ETHIOPIA:

Ethiopian Public Private Consultative Forum (EPPCF)

by
Mamo Mihretu, Program Manager-Ethiopia, IFC Investment Climate Advisory
Eyob Tekalign Tolina, Manager, Ethiopian Public Private Consultative Forum (EPPCF)
Secretariat.
Presented at the Public-Private Dialogue 2015 Workshop
(Copenhagen, March 10-13 2015)

1- Background and Context

The Ethiopian Public Private Consultative Forum (EPPCF) is mandated by a Memorandum of
Understanding (MoU) signed in July 2010 between the then Ministry of Trade and Industry and
the Ethiopian Chamber of Commerce and Sectroral Associations (ECCSA). The MoU is a result of
years of negotiations between the private sector and the government to establish a formal
mechanism for Public Private dialogue. Controversial negotiations included a long naming battle
on whether the forum should be called Consultative forum or Dialogue forum reflecting the
prevailing political economy in Ethiopia in those days.1 In a country where the level of mistrust
between the private and public sector is deep and relations severely strained, the signing of the
MoU and the establishment of the EPPCF represented a major milestone in rebuilding
government and private sector relations.
The EPPCF secretariat began its operation in September 2011 with the financial and technical
support from the International Financial Corporation (IFC) of the World Bank group. The
secretariat has small but nimble team that steers the dialogue process in an organized manner.
One reason for the abrupt end of the first wave of consultations in the early 2000s was that the
government became increasingly impatient with the way the private sector presents issues for
consultation. The government was seriously questioning the ability of the private sector to take
objective positions based on verifiable and well-researched facts. Under EPPCF, this is no longer
an issue as the private sector engages the government based on facts that are based on well. Governments suspicion of the term dialogue comes form the assumption that it connotes a discussion
among equals, something the government was not remotely ready to consider. The private sector on its part
feared that giving up for the term consultative amounts to allowing the continuation of government driven
consultations that were largely symbolic in nature. It required committed champions and a development
partner that saw the larger picture to patiently work through these differences.
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researched studies.

2- Partnership, Structure and Processes

The MoU that established the EPPCF outlines the structure, roles and responsibility of the public
and private sector participants in the EPPCF process. In what can be described as a dual
structure, the Ministry of Trade and Industry (now Ministry of Trade) is the lead public sector
counterpart in the EPPCF model while the Ethiopian Chamber of Commerce and Sectoral
Associations (ECCSA) is the private sector counterpart. The Ministry has established an EPPCF
unit as outlined in the MoU while ECCSA hosts the EPPCF secretariat. The secretariat and the
unit work in close consultation leading the dialogue effort. The EPPCF unit at the MoT was
designed to be a coordination and facilitation mechanism managing the intra ministerial
coordination.
EPPCF had trying times in the earlier years of it history. Including lose of two of its prominent
champions; the leadership of ECCSA and the Ministry of Trade, the two signatories of the MoU,
and a complete staff change at EPPCF due to internal quibbling within ECCSA, the host
institution, EPPCF had to withstand critical challenges that threatened its continued existence.
Thanks to the initial set of dialogue forums that were beginning to show some results, the
stakeholders were able to pull it together and ensure EPPCFs continuity despite the challenges.
EPPCF has an ambitious structure that covers three levels; Federal, State and Woreda. At the
Federal level, the dialogue is centered on six sectoral associations that are the pillars of the
ECCSA. Once a year, a high level National Business Conference, chaired by the Prime Minister, is
held at the Federal level. In addition to these Federal level consultations, the MoU also specifies
that the second and third level of dialogues be held at the State and Woreda2 levels.
The EPPCF Secretariat works closely with other partners to exploit the ambitious structure of the
EPPCF model and deepen a strong dialogue culture across the nation. For instance, the EPPCF
secretariat supports regional PPDs through regional chambers and other partners such as Center
for International Private Enterprise (CIPE). Owing to EPPCFs long-standing achievement, the
dialogue culture is deepening across the country. Taking advantage of the enabling
environment the EPPCF had created and the successful federal level lessons, MoUs are
increasingly being signed at state and sub state levels establishing dialogue platforms.
EPPCF follows research driven process in developing agenda for dialogue. The EPPCF secretariat
engages the private sector continuously to identify pressing issues that warrant a dialogue with
the government. A dialogue forum is always preceded with rigorous analysis of a potential
agenda. Studies might be undertaken by secretariat staff or may be outsourced. Studies
conducted by the Private Sector Development (PSD) hub of the ECCSA, a project funded by SIDA,
also serve as important source of dialogue agenda. A dialogue issues so developed will then be
validated by the private sector through validation workshops. Currently, this exercise is done in
a more structured way through the development of a National Business Agenda (NBA)
developed with the support of IFC and the project. The NBA finalized in December 2013, for
instance, identifies a number of dialogue issues that formed the basis for PPD sessions held in

Woreda is an equivalent of a county.

