private sector both locally and internationally is
another priority of ECCSA. This is planned to be achieved by improving operational
efficiency of micro and small enterprises (MSEs), enhancing firm level competitiveness and
compliance to market requirements, and cultivating business ethics and corporate social
responsibility among the business community

54
 10. STRATEGIC OBJECTIVES
The following are the strategic objectives ECCA has planned to achieve in the coming five
years to execute the strategic priorities, realize its vision and accomplish its mission:

Table 3: Strategic Objectives

Strategic Priorities Strategic Objectives
Strategic Priority 1: 1. To improve operational efficiency and service quality level to
Improving the accepted standard by 2019
institutional capacity of 2. To strengthen evidence based decision making and promote
the chamber system organizational learning
3. To improve organizational visibility, publicity and strengthen
its brand as the voice of Ethiopian business
4. To improve management and leadership capacity of ECCSA and
members
5. To strengthen institutional capacity and organizational set-up in
a way that adequately responds to the requirements and needs
of members and the private sector.
6. To enhance members’ participation and engagement in ECCSA
programs and activities
Strategic Priority 2: 7. To strengthen public-private consultation so as to improve
Promoting an enabling government policies that enhance ease of doing business in
business environment Ethiopia
8. To ensure the development and adoption of private sector
strategy or roadmap by the government in the next three years
9. To popularize and ensure the issuance of a legal framework for
Public Private Partnership
10. To institutionalize dispute resolutions mechanisms for the
private sector by 2016
Strategic Priority 3: 11. To strengthen and diversify BDS
Promoting trade and 12. To serve as independent data/information source on Ethiopian
industry trade and industry by 2019
13. To promote export trade and enhance FDI in priority sectors
14. To enhance the role of the chamber and the business
community in regional and international trade engagements
Strategic Priority 4: 15. To increase and diversify internal and external income sources
Broadening resource
base and strengthening
financial sustainability
Strategic Priority 5: 16. To improve firm level competitiveness and compliance to
Building the capacity of market requirements
the private sector to be 17. To enhance business ethics and corporate social responsibility
internationally and among the business community
locally competitive

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 11. STRATEGIC INITIATIVES
ECCSA has identified strategic initiatives that are the means through which its vision is
translated into practice and strategic objectives are achieved. These initiatives guide the
identification of activities, tasks for annual action planning during the strategic period.

Table 4: Strategic initiatives

Strategic Priorities and
Objectives
Strategic Priority 1: Improving the institutional capacity of the chamber system
Strategic Objective 1.1. To improve
operational efficiency and service
quality level to accepted standard by
2019
Strategic Objective 1.2. To strengthen
evidence based decision making and
promote organizational learning
Strategic Objective 1.3. To improve
organizational visibility, publicity and
strengthen its brand as the voice of
Ethiopian business
Strategic Objective 1.4. To improve
management and leadership capacity
of ECCSA & BMOs
Strategic Objective 1.5. To strengthen
institutional capacity and
organizational set-up in a way that
adequately responds to the
requirements and needs of members
and the private sector.
Strategic Objective 1.6. To enhance
members’ participation and
engagement in ECCSA programs and
activities
Strategic Priority 2: Promoting an enabling business environment
Strategic Objective 2.1. To strengthen
public-private consultation so as to
improve government policies that
enhance ease of doing business in
Strategic Initiatives
 Study & Identify problems related to operational efficiency
introduce better management approach based on the
recommendation
 Put in place & implement feasible organizational structure
 Develop M&Es framework to properly measure
achievements and change
 Develop IT system that support M&E
 Develop and implement knowledge management system
 Develop & implement communication strategy to ensure
transparency, common understanding commitment
 Develop chamber portal system & video conferencing
 Define communication outreach
 Develop & implement electronic media to enhance visibility
 Upgrade by-laws and election procedures
 Strengthen chamber academy to enhance leadership and
managerial skills
 Exploit and use local and international training
opportunities for staff and management for quality
leadership and efficient services
 Develop & improve performance appraisal procedures
 Upgrade, standardized and implement institutional
operating manuals
 Establish new administrative, promotional and training
complex for ECCSA
 Design communication & feedback system that enables
members to actively participate in ECCSA programs
 Strengthen advocacy role to enable better representation
and increased influence with the federal government
 Enhance research, advocacy & presentation skills of
Chambers’ staff
56
 Strategic Priorities and
Objectives
Ethiopia
Strategic Objective 2.2. To ensure the
development and adoption of private
sector strategy or roadmap by the
government in the next three years
Strategic Objective 2.3. To popularize
and ensure the issuance of a legal
framework for Public Private
Partnership
Strategic Objective 2.4. To
institutionalize dispute resolutions
mechanisms for the private sector by
2016
Strategic Priority 3: Promoting trade and industry
Strategic Objective 3.1. To strengthen
and diversify BDS
Strategic Objective 3.2. To serve as
independent data/information source
on Ethiopian trade and industry by
2019
Strategic Objective 3.3. To promote
export trade and enhance FDI in
priority sectors
Strategic Objective 3.4. To enhance the
role of the chamber and the business
Strategic Initiatives
 Strengthen both advocacy & research arm with qualified
human resource
 Conduct research and development of business issues
 Publish and disseminate the research result to all
stakeholders
 Design proposal and mechanisms to reach & lobby decision
makers
 Support implementation of the private sector strategy
 Develop a proposal on the importance & how of PPP in the
development of the economy
 Present it to the government and make follow-up
 Develop partnership strategy and plan of action
 Cultivate partnership through joint planning,
complementing, and implementation
 Design and implement policy awareness strategy and plan of
action
 Enhance advocacy and negotiation skills of the leadership
 Conduct study and explore others experience on the
management of dispute settlement center
 Develop BDS strategy to support MSEs
 Coordinate BDS service provision
 Strengthen business information center
 Organize specialized and general trade fairs
 Prepare business directory
 Organize B2B
 Facilitate buyers - sellers networking /subcontracting
 Promote & Facilitate export trade
 Provide training and advisory services for members
 Interface the MIS system with the data bank
 Conduct regular data and information search
 Create platform for coordination of value chain actors
 Organize trade and investment promotion conferences
 Coordinate business to business meetings
 Facilitate market access
 Enhance members participation in international trade fairs
 Support producers & exporters in value addition
 Assess & develop resource profile of the country, prepare
publications & update website to promote investment
opportunities and organize investment promotional events
to promote FDI
 Develop strategy for import substitution
 Establish international trade unit within ECCSA Conduct
analysis on regional and WTO matters that have impacts on
57
 Strategic Priorities and Strategic Initiatives
Objectives
community in regional and the business
international trade engagements
Strategic Priority 4: Broadening resource base and strengthening financial
sustainability
Strategic Objective 4.1. To increase  Efficient and exhaustive use of the already identified
and diversify internal and external financial sources
income sources  Identify and implement new internal sources
 Design and implement new income sources or IGA
 Strengthen partnership and expand networking with
stakeholders
Strategic Priority 5: Building the capacity of the private sector to be internationally
and locally competitive
Strategic Objective 5.1. To  Identify operational efficiency gaps of MSEs
improve firm level  Enhance the capacity of member chambers to provide BDS to
competitiveness and compliance MSEs
to market requirements  Provide guidance and technical support for members
 Facilitate BDS access of the private sector
 Develop and implement MSE support strategy
 Forge/Strengthen working relationships with relevant
stakeholders
Strategic Objective 5.2. To  Conduct assessment and develop strategy to inform what systems
enhance business ethics and and procedures to be established
corporate social responsibility  Develop chamber –environment program
among the business community  Develop code of ethics under which the private sector can operate
 Develop awareness program on business ethics, green
economy/environment, and corruption

