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Project profile — Investment Climate Improvements Program in Ethiopia



Overview 

CA-3-A035510001
$5,000,000
IFC - International Finance Corporation (44004)
2013-03-26 - 2019-06-30
Closed
Global Affairs Canada
WGM Africa

Country / region 

• Ethiopia (100.00%)

Sector 

• Public finance management:
Public finance management (15111) (15.00%)
Domestic Revenue Mobilisation (15114) (15.00%)
• Trade facilitation:
Trade facilitation (33120) (40.00%)
Trade education/training (33181) (30.00%)

Policy marker 

• Gender equality (significant objective)
• Environmental sustainability (cross-cutting) (not targeted)
• Participatory development and good governance (not targeted)
• Trade development (significant objective)
• Biodiversity (not targeted)
• Climate change mitigation (not targeted)
• Climate Change Adaptation (not targeted)
• Desertification (not targeted)
• Urban issues (not targeted)
• Children's issues (not targeted)
• Youth Issues (not targeted)
• Indigenous Issues (not targeted)
• Disability (not targeted)
• ICT as a tool for development (not targeted)

Description 

The goal of this initiative is to create a more transparent and business-friendly environment for both women and men entrepreneurs in Ethiopia. The project seeks to achieve this by: (1) reviewing policies and regulations related to trade logistics, business regulation and tax administration; (2) recommending improvements based on consultations with government and industry, as well as examples from other countries; (3) providing training and technical assistance to implement the agreed-upon reforms; and (4) undertaking outreach activities to business owners to encourage them to comply with and formalize their businesses. Another objective of the project is to reduce the cost of doing business for entrepreneurs by 10%.

Expected results 

The expected intermediate outcomes for this project include: (1) improved efficiency in trade logistics for exports and imports in Ethiopia; (2) streamlined procedures and improved environment for registering and operating businesses owned by women and men; and (3) more efficient, transparent and user-friendly business taxation and appeals processes.

Results achieved 

Results achieved at the end of the project (June 2019) include: (1) trained over 1,500 government officials on trade policies, strategies and legal frameworks; (2) finalized guidance notes for new income tax and tax administration proclamations; (3) improved the interface of the Ethiopian Investment Commission’s (EIC) online investment services; (4) decreased physical inspections of cargo by border clearance by 35%; (5) reduced the number of supporting documents required for importation and exploration; (6) issued a pre-arrival customs clearance procedure manual, which reduced the time to process the import declarations; (7) introduced major legal, regulatory and administrative reforms translated into reduced compliance burdens and direct cost savings totalling US$34 million for companies, against a target of US$25 million; (8) registered a cumulative result of US$61.4 million against a target of US$18 million in private sector savings for trade logistics; (9) reduced the amount of goods going through customs red channels from 60% to 24.5% against a target of 30%; and (10) 10% of the new firms established during the reform period are attributable to the reforms realized by this project. These results have contributed to developing a more transparent and business-friendly environment for both women and men entrepreneurs in Ethiopia.

Budget and spending 


Original budget $0
Planned disbursement $0
Transactions
Country percentages by sector
Type of finance Aid grant excluding debt reorganisation
Collaboration type Bilateral
Type of aid Contributions to specific-purpose programmes and funds managed by implementing partners