A Critical Analysis of the Regulation of Civil Society Organizations (CSO) Engagement in Income-Generating Activities under Ethiopian Laws

Abstract

The Civil Society Organizations Proclamation [No. 1113/2019] (CS Proclamation) accompanied by the Directive enacted by the Authority for Civil Society Organizations (ACSO) to implement the Proclamation, and Directive to Determine the Conditions under which CSOs are Engaged in Income-Generating Activities [Directive No. 937/2022] (IGA Directive), allows CSOs to conduct business as per relevant business licensing and registration requirements. Under the CS Proclamation, interested CSOs can operate businesses through different modes, notably by starting new businesses (companies), owning shares in existing businesses, soliciting public contributions, or being a sole proprietorship. IGA Directive has also provided the modes of the CSO's engagement in business activities. However, the provisions of the CS Proclamation and IGA Directive governing the modes of engagement of CSOs in income-generating activities suffer from ambiguities and discrepancies. It is unclear from these provisions whether CSOs are permitted to establish only company forms or all types of business organizations recognized by the Revised Commercial Code (RCC) to operate businesses. Besides, the laws do not specify the details of how a CSO can pursue a business as a sole proprietorship. Thus, this article critically examines these ambiguities and discrepancies in governing CSOs’ engagement in income-generating activities and proposes their possible amendments.