58
 12. IMPLEMENTATION PLANS
This strategic plan will be implemented over the next five years (2014/15-2018/19 G.C). The five-year implementation
schedule along with the amount of fund required to implement identified strategic initiatives is presented in the sections that
follow.

12.1. Five-Years Action Plan (Implementation Schedule)

This strategic plan will be implemented over the next five years (2014/15-2018/19 G.C). The high level five years
implementation plan with key strategic initiatives, implementation schedule, responsible persons, budget and sources of
funding are presented in the table below.

Table 5: Five Years High Level Implementation Schedule

STRATEGIC PRIORITIES, OBJECTIVES AND BUDGET IMPLIMENTATION PERIOD / FROM IMPLEMENTING SOURCE OF
INITIATIVES 2006-2010 EC/ BODY FINANCE

2006 2007 2008 2009 2010

Strategic Priority 1: Improving the institutional capacity of the chamber system

Strategic Objective 1.1. To improve operational 400,000.00
efficiency and service quality level to accepted
standard by 2019
Strategic Initiatives and Key Activities
1.1.1. Study and identify problems related to 300,000.00 X AF DP
operational efficiency
1.1.2. Design and implement better management 100,000.00 X AF ECCSA
approaches and tools and organizational structure
based on the recommendation

59
Strategic Objective 1.2. To strengthen evidence 350,000.00
based decision making and promote organizational
learning
Strategic Initiatives and Key Activities
1.2.1. Develop M&Es framework to properly measure 300,000.00 X PPBD Development
achievements and change partner
1.2.2. Develop IT system that support M&E X IT
1.2.3. Develop and implement knowledge 50,000.00 X X ALL ECCSA
management system
Strategic Objective 1.3 To improve organizational 8,195,000.00
visibility, publicity and strengthen its brand as the
voice of Ethiopian business
Strategic Initiatives and Key activities
1.3.1. Develop and implement communication and 20,000.00 X CIR ECCSA
media engagement strategy to ensure transparency,
common understanding commitment
1.3.2. Develop chamber portal system & video 7,300,000.00 X X X IT DP
conferencing
1.3.3. Organize and participate in key international, 500,000.00 X X X X X CIR DP
national and regional events
1.3.4. Develop & implement electronic media to 375,000.00 X X CIR Development
enhance visibility partner
Strategic Objective 1.4. To improve management 3,410,000.00
and leadership capacity of ECCSA and members
Strategic Initiatives and Key Activities
1.4.1. Upgrade by-laws and election procedures 10,000.00 X MS,RA,LA ECCSA
1.4.2. Strengthen chamber academy to enhance 3,000,000.00 X X X X X PPBD/CIR Development
leadership and managerial skills partner
1.4.3. Exploit and use local and international training 300,000.00 X X X X X AF/PPBD ECCSA/ Dev.
opportunities for staff and management for quality partners
leadership and efficient services
1.4.4. Develop and improve performance appraisal 100,000.00 X X X X X AF ECCSA
procedures

60
Strategic Objective 1.5. To strengthen institutional 100,100,000.00
capacity and organizational set-up in a way that
adequately responds to the requirements and
needs of members and the private sector.
Strategic Initiatives and Key Activities
1.5.1. Upgrade, standardize and implement 100,000.00 X AF/MS Development
institutional operating manuals partner
1.5.2. Establish new administrative, promotional and 100,000,000.00 X X X X X ALL Loan/ECCSA
training complex for ECCSA
Strategic Objective 1.6. To enhance members’ 120,000.00
participation and engagement in ECCSA programs
and activities
Strategic Initiatives and Key Activities
1.6.1. Design communication and feedback system that 120,000.00 X MS/CIR Development
enables members to actively participate in ECCSA partner
programs
1.6.2. Develop and implement members engagement X MS/CIR DP
strategy
Strategic Priority 2: Promoting an enabling business environment
Strategic Objective 2.1. To strengthen public- 8,450,000.00
private consultation so as to improve government
policies that enhance ease of doing business in
Ethiopia
Strategic Initiatives and Key Activities
2.1.1. Enhance research, advocacy & presentation 250,000.00 X X X X X ALL Development
skills of Chambers’ staff partner
2.1.2. Strengthen both advocacy & research arm with 75,000.00 X X X X X AF/RA ECCSA
qualified human resource
2.1.3. Conduct research and development of business 8,000,000.00 X X X X X RA ECCSA/ DP
issues
2.1.4. Publish and disseminate the research result to 125,000.00 X X X X X RA/CIR Development
all stakeholders Partner

