4 Key requirements to register as a contractor in Ethiopia

To work as contractor and participate Construction in Ethiopia the following requirements are needed:

1. Register with the government

All contractors who desire to carry any construction related activity is required to first register with the Ministry of Works and Urban Development (hereinafter referred to as MoWUD) in accordance with the Guidelines for the Registration of Construction Professionals and Contractors (hereinafter referred to as the Guidelines).

It is after securing a registration certificate from the Ministry of Trade that an application for registration with the MoWUD can be entertained. The contractor has to submit a photocopy of such a certificate to the MoWUD before being licensed as a contractor.

There are however different categories to register depending on the grades to which the contractor is applying.

Every contractor has the option of submitting an application for registration as a contractor in any one of the following categories:

• General Contractors: These are contractors who are qualified to undertake a variety of construction works such as buildings, roads, railways, bridges, etc.
• Building Contractors: These are contractors who are qualified to undertake building construction and related works.
• Road Contractors: These are contractors who are qualified to undertake construction of roads and other related civil engineering works.
• Specialized Contractors: These are contractors who are qualified to undertake construction activities in specialized trades such as electro-mechanical installation works, painting and decorations, sanitary installation works, wood and metal works and landscaping and other related activities.

There are 10 grades which are categorized accordingly based on the construction cost of the project that the contractor is seeking to undertake. General Contractors, Building Contractors and Road Contractors can register in the ten grades based on the following criteria.

• Grade 1 – Construction cost of Birr above 20,000,000
• Grade 2 – Construction Cost of Birr up to 20,000,000
• Grade 3 – Construction cost of Birr up to 15,000,000
• Grade 4 – Construction cost of Birr up to 10,000,000
• Grade 5 – Construction cost of Birr up to 5,000,000
• Grade 6 – Construction cost of Birr up to 2,500,000
• Grade 7 – Construction cost of Birr up to 1,000,000
• Grade 8 – Construction cost of Birr up to 500,000
• Grade 9 – Construction cost of Birr up to 250,000
• Grade 10 – Construction cost of Birr up to 100,000

As far as Specialized Contractors are concerned, they can register in the ten grades based on the cost of the construction or installation of the specialized trades.

• Grade 5 – Construction (Installation) cost of Birr up to 5,000,000
• Grade 6 – Construction (Installation) cost of Birr up to 2,500,000
• Grade 7 – Construction (Installation) cost of Birr up to 1,000,000
• Grade 8 – Construction (Installation) cost of Birr up to 500,000
• Grade 9 – Construction (Installation) cost of Birr up to 250,000
• Grade 10 – Construction (Installation) cost of Birr up to 100,000

2. Certain experience and qualification

Once a contractor who wishes to register in any of the ten grades fulfills the criteria of the cost required, he/she has to have certain experience and qualification as well as staff requirements that he/she needs to fulfill.

While registered a contractor uses the work permit license under the name of the Technical Manager (the names of both the owner and the Technical Manager will be listed on the identification to be issued).

For all categories of contractors;

• For Grades 1 and 2, the general or technical manager should be a registered as Professional Engineer IV
• For Grades 3 and 4, the general or technical manager has to be a registered as Associate Engineer IV or a Professional Engineer III
• For Grade 5, the general or technical manager has to be a registered as Professional Engineer or Associate Engineer III
• For Grade 6, he/she shall be a registered as Associate Engineer or Professional Engineer I
• For Grades 7 and 8, he/she shall be a registered Engineering Aid or Construction Superintendent with eighteen years of relevant experience.
• For Grades 9 and 10, the applicant can either be a Graduate Engineering Aide with four years of construction experience or a Graduate Associate Engineer with at least two years of construction experience or any person able to read, understand and interpret blue prints with at least seven years of practical experience in construction works.

3. Fulfill staff requirement 

After fulfilling the experience and qualification requirements, a contractor has to fulfill staff requirement .The staff requirements vary from grade to grade and sometimes from category to category. The staff requirements for the different categories of contractors of different grades can be seen from the following chart.

General Contractors, Grades 1 and 2 – two Professional Engineers IV or above

One Associate Engineer IV or above
One Associate Engineer III or above
One Engineering Aide III or above
Two Engineering Aides II or above

General Contractors, Grades 3 and 4 – One Professional Engineer III or above

One Associate Engineer III or above
One Associate Engineer II or above
One Engineering Aide II or above
One Engineering Aides I or above

General Contractors, Grade 5 – One Professional Engineer II or above

One Associate Engineer II or above
One Associate Engineer I or above
Two Engineering Aides I or above

Building and Road Contractors, Grades 1 and 2 – One Professional Engineer IV or above
Two Associate Engineers IV or above
Three Engineering Aides II or above

Building and Road Contractors, Grades 3 and 4 – One Professional Engineer III or above
One Associate Engineer III or above
One Engineering Aide II or above
One Engineering Aide I or above

Building and Road Contractors, Grade 5 – One Associate Engineer II or above
One Engineering Aide I or above

General, Building and Road Contractors, Grade 6 – One Associate Engineer II or above
One Graduate Engineering Aide or above

General, Building and Road Contractors, Grade 7 – One Engineering Aide I or above
One Graduate Engineering Aide or above

General, Building and Road Contractors, Grade 8 –

One Engineering Aide I or above

4. Submit record of past performances and audited statement of accounts 

Once a contractor fulfills the above mentioned requirements and pays the registration fee set by the Guidelines, he/she is expected to submit a record of past performances and an audited statement of accounts along with the number, type and capacity of the equipment he/she intends to use.

There are various equipment requirements set by the Guidelines for the registration of different categories of contractors in different grades. Categories and grades to which a contractor is registered may be varied, upon the application of the contractor, by decision of the Registration Committee after having examined the financial, experience and staff and other resources or quality of performance of the contractor.

This decision of the Committee, however, is subject to the approval of the Minister of Works and Urban Development. Contractors may apply for grade and category change only once in a fiscal year provided that they are able to meet fully all the requirements set by the Guidelines.

Once a contractor is registered as such, the registration shall be valid for a period of one calendar year beginning form the year of such registration. At the end of the one year’s period, each contractor is expected to be renewed every calendar year thereafter.

The renewal of registration is only be effected only after the person seeking the renewal complies with the requirement of registration set forth by the Guidelines.

If the renewal year has lapsed, the contractor has the option of having the registration renewed within three years of the expiry date upon payment of the arrears plus a fifty percent of the renewal fee for the period within which the registration has not been renewed. Any registration that is not renewed within three years of its expiry date shall be deemed to be cancelled automatically.