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2014 and for the dialogue sessions to be held in 2015. The dialogue forums organized by the
EPPCF secretariat are always co-chaired by the private sector and public sector. The
chairmanship from the government side depends on the specific agenda under consideration.
The government, having received the agenda prior to the meetings, responds to the set of
recommendations put forward by the private sector. Agreements reached at the forum then
form the basis for the reform exercise, follow up and implementation. In most cases, joint
public-private Technical committees will be established to work on the implementation of issues
agreed upon at the Forum. The EPPCF does not have permanent working groups.
Institutionally, ECCSA and Ministry of Trade continue to be the champions of the EPPPCF.
Despite the difficult times early on, ECCSA now considers the EPPCF initiative as the pillar of its
advocacy service to its members and is as such the Champion for its ongoing operation. The
Chamber has put together a sustainability strategy to ensure the continuity of the EPPCF
initiative with a clear road map developed for an eventual ownership of the initiative by the
private sector.
In terms of output, the EPPCF has so far conducted more than fifteen dialogue forms and two
National Business Conferences chaired by the Prime Minster. The Forums were conducted along
the specific themes of taxation, trade logistics and customs procedures, trade licensing and
registration, government procurement, company formation and registration issues, tax appeal
and VAT refund issues, access to finance constraints, issues related to protection of property
rights, and a dialogue on the tourism sector, among others. EPPCF has also organized two
National Business Conferences with the Prime Minster. The second National Business
Conference brought together more than 1000 members of the business community and the
entire cabinet. These forums have led to a number of reforms that resulted in significant
savings to the private sector and improved business environment. The PPD team has now put in
place a rigorous Monitoring and evaluation framework to objectively measure the results of the
dialogue forums.
The EPPCF secretariat is currently working on a broader stakeholder engagement strategy to
create more awareness about the EPPCF and its achievements. The EPPCF team distributes
newsletters, albeit irregularly, and is also beginning to use its website as an import tool for
outreach.

3- Results so far
Given the short life span it has, EPPCF has accomplished quiet a lot particularly in terms of
institutionalizing the PPD and building trust between the private and the public sector.
The fact that both the private sector and the government are taking the forum seriously and
opting for a dialogue, as a major option to solve the business environment, is a testament to this
achievement. . One remarkable instance in this regard is the decision by the Council of Minsters
in 2013 to reject a draft customs procedures law primarily due to a concern that enough
consultations have not been made with the private sector. In a country where mutual suspicion
between the private sector and the public sector was a norm, this is a powerful development.

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As mentioned above, the link between the dialogue forums and the improved business
environment and tangible private sector savings is also getting stronger The dialogue forums
have resulted in overhauling of the customs procedures, in efforts to revise decades old
commercial code, in an improvement in business licensing and registration process, in
simplification of company formation procedures, in the betterment of property rights regime,
and in ensuring a fair participation of the private sector in the public procurement systems,
among others. The simplification of company formation and administration procedures has
been significant in terms of reducing the time and money wasted by the prolonged document
authentication process. The elimination of capital confirmation requirement for license renewal
has saved many a small trader the trouble of mobilizing the already invested capital for renewal
purposes. The recognition of more than 55000 undocumented land holdings, as part of the
improved property rights regime, is expected to unleash the economic value of land
significantly.
EPPCF has also offered an opportunity to find sustainable solutions for some of the critical
challenges caused by lack of capacity in the public sector. The automation of trade licensing and
registration by Ministry of Trade and the ongoing effort by the Ethiopian Revenue Authority to
simplify trade logistics-both supported by IFC- can be traced back to EPPCF as the problems
were identified at the PPD Forums. The forums have also provided an opportunity to resolve
longstanding challenges the private sector faces. For instance, in June 2013, a National Business
Conference with the PM has resulted in clearing out a longstanding confusion on dividend tax
payment in the country. The countrys revenue authority used to collect dividend tax on
retained earnings and a successful dialogue session led to the discontinuation of this practice
resulting in significant saving to the private sector. The private sector savings is estimated at
USD 25,384,677 based on the tax complaint figures filled at the Ethiopian Revenue and Customs
Authority.