61
Strategic Objective 2.2. To ensure the development 100,000.00
and implementation of private sector strategy or
roadmap by the government in the next three years
Strategic Initiatives and Key Activities
2.2.1. Design mechanisms to reach & lobby decision 100,000.00 X X X X X RA/CIR ECCSA/ DP
makers
Strategic Objective 2.3. To popularize and ensure 880,000.00
the issuance of a legal framework for Public
Private Partnership
Strategic Initiatives and Key Activities
2.3.1. Develop and popularize public-private 50,000.00 X RA/CIR ECCSA
partnership (PPP)
2.3.2. Sensitize government and other stakeholders on 20,000.00 X X RA/CIR ECCSA
PPP framework for issuance and implementation

2.3.3. Design policy awareness strategy and plan of 500,000.00 X X X X X ALL Dev. Partners
action

2.3.4. Develop and implement partnership strategy 60,000.00 X X X X X PPBD/RA ECCSA/ Dev.
and plan of action Partners

2.3.5. Establish and make functional board advisory X X X X X SGO ECCSA

technical committee

2.3.6. Enhance advocacy and negotiation skills of the 250,000.00 X X X X X RA/AF Dev. Partners
leadership

Strategic Objective 2.4. To institutionalize dispute 300,000.00

resolutions mechanisms for the private sector by
2019
Strategic Initiatives and Key Activities
2.4.1. Conduct study and explore others experience on 300,000.00 X X SGO/LA Dev. Partners
the management of dispute settlement center
Strategic Priority 3: Promoting trade and industry
Strategic Objective 3.1. To strengthen and diversify 39,550,000.00
BDS
Strategic Initiatives and Key Activities

62
3.1.1. Develop BDS strategy to support MSEs 25,000.00 X PPBD ECCSA
3.1.2. Coordinate BDS service provision 250,000.00 X X X X X PPBD/IT Dev. Partners
3.1.3. Strengthen business information center 400,000.00 X X X X X IT/PPBD Dev. Partners
3.1.4. Organize specialized and general trade fairs 30,000,000.00 X X X X X PO ECCSA
3.1.5. Prepare business directory 8,000,000.00 X X X X PPBD ECCSA
3.1.6. Organize B2B 125,000.00 X X X X X CIR ECCSA
3.1.7. Facilitate buyers – sellers networking X X X X IT/PPBD
/subcontracting (refer 1.3.2 for budget)
3.1.8. Promote & facilitate export trade 500,000.00 X X X X X PPBD Dev. Partners
3.1.9. Provide training and advisory services for 250,000.00 X X X X X PPBD Dev. Partners
members
Strategic Objective 3.2. To serve as independent 400,000.00
data source on Ethiopian trade and industry by
2019
Strategic Initiatives and Key Activities
3.2.1. Develop database 200,000.00 X IT/PPBD DP
3.2.2. Interface the MIS system with the data bank X X X X IT/PPBD
3.2.2. Conduct regular data and information search 200,000.00 X X X X ALL ECCSA
Strategic Objective 3.3. To promote FDI and local 7,430,000.00
investment in priority sectors in the country
Strategic Initiatives and Key Activities
3.3.1. Create platform for coordination of value chain 1,500,000.00 X X X X X RA Dev. Partners
actors
3.3.2. Organize trade and investment promotion 2,000,000.00 X X X X X CIR/PPBD ECCSA/ Dev.
conferences Partners
3.3.3. Coordinate business to business meetings 2,500,000.00 X X X X X CIR ECCSA/ Dev.
Partners
3.3.4. Facilitate market access 1,000,000.00 X X PPBD/RA Dev. Partners
3.3.5. Enhance members participation in international 200,000.00 X X X X CIR/PPBD Dev. Partners
trade fairs
3.3.6. Support producers & exporters in value addition 80,000.00 X X X X RA/PPBD Dev. Partners
3.3.7. Assess & develop resource profile of the 50,000.00 X X X X X CIR/IT ECCSA
country, prepare publications & update website to
63
promote investment opportunities and organize
investment promotional events to promote FDI
3.3.8. Develop and implement strategy for import 100,000.00 X X X X X CIR/PPBD/RA ECCSA
substitution
Strategic Objective 3.4. To enhance the role of the 300,000.00
chamber and the business community in regional
and international trade engagements
Strategic Initiatives and Key Activities
3.4.1. Strengthen existing awareness raising 150,000.00 X X X X RA/CIR Dev. Partners
mechanisms
3.4.2. Conduct analysis on regional and WTO matters X X X X X RA DP
that have impacts on the business
3.4.3. Proactively conduct and share studies that 150,000.00 X X X X RA DP
reflect the interest of the private sector
Strategic Priority 4: Broadening resource base and strengthening financial sustainability
Strategic Objective 4.1. To increase and diversify 2,600,000.00
internal and external income sources
Strategic Initiatives and Key Activities
4.1.1. Efficient and exhaustive use of the already 50,000.00 X X X X X PPBD ECCSA
identified financial sources
4.1.2. Design and implement new income sources or 2,000,000.00 X X X X PPBD/AF Dev. Partners
engage in income generating activities (IGA)
4.1.3. Strengthen partnership and expand networking 500,000.00 X X X X X PPBD Dev. Partners
with stakeholders
4.1.4. Develop and implement funding and income 50,000.00 X PPBD ECCSA
generating strategy
Strategic Priority 5: Building the capacity of the private sector to be internationally and locally
competitive
Strategic Objective 5.1. To improve firm level 2,000,000.00
competitiveness and compliance to market
requirements
Strategic Initiatives and Key Activities
5.1.1. Identify operational efficiency gaps of MSEs 400,000.00 X X X X PPBD/MS Dev. Partners
5.1.2. Enhance the capacity of member chambers to 600,000.00 X X X X X PPBD/MS Dev. Partners
provide BDS to MSEs
64
5.1.3. Provide guidance and technical support for 400,000.00 X X X X ALL Dev. Partners
members
5.1.4. Facilitate BDS access of the private sector 50,000.00 X X X X X PPBD/MS ECCSA
5.1.5. Develop and implement MSE support strategy 500,000.00 X X X X X PPBD DP
5.1.6. Forge/Strengthen working relationships with 50,000.00 X X X X X PPBD ECCSA
relevant stakeholders
Strategic Objective 5.2. To enhance business ethics 365,000.00
and corporate social responsibility among the
business community
Strategic Initiatives and Key Activities
5.2.1. Conduct assessment and develop strategy to 15,000.00 X MS ECCSA
inform what systems and procedures to be established
5.2.2. Develop chamber –environment program 50,000.00 X X X X PPBD ECCSA/ DP.

