Unaffordable Expectations

Tayitu 14th

Birhanu Wolde Giorgis, an auto mechanic in his early 30’s knows how to work in a sector where most of the techniques and tasks are adopted and performed through years of experience rather than an academic background.

He runs his business in a rented 850sqm compound, around Gofa Mazuriya in Kera, and engages in the maintenance of small vehicles. Due to the fact that both Brihanu and his landlord use the area, it creates a congestion, making it difficult for anyone to pass by.

Unlike his seven employees who failed to pass high school, he has academic competence in the field, having graduated from Tegbared TVET College in automotive maintenance, and has 12 years of experience as both an employee and employer.

The working area, academic competence of the employees, and the whole infrastructural content of the compound is in direct contrast with the certificate of competence set by the Federal Transport Authority (FTA), in 2012.

According to the Commercial Registration and Business Licensing Proclamation number 686/2010, Birhanu shall not renew his business license.

It started with the drafting of the aforementioned proclamation, which dealt with business licensing and registration.

The proclamation has an article that states that any business entity that runs commercial activities requires a certificate of competence issued from the concerned agency, which shall be submitted before any business licenses can be issued.

In relation to this, the Ministry of Trade (MoT) has the “Ethiopian Standard Industrial Classification”, which listed areas of business that are required to have a certificate of competence.

The book categorizes different business sectors under ten main divisions and 1,351 sub sectors, and their respective authorised bodies which are assigned to issue certificates of competence.

As one of the regulatory bodies, FTA has its own standards that are meant for people like Birhanu, who engage in auto repairing, maintenance and troubleshooting.

The document has 27 basic standards for business entities that are engaged in auto repairing, maintenance and troubleshooting. These standards are listed into three different categories and stakeholders in the sector are mandated to fulfill these standards.

These categories are human resource, tools and the work area, and they are tagged to different levels of auto repairs.

For instance, according to the standard level one repair and maintenance, garages should have a working area of 250sqm, with offices, restrooms, space for workers and a standing area for vehicles in accordance with the specification, human resource with academic competence, ranging from Diploma to 12+3 in either Auto-mechanics or Auto-electricity and a certificate of competence (COC) in addition to 20 types of working tools is required.

“This is unrealistic as it goes against the current trend of the sector,” said Birhanu. He condemned the standard completely.

This view is shared by Meles Zerabiruck, head of the Arada district garage owner’s association and member of the board at Addis Abeba Chamber of Commerce and Sectoral Association. The standard is out of context and it is not in line with the current capacity of those in the sector, in terms of academic background, acquisition of tools and working area, said Meles.

There are around 1,060 garages at different levels in Addis Abeba and of these, only 200 have managed to fulfill the standards and renew their licenses.

Around the area where Birhanu’s garage is located, there are many who perform the same kind of work and do it in the same style as Birhanu.

He said most of them in the sector acquired their knowledge through practical experience, but the requirements in the FTA’s standards are indifferent to this fact. It is difficult for the biggest garages in the city to comply with the standards, let alone for us, who work at the lowest level, added Birhanu.

Johnny Garage is one simple example. Located in Bole district, near Megengna, along the ring road, the garage is considered by many as a modest vehicle-repairing centre, and unlike garages like Birhanu’s, in addition to individual customers, they work with insurance companies, organisations and government entities.

Out of 200 garages, this is one of the garages that was able to get a certificate of competence from Addis Abeba Transport Bureau (AATB). It is entitled with a level four standard for maintenance of small vehicles.

According to the standard, they first needed to have an 800sqm plot of land, 15 staff members, of which two are degree holders in management, automotive or mechanical engineering and eight are diploma holders in respective fields. The remaining staff members needed to have 10+1, 10+2 or 10+3. In addition, they have to pass the COC test. The garage engages in mechanical, bodywork, electrical and painting works on a 1,000sqm plot of land.

The company deserved to have been given a better level as it had the expertise to get the job done, according to Gizachew Temesgen, head of management and finance of Johnny Garage. Even though we were ranked at level four, we fulfill requirements that are beyond the list, added Gizachew.

He sends his sympathies towards small garages like Birhanu’s, stating that it will be difficult for them if the bureau will not adjust some of its standards.

However, Wegayehu Assefa, transport operation head at AATB argued that they had done enough saying the standard was not immediately put into action as it was prepared two years ago, we were giving them a license with the assumption that these people would meet the standard within this time.

For the time being, Birhanu has not yet renewed his business license and it seems that this does not concern him.

As long as everyone around him is working at the same level, it will be difficult for Transport Bureau to ignore the reality on the ground and refuse to give the green light to continue their businesses, stressed Birhanu.

This is just one case where business license and commercial registration is a prerequisite to fulfilling the certificate of competence.

In addition to the above type of business, standard assurance bodies in their respective areas set quality standards that have to be fulfilled before business licenses could been issued.

In relation to health related issues the Food, Medicine Health Care Administration Control Authority (FMHCACA) has the mandate to inspect and give quality competence certificates for business entities in hotels and restaurants, service providers and house-hold industries.

Solomon Negusie is an employee at a barbershop in the inner city of Addis Abeba, Piassa, between General Wingate and Dejazmache Jote Street.

The shop is just an ordinary barbershop with two barber chairs and two additional chairs for customers to sit in while waiting their turn.

When Fortune visited the shop, on December 10, 2014, there were only Solomon and his friend waiting for walk-ins. Both wore red working coats instead of the white coat, which is required as per the bureau’s standard.

Basic health protection standards for hotels and restaurants, service providers and household industries listed eight basic standards, and one of the standards says every barber shall wear white and clean working coats.

In addition, it stated that every barbershop should have its own toilet. However, the barbershop where Solomon and his friend work had no toilet, which was reason enough to deny renewing their license.

This could have happened, according to Solomon, because of a shortage of human resource and capacity inefficiency of the bureau, said Endrias Alganeh, inspection officer at Addis Abeba Health Bureau.

As far as commercial registration and business licensing is concerned, an anonymous senior researcher on the area argues that most of standardisation bodies are not well equipped to issue licenses of competence, and some also had no manuals for assurance of standards.

He emphasised that during the process of quality certificate assurance by all respective bodies, two things must be taken into consideration: one is that these standards must not be ideal ones and they should not alienate themselves from the contextual framework. Otherwise, they will affect the efficiency of each sector and will make businesses more difficult to continue.

“More priority of setting standards must be given to areas of businesses that have negative implications on public safety rather than small scale industries that are expected to show progress and develop into more advanced levels,” said the researcher.

In the mean time, Birhanu and his friends have less than a month to discover their fates, as the deadline for business licensing will end on January 8, 2015, while the garage workers association is insisting on the revision of the standard.

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