4- Expected Results
By building further on the EPPCF success to date, the PPD team in Ethiopia plans to lay a solid
foundation for the PPD by building a robust dialogue culture in the country. Now that the EPPCF
has a strong track record due to its long-standing achievements, the team expects to increase
the frequency and quality of dialogue sessions. The team also plans to gain more out of each
dialogue sessions in terms of concrete private sector savings by refining the agenda selection
process and improving the quality of the forum conducted.
The PPD team also plans to implement the clear road map developed for the sustainability of
the EPPCF initiative in Ethiopia. As the only organized and structured platform, EPPCF has the
opportunity to be the major vehicle for meaningful policy deliberations. Given the dialogue
culture it was able to build over the last years, EPPCF has the opportunity to consolidate this
gain. As EPPCF has significantly improved ECCSAs visibility, legitimacy and creditability both in
the eyes of its constituency, the government and the larger public, ECCSA has strong interest to
ensure the sustainability of the EPPCF mechanism.

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5 Private Sector Growth Component

The Ethiopian government is increasingly realizing that sustaining the current economic
performance is going to be impossible unless a strong public-private alliance is forged. EPPCF
has an opportunity to continue to be a major platform where such partnership is forged. EPPCF
is also providing unique opportunity for the private sector to engage in strategic issues that are
critical for private sector growth in Ethiopia. Currently, EPPCF is spearheading efforts for the
development of a private sector development strategy in Ethiopia. As the government is
currently developing its second 5 years growth and transformation plan, EPPCF is also ensuring
that the private sector gets involved in the planning exercise both in terms of substance and
content. In addition to providing critical inputs for the plan, EPPCF will provide meaningful
opportunity for the participation of the private sector at large by organizing consultative forums
on the draft plan.

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Biographies of Authors:
Mamo Mihretu is a Program Manager working for the International Finance Corporation (IFC) of
the World Bank Group, managing projects in Access to Finance and Investment Climate Business
Lines.
Mr. Mihretu has extensive experience and background in the legal reform and economic
development issues. Since 2005, he has worked as Principal Attorney with Booz Allen Hamilton
on WTO issues in Ethiopia where he advised the Ethiopian government on WTO accession, EPA
and other trade policy issues. In addition to research and teaching appointments at Addis Ababa
University and other Ethiopian academic institutions. Mr. Mihretu served as an expert advisor to
the COMESA Secretariat on trade negotiations. Previously, he has served at the Ethiopian
Embassy to the EU and the Federal High Court of Ethiopia.
Mr. Mihretu earned a MPA in public policy (with specialization in economic development and
leadership) at Harvard University, Kennedy School of Government, LLM in international trade
and investment law at the University of Pretoria and the University of Amsterdam, and a LLB in
law at Addis Ababa University.
Eyob Tekalign Tolina joined the EPPCF Secretariat in October 2013. Eyob brings to the
secretariat over 14 years of experience in private sector development, government relations,
research, advocacy, economic and social policy analysis, policy advice, diplomacy, trade,
development finance, operations management, research and academics. Eyob has a deep
understanding of the private sector challenges and the functioning of the government. His years
of experience in Ethiopian Foreign Service included his assignment at the Ethiopian Embassy in
Washington DC heading the Embassys economy and business portfolio. In this capacity, he
spearheaded the Embassys effort to promote trade and investment working with diverse
stakeholders.
He has also advised African Ministers of Trade on Trade issues and the Ethiopian Governors of
the World Bank and IMF on economic policy. Over the years, Eyob has worked for the IFC, the
World Bank, COMESA, African Union, and the United Nations. Eyob has published a number of
articles on socialand economic issues and produced and presented papers at both national and
international conferences. Through his writings and public service work, Eyob has played a
significant role in shaping economicand social policy debate in Ethiopia.
Eyob is a PhD Fellow at University of Maryland. He has obtained his Masters form George
Washington University and his Bachelors degree in Economics from Mekele University in
Ethiopia

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