5.2.3. Develop code of ethics under which the private MS Dev. Par.
sector can operate 150,000.00 X
5.2.4. Develop awareness program on business ethics, 150,000.00 X X X X X MS/CIR Dev. Par.
green economy/environment, and corruption

65
 12.2. Budget and Financing
The five years strategic plan requires huge resources requiring a total investment of
Ethiopian Birr 175 million. Close to a third of the five year budget will be spent towards
institutional capacity building of the Chamber system (64%). Over a quarter of the five year
budget is appropriated for promotion of trade and industry (see table below).

Table 6: Five-Year Budget Allocation by Strategic Priority and Objective

Strategic Objectives Budget Percent

Strategic Priority 1: Improving the institutional 112,575,000.00 64.3%

capacity of the chamber system
1.1. To improve operational efficiency and service 400,000.00 0.2%
quality level to accepted standard by 2019
1.2. To strengthen evidence based decision making and 350,000.00 0.2%
promote organizational learning
1.3. To improve organizational visibility, publicity and 8,195,000.00 4.7%
strengthen its brand as the voice of Ethiopian
business
1.4. To improve management and leadership capacity of 3,410,000.00 1.9%
ECCSA and members
1.5. To strengthen institutional capacity and 100,100,000.00 57.2%
organizational set-up in a way that adequately
responds to the requirements and needs of members
and the private sector.
1.6. To enhance members’ participation and engagement 120,000.00 0.1%
in ECCSA programs and activities
Strategic Priority 2: Promoting an enabling business 9,730,000.00 5.6%
environment
2.1. To strengthen public-private consultation so as to 8,450,000.00 4.8%
improve government policies that enhance ease of
doing business in Ethiopia
2.2. To ensure the development and adoption of private 100,000.00 0.1%
sector strategy or roadmap by the government in the
next three years
2.3. To popularize and ensure the issuance of a legal 880,000.00 0.5%
framework for Public Private Partnership
2.4. To institutionalize dispute resolutions mechanisms 300,000.00 0.2%
for the private sector by 2016

66
 Strategic Priority 3: Promoting trade and industry 47,680,000.00 27.3%
3.1. To strengthen and diversify BDS 39,550,000.00 22.6%
3.2. To serve as independent data/information source on 400,000.00 0.2%
Ethiopian trade and industry by 2019
3.3. To promote export trade and enhance FDI in priority 7,430,000.00 4.2%
sectors
3.4. To enhance the role of the chamber and the business 300,000.00 0.2%
community in regional and international trade
engagements
Strategic Priority 4: Broadening resource base and 2,600,000.00 1.5%
strengthening financial sustainability
4.1. To increase and diversify internal and external 2,600,000.00 1.5%
income sources
Strategic Priority 5: Building the capacity of the 2,365,0000.00 2.3%
private sector to be internationally and locally
competitive
5.1. To improve firm level competitiveness and 2,000,000.00 1.1%
compliance to market requirements
5.2. To enhance business ethics and corporate social 365,000.00 0.2%
responsibility among the business community
Total 174,950,000.00 100%

With respect to financing, implementation of ECCSA’s next five years strategic plan will be
primarily financed by bank loans by pledging its building and other fixed assets as
collateral. Funding from loan and internal sources is expected to finance 81% of the total
budget while the remaining 19% is believed to be provided by development partners (see
table 7 below). During the strategic period, planned interventions to increase internal
income is expected to raise significant revenue to finance a relatively larger portion of the
total five year budget. Nevertheless, while ECCSA will work towards achieving financial
sustainability, the large sum of money required to implement the strategic plan will force it
to depend mainly from external sources of financing such as bank loans and development
partners.
Table 7: Funding Sources
Financed by: Amount Percentage
ECCSA and Lenders 142,150,000.00 19%
Development Partners 32,800,000.00 81%
Total 174,950,000.00 100%

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 13. MONITORING AND EVALUATION (M&E)
Monitoring and evaluation is an essential element in a strategic plan that should be thought
through at the design stage. Apart from tracking progress, M&E will also be vital in
reviewing and, if necessary, re-directing the strategic plan. The monitoring and evaluation
of the implementation of this strategic plan will be based on the M&E framework that will
be developed in the first year of the implementation. The framework is expected to set out
the M&E objectives, results framework, M&E plan with clearly defined performance
indicators, frequency of data collection, data source and methodology, responsible body
and so on, institutional arrangement and roles, data management and analysis, data
collection and reporting tools and report dissemination mechanisms. The framework is
expected to be developed based on existing M&E practices and systems of ECCSA and in
consultation with relevant stakeholders. An M&E implementation plan along with a
separate budget should be prepared and included the organization’s overall annual work
plan and budget.

ECCA board is expected to follow-up the implementation of the strategic plan. Annual plans
with quarterly targets and budgets approved by the General Assembly will be the basis for
monitoring the day to day implementation of the strategic plan. Quarterly progress reports
along with financial reports will be reviewed by management and the board to assess
progress to date and take remedial actions as appropriate. An interim progress report
containing the first three quarters progress and financial reports should be prepared at the
beginning of the fourth quarter every fiscal year and reviewed by both management and
board before the preparation of the next year’s annual plan and budget. The annual
progress and financial report should also be prepared during the first month of the new
fiscal year and approved by both management and board. The approved financial and
performance report should then be presented to the General Assembly for approval along
with the annual plan and budget for the new year.

Apart from the routine data that will be collected through the existing administrative
system, surveys and research may be required periodically when more in-depth data is
required to complement routine data collection. In addition, a midterm review half way
through implementation of the strategic plan and a summative evaluation in 2019 are
recommended to assess the achievements of the strategic plan and document lessons
learnt.

