Data obtained from Oromia Bureau of Trade and Transport shows that about 103,540 businesses were registered between 1987 and 1994 of which 58.54% are retail trade and followed by wholesale, which accounts for 19.06%. Of the remaining, service sector constitutes about 18.29% and the rest being taken by agriculture and industry.
Trends in the Issuance, Renewal and Revocation of Licenses
The emergence and survival of new business enterprises is attributed to the existing conducive economic and social policies under which it operates. Additionally, the entrepreneurial capabilities of a particular society is a driving force for the upcoming and sustainability of business enterprises. It has to be also underlined that one time issuance of business licenses does not reflect the status of business enterprises in the region. Therefore, it is important to look into other proxy indicators to assess the performance status of business enterprises in the region, i.e. the issuance of new licenses, renewal of old and revoked business licenses.
In line with this, the data obtained from the Bureau of Trade and Transport indicate that there is a growing trend in the number of newly issued business licenses which has grown from 22246 in 1987 to 36038 in 1994.
Licenses Renewed
The new trade regulation requires business enterprises to be licensed and get there licenses renewed every year to be considered as legal businesses and operational. In order to renew a license each business enterprise is required to produce evidence of payment of tax. Most of business license owners usually fail to comply with this condition and consequently their licenses are not renewed. As a result the number of licenses renewed each year has shown a declining trend vividly showing fewer businesses are operating legally. Therefore, it is important to review the situation and create mechanism that would enable to properly control and guide the business situation of the region.
Licenses Revoked
Despite the legal requirement to renew license a number of business enterprises fails to comply resulting in revocation of their business licenses. In accordance with this about 13408 licenses were revoked during the period between 1987 and 1994 implying on the one hand the encouraging effort that has been made to ensure the legality of businesses in the region, but on the other indicating un sustainability of small businesses. Although, the measures taken in this respect is commendable, it is crucial, firstly to have mechanisms that would enable to create awareness on the side of business community to assist them in understanding their legal obligations. Secondly, create a forum with the business society to discuss and find solutions on the factors hampering the proper functioning of business and their compliance with rules and regulations.
As a whole it is necessary to build entrepreneurial capabilities, basic business and management skills, create awareness on existing government rules and regulations and facilitate smooth access to working and business premises and market services to make trade sector viable and sustainable.