Pending the development of a full blown M&E framework for the Association, the
monitoring and evaluation of the strategic plan will be based on the M&E plan presented in
the table below. Explanations and operational definitions of the performance indicators can
be seen in Appendix 5.

68

Strategic Priorities and
Objectives
Strategic Priority 1: Improving the institutional capacity of the chamber system
1. To improve operational
efficiency and service
quality level to accepted
standard by 2019
2. To strengthen evidence
based decision making and
promote organizational
learning
3. To improve organizational
visibility, publicity and
strengthen its brand as the
voice of Ethiopian business
Table 8: Performance Outcomes and Indicators
Outcomes Indicators Indicator Baseline Target
definition/formula
Improved productivity 1. Annual percentage increase in [(∑WiSSi)/∑Wi]*100 NBS 7%
Increased satisfaction of clients and members satisfaction ©weighted average on
stakeholders on services on service quality stakeholders
provided satisfaction
Wider range of services
available 2. Annual percentage increase [(CY-PY)/PY]*100 5%
in service users
3. Percentage reduction in [(AC1-AC0)/AC1]*100 4%
administrative costs for services
rendered
Efficient and integrated 4. Put in place M&E system time 2007
information systems, data 5. Number of best practices NUMBER 35
collection and reporting documented, made accessible and
systems and improved data applied
demand and use at all levels 6. % of internal and external (AT/ST)*100 100%
reports delivered on time.
A vibrant chamber 7. Percentage Increase media [(MC1- 5%
Strong visibility of ECCSA in coverage MC0)/MC0]*100
the media, public and private
sector
Increased demand for 8. Annual Percentage increase in [(NP1-NP0)/NP0]*100 5%
service delivery by members, the number of partnerships with
policy makers and other partners
stakeholders
Established links with key 9. % increase in attendance at [(A1-A0)/A0]*100 20%
media houses at regional and events organized by ECCSA
national levels leading to
greater media coverage
69
 Strategic Priorities and
Objectives
4. To improve management
and leadership capacity of
ECCSA and members
Outcomes Indicators Indicator Baseline Target
definition/formula
Chambers with effective 10. % of members that perform (ANM/ENM)*100 100%
governance, leadership and election based on proclamation &
management at all levels bylaw
Increased representation of 11. number member chambers NUMBER 18.00
business community and with upgraded bylaws
membership of members
By-laws and election 12. Rate of staff turnover (NSR/RS)*100 0%
procedures upgraded
Capable board members
become board members of
chambers at all levels

Capable, active and 13. Percent increase in [(M1-M0)/M0]*100 25%

5. To strengthen institutional
capacity and
organizational set-up in a
way that adequately
responds to the
requirements and needs of
members and the private
sector.
committed leadership focused
on the key roles of strategic
oversight, financial and
performance monitoring, and
accountability to stakeholders
Preparation for new
administrative, promotional
and training complex for ECCSA
finalized and construction
started
Organizational operational
manuals and policies updated
Improved infrastructure
membership at member chambers
14. Number of required NUMBER 5
operational manuals developed,
updated and operationalized
15. Weighted average percentage [(∑Wiai)/∑Wi]*100 100%
of implementation of planned
activities
16. Preparation for new TIME 2009
administrative, promotional and
training complex for ECCSA
finalized and construction started

70
 Strategic Priorities and Outcomes Indicators Indicator Baseline Target
Objectives definition/formula
6. To enhance members’ A chamber that has all 17. Percentage increase in [(mm1- 5%
participation and inclusive and effective members that participate in mm0)/mm0]*100 18
engagement in ECCSA participation mechanisms at all meetings and engagement in number 18
programs and activities levels special initiatives number
· Increased ownership and 18. number of aligned strategic
participation of members in plan documents with ECCSAS
planning and decision making 19. number of members that share
· Harmonization of members costs for meetings & special
activities initiatives
· Sponsoring and cost
sharing
· Increased collaboration and
networking among members
· Exchange visits and
information-sharing forums
among members
Strategic Priority 2: Promoting an enabling business environment
7. To strengthen public- Public-private dialogue at 1. Number of proposals/agendas number 65
private consultation so as national and regional levels acted upon
to improve government Ease of doing business
policies that enhance ease
Improved business
of doing business in
community's awareness of the
Ethiopia
government laws and policies
Working relationships and
linkages with the federal and
regional governments
maintained and enhanced
Strong and functional 2. Improved ranking of country rank 5
linkages with federal and on ease of doing business
regional governments

71
 Strategic Priorities and Outcomes Indicators Indicator Baseline Target
Objectives definition/formula
ECCSA’s advocacy role to 3. Number of business number 10000
enable better representation community members that (20m/y*100p/m*5yr)
and increased influence with participated in awareness raising
the federal and regional campaigns
governments
Inclusion of members as 4. Number of awareness raising number 20
stakeholders in decision campaigns organized (1/q*4/y*5y)
making organs of regional
governments
Position papers by ECCSA on 5. Rate of awareness created (RUAC/RUBC)*100 90%
legal and policy issues
Proposals for revisions to 6. Number of public-private number 6
existing chamber laws and consultation forums organized
policies prepared and
presented to government and
enabling legal framework
enacted
Private sector development
given high priority in
government plans and resource
allocation at all levels
Development of laws and 7. Number of MOUs signed with number 7
policies reflecting chambers relevant federal and regional
and business community inputs government agencies and acted
upon
Increased advocacy capacity 8. Chamber establishment year 2007
within the chamber system proclamation revised
8. To ensure the development Private sector roadmap 9. Private sector roadmap year 2008
and adoption of private developed and adopted developed and adopted
sector strategy or roadmap
by the government in the
next three years

72
 Strategic Priorities and Outcomes Indicators Indicator Baseline Target
Objectives definition/formula
9. To popularize and ensure Strong public-private 10. Issuance of legal framework year 2007
the issuance of a legal partnership for Public Private Partnership
framework for Public
Private Partnership
10. To institutionalize Disputes among business 11. Dispute resolutions year 2007
dispute resolutions community systematically mechanisms institutionalized
mechanisms for the private resolved 12. Number of disputes resolved number (1pq*4py*3y) 12
sector by 2016
Strategic Priority 3: Promoting trade and industry
11. To strengthen and Improved access to finance, 1. Number of business number 1500
diversify BDS markets and technology relationships and linkages created (20s/yr*15p/s*5yr)
Enhanced business linkages
and networking of the
Ethiopian private sector with
the rest of the World
Competitive and informed 2. Number of business firms that number 2000/yr
business community received BDS
12. To serve as Institutionalized, 3. Infrastructure set/developed year 2007
independent trustworthy, and independent 4. Commencement of periodic year 2008
data/information source information for the private publication
on Ethiopian trade and sector
industry by 2019
13. To promote export Increased export revenue 5. Number of updated exporters number 1000/yr
trade and enhance FDI in Enhanced awareness of guide published and distributed
priority sectors technical requirements for
export markets among business
community
Increased awareness of the 6. Number of training given on number 400
potential opportunities export trade (20pq*4qpy*5y)
available
Increased FDI 7. Percentage increase in [(IRL1-IRL0)/IRL0]*100 20%
foreign and local investors that
receive investment license

73
 Strategic Priorities and
Objectives
14. To enhance the role of
the chamber and the
business community in
regional and international
trade engagements
Strategic Priority 4: Broadening resource base and strengthening financial sustainability
15. To increase and
diversify internal and
external income sources
Strategic Priority 5: Building the capacity of the private sector to be internationally and locally competitive
16. To improve firm level
competitiveness and
compliance to market
requirements
Outcomes Indicators Indicator Baseline Target
definition/formula
Increased local investment 8. Number of investment forums number 10
in priority sectors organized and hosted (2pyr*5yr)
Increased engagement of 9. Number of regional and number 10
ECCSA and business international trade negotiations (2n/yr*5yr)
community in regional and attended by ECCSA
international trade
negotiations
Increased number of 10. Percent increase in the [(PSPBTA1-PSPBTA0) 30%
businesses taking advantages /PSPBTA0]*100
participation of private sector on
of benefits of trade and other events organized during bilateral
agreements trade agreements
Broader funding base 1. annual % increase of income [(I1-I0)/I0]*100 10%
Increase self-generated
income
Increased financial and 2. Proportion of self-generated (SGI/TI)*100 80%
operational self-sufficiency income from total annual revenue
Efficient and competitive 1. Number of firms supported number 300.00
MSE through value chain based BDS (5s/yr*4f/s*2i/f*5yr)
Increased BDS Improved (disaggregated by firm size- MSE,)
quality of locally produced
products
Production costs of local 2. Increased number of members [(Nm1- 25%
firms become comparable to to city chambers Nm0)/Nm0]*100
foreign firms
3. annual percentage reduction on [(RAC1- sectors 5%
RAC0)/RAC1]/WA*100
administrative costs compared to identified
world average ( by sector) @ 5.1
74
 Strategic Priorities and Outcomes Indicators Indicator Baseline Target
Objectives definition/formula
17. To enhance business Increased accountability and 4. Number of business number 10000
ethics and corporate social transparency among business community members reached (
responsibility among the community members through awareness raising 20m/yr*100p/m*5yr)
business community campaigns
Good Ethical business 5. Number of firms with code of number 20
practices conduct and CSR activities (4fpyr*5yr)

75
APPENDICES

76
 Appendix 1) List of ECCSA staff that participated in FGD

S/N Name of Staff Position in the Organization

1. Wubshet Zegeye Marketing Expert
2. Bezenawork W/Medhin Assistant to the President
3. Ato Melaku Juhar Trade and Investment Promotion Specialist
4. Haria W/Gebriel IT Specialist
5. Yohnnes Tamachew Property Management
6. Efrim Mesfin Senior Economist
7. Yared melese Business Development Specialist
8. Adinew Bekele Membership Coordinator
9. Endale Assefa Public Relations Specialist
10. Meskerm Asefa Secretary
11. Meseret Tefera Secretary
12. Biruk Tesfaye Storekeeper
13. Fekadu Asnake Driver
14. Tibebeu Tadesse Striper Camera
15. Masresha Tekelu Operator
16. Yeshumnesh Mekonnen
17. Tarekegn Wolde Maintenance

77
 Appendix 2) List of Key External Stakeholders Consulted
Name Position
1. Geremew Ayalew Director, Trade Negotiations
Department
2. Ayenew Director, Planning
3. Tewodros Tourism Stakeholders
Habtamu Relation Expert
4. Mirkena Abdeta Tourism Promotion Expert
5. Biruk --
6. Hailegiorgis Planning and Budget
Feleke Preparation Expert
7. Mehari Mengistu Director, Corporate Plan
Directorate
8. Yilma Mengistu Basic and General Standard
Development Team Leader
9. Tesfaye Eneke Agriculture and Food
Standards Development
Team Leader
10. Getahun Negash Head, Public Relations
11. Getu Alemu Sectoral Association Support
Team Leader
12. Kirkos Kidanu Vice Director, Plan and
Program Development
Directorate
13. Sisay Birhanu Director, Planning and
Performance Monitoring
Directorate
14. Aster Seyfu Facilitation Sector Expert
15. Zeruihen Facilitation Sector Expert
16. Melakm Facilitation Sector Expert
17. MulugetaAyalew Public Relation and Ethiopian Bankers Association
Networking Officer
18. NegalignMuleta Federation Director
19. Solomon Alayu Senior expert
20. Mekbib Tilahun Senior expert
Organization
Ministry of Trade
Ministry of Trade
Ministry of Tourism and Culture
Ministry of Tourism and Culture
Ministry of Industry
Ministry of Education
National Bank of Ethiopia
Ethiopian Standards Agency
Ethiopian Standards Agency
Ethiopian Investment Agency
Addis Ababa Trade and Industry
Bureau
Ministry of Health
Ethiopian Revenue and Customs
Authority
Federal Micro and Small Enterprises
Development Agency (FeMSEDA)
“
“
Ethiopian Employers Federation
Ministry of Finance and Economic
Development
Ministry of Finance and Economic
Development
78
 Appendix 3) Stakeholders’ Expectations

Stakeholders Expectation of the Stakeholders Measures to be

taken if
expectation is not
met
Members  Self-reliant and autonomous chamber  Lose trust in
 Trade and investment promotion the Chamber
 Periodic visit regional members and hold discussions with  Bypass the
regional authorities Chamber and
 Extend its current role and expand its reaches directly contact
 Lobby/Advocate for favorable government policies to with the
improve the business environment government
 Bridge the gap between the private and the public sector
 Promote well organized informational exchange between
members
 Organize business community and facilitate transfer of
technology
 Provide overall policy guide to private sector development
in Ethiopia
 Create market linkage and search for foreign market
 Provide financial support to organize public dialogue forum
with the private sector by mapping local or international
donor organizations
 Capacity building of members by organizing different
training courses for regions
 Support to equip members with the necessary facilities such
as office space, equipment, furniture and electronics support
 Technical support on new membership development
 Coordinate and support member organizations to increase
their own membership base
 Assessing and addressing needs of members
 Strong and peaceful communication and timely information
flow
 Solve business community problems
 Enhance investments and international trade
 Play more active role to network and bring chambers
together
 Organize members’ data appropriately
 Establish and strengthen information center
 Establish appropriate organizational structure
 Enable member organizations to have well-educated man
power
 Adequate follow-ups on members’ activities
 Strong and transparent leadership

79
Stakeholders Expectation of the Stakeholders Measures to be
taken if
expectation is not
met
 Serving members equally
 Collect membership contributions properly
The private  Protecting the interest of the private sector  Bypass the
sector  Effective representation Chamber and
 Capacity development through training, research and directly contact
consultancy the government
 Trade and investment promotion  Leave the
Chambers
Board of  Effective services to the private sector  Change in
Directors  Proper support for regional Chambers strategic
 Competent and motivated employees direction
 Perfuming better than the previous board members  Changes the
management
Management  Competitive salary  Complain
and Staff  Good working environment  Work
 Well-quipped and furnished offices dissatisfaction
 Good fringe benefits  Work with
 Supporting and participatory management minimum
 Provision of proper service to clients capacity
 Self-reliant organization  Leave job
 Recognitions based on performance
 Placement of the right person at the right position
 Equal treatment with other staff and respect from
supervisors
 Positive work environment and the will to do more
 An organization that is guided with proper plan
 Promoting cooperation and team spirit among staff
 A system that promotes organizational, rather than,
individual interest
 Better communication
Employers’  Promoting international trade  No power to
Association  Effectively representing the private sector in all industries take any action
 Creating a vibrant private sector (according to
 Working together for the benefit of the business community them)
in the country
Donors and  Transparent and accountable chamber  Lose of trust
other  Develop the private sector  Deny funds
stakeholders  Represent the private sector effectively
 Effective resource utilization
Government  Effective representation of the business community  Take matters
Agencies  Promotion of trade and investment into its own
 Promotion of business ethics and social responsibility hand
 Strengthening the public private partnership/ networking  Less
80
Stakeholders Expectation of the Stakeholders Measures to be
taken if
expectation is not
met
 Research on the impact of government laws on the private cooperation
sector and provide feedback or position papers and  Raise the
alternative options to mitigate adverse impacts unmet
 Avoiding tax evasion and illegal trade expectations at
 Providing up-to-date information about itself and that of joint
members performance
 Providing members with the necessary technical and review forums
training to members and creating linkage between members  Promote
and support providing institutions members to
 Identifying and timely channeling issues and gaps that affect elect people
business associations in the country who could
 Helping members know about the government laws so that work hard to
they can make informed decisions defend their
 Mobilize and support the business community to enter in rights
priority areas of the government  Lobby for
 Identify concerns of the business community concerned
 Initiative dialogue based on research parties to take
 Follow up to make sure that the promise made by the actions
government to the business community are realized

81
Appendix 4) ECCSA’s Income by Source from 2008/9 to 2011/12 Fiscal Years

Fiscal Years Four

Sources of Income Years
2008/9 2009/10 2010/11 2011/12 Total
Service Income
Contribution Income 2.8% 3.9% 0.0% 5.1% 2.78%
Certificates of PTA 0.2% 0.1% 0.1% 0.1% 0.09%
Certificates of Origin 8.8% 12.1% 12.2% 14.5% 12.43%
Recommendation Service 1.5% 2.1% 1.4% 1.2% 1.50%
Legalization of Agreements 0.4% 1.5% 1.3% 2.5% 1.58%
Trade Fair Income 13.4% 1.3% 4.3% 26.6% 11.97%
Service Income as percentage of total 27.1% 21.2% 19.3% 50.0% 30.36%
Other Income
Rent Income 70.6% 57.7% 50.6% 31.6% 48.96%
Donation Income 0.0% 13.0% 15.0% 2.3% 8.52%
Printing Income 1.8% 2.0% 0.0% 0.0% 0.65%
Sales of Booklet 0.1% 0.2% 0.0% 0.0% 0.05%
Income from Photocopy Service 0.1% 0.0% 0.0% 0.0% 0.03%
Sales of Exporters’ Guide 0.0% 0.1% 0.0% 1.5% 0.49%
Advertisement 0.0% 2.7% 7.4% 13.2% 7.20%
Sundry 0.2% 3.1% 7.7% 1.4% 3.75%
Total Other Income 72.9% 78.8% 80.7% 50.0% 69.64%
Total Income 100.0% 100.0% 100.0% 100.0% 100.00%

82
Appendix 5) Explanations and Definitions for Performance Indictors Identified for
Objectives Under Each Strategic Priority

PRIORITY ONE

1. Annual percentage increase in stake holders satisfaction on service quality

[(SSR1-SSR0)/SSR0]*100

WHERE: - SSR1 is current year stake holders’ satisfaction rate

- SSR0 is previous year stake holders’ satisfaction rate

NB!*It needs base line survey (NBS)

2. Annual percentage increase in service users
[(CYSU-PYSU)/PYSU]*100
WHERE- CYSU current year service users (su1)
PYSU previous year service users (su0)
3. Percentage reduction in administrative costs for services rendered
- The concept administrative cost should be defined properly
- Cost items that have major cost share should be identified
- Percentage reduction in administrative costs for services rendered (AC/SR) is
calculated
- [(AC0-AC1)/AC1]*100
- WHERE
 AC1 is administrative cost at current year
 ACO is administrative cost last year
4. Put in place M&E system
5. Number of best practices documented, made accessible and applied
6. Percentage of internal and external reports delivered on time.
- Percentage of internal and external reports delivered on time is calculated as
(AT/ST)*100
WHERE
 AT is actual time
 ST is standard time
7. Percentage Increase media coverage
% increase in media coverage= [(MC1-MC0)/MC0]*100
WHERE
 MC1 is media coverage at year t
 MC0 is media coverage at year t-1
8. Percentage increase in the number of partnerships with partners
[(NP1-NP0)/NP0]*100
83
 WHERE- NP1 means number of partnership at current year
NP0 means number of partnership at previous year
9. % increase in attendance at events organized by ECCSA
[(A1-A0)/A0]*100
WHERE – A1- means number of attendants at current year event
A0- means number of attendants in last year event
10. Percent of members that perform election based on proclamation and bylaws
(ANM/ENM)*100
Where-
 ANM actual number of members that perform election based on proclamation and
bylaws
 ENM expected number of members that perform election based on proclamation
and bylaws
11. Number of regional and city chambers with upgraded bylaws
12. Rate of staff turnover
- It can be calculated in either way
- (ANS/RS)*100
- (NSR/RS)*100
- WHERE –ANS-actual number of staff
NSR-number of staff resigned in the budget year
RS- required number of staff on the staffing plan
13. Percent increase in membership at member chambers
[(m1-m0)/m0]*100
Where m1 number of members in ECCSA members at current year
m0 number of members in ECCSA members last year
14. Number of required operational manuals developed, updated and operational zed
15. Weighted average percentage of implementation of planned activities
∑Wiai/∑Wi
Where- Wi- weight provided for activity ai
ai- activity “i” performance level
16. Preparation for new administrative, promotional and training complex for ECCSA finalized
and construction started
17. Percentage increase in members that participate meetings and engagement in special
initiatives
[(mm1-mm0)/mm0]*100
Where
 mm1- number of members that attend regular meeting at current year
 mm0- number of members that attend regular meeting last year

18. Number of aligned strategic plan document with ECCSA

19. Number of members that share costs for meeting and special initiatives

PRIORITY TWO
1. Number of proposals accepted and acted upon by
 prime minister
 federal level dialogues
 by sector ministry
84
  by regional governments
2. Improved ranking of country on ease of doing business
3. Number of business community members that participated in awareness raising campaigns
4. Number of awareness raising campaigns organized
5. Rate of awareness created
- Awareness level should be taken before and after the campaign
- It could be calculated in either of ways
(RUAC/RUBC)*100 OR ∑ALi/∑Ci
where – RUAC- rate of understanding after campaign
RUBC- rate of understanding before campaign
ALi – awareness level for campaigns
Ci- number of campaigns conducted
6. Number of public-private consultation forums organized
7. Number of MOUs signed with relevant federal and regional government agencies
8. Chamber establishment proclamation revised
9. Private sector roadmap developed and adopted
10. legal framework for Public Private Partnership issued
11. Dispute resolutions mechanisms institutionalized
12. Number of disputes resolved

PRIORITY THREE
1. Number of business relationships and linkages created
2. Number of business firms that received BDS
3. Infrastructure set/developed
- Infrastructure type should be identified first and we can put target for each
4. Commencement of periodic publication
5. Number of updated exporters guide published and distributed
NB!
- Current status published on April 25/2011 5090
- Ending balance on December 25/2013 3519
- Distributed(in two years period) 1571
6. Number of training given on export trade
- No experience on export trade training
- 20 per quarter, 4 quarter per year and 5 year
7. Percentage increase in foreign and local investors that receive investment license
[(IRL1-IRL0)/IRL0]*100
Where:-
 IRL1- means potential investors that receive investment license at current year
 IRL0- means potential investors that receive investment license last year
NB!
- Number of projects that get license
- In 2012 is 454
- In 2011 is 574
- In 2010 is 1,255
- In 2009 is 1,029
- In 2008 is 1,015
8. Number of investment forums organized and hosted
- 2 per year, 5 year
9. Number of regional and international trade negotiations attended by ECCSA
85
10. Percent increase in the participation of private sector on side events organized during
bilateral trade agreements
[(BTA1-BTA0)/BTA0]*100
Where:-
 BTA1 means number of bilateral trade agreement engaged at current year
 BTA0 means number of bilateral trade agreement engaged before a current year

PRIORITY FOUR
1. Percentage increase of income
[(I1-I0)/I0]*100
Where:-
 I1 means ECCSA income level at year t
 I0 means ECCSA income level at year t-1
Year total income ECCSA source fund
2004 13,167,336.74 9,538,387.25 3,628,949.00
2005 15,511,246.98 11,757,717.06 3,753,530.00
There is no uniformity on the income growth from year to year for example
 from 2002 to 2003 the % increase is by 66.44%
 from 2003 to 2004 the % decrease is by 10.66%
 from
2. Proportion of self-generated income from total annual revenue
(SGI/TI)*100
Where-
- SGI- self generated income
- TI- total income

PRIORITY FIVE
1. Number of firms supported through value chain based BDS (disaggregated by firm size-
MSE)
2. Increased number of members to city chambers
[(Nm1-Nm0)/Nm0]*100
Where:-
- Nm1- means number of members to city chambers at current year
- Nm0- means number of members to city chambers the year before the current year
3. Annual percentage reduction of production costs compared to world average
[[(AC0-AC1)/AC1]/WA]*100
WHERE
 AC1 is administrative cost at year t
 RAC0 is administrative cost at year t-1
 WA is world average
4. Number of business community members reached through awareness raising campaigns
5. Number of firms with code of conduct and CSR activities
- 10 firms per year, 5 year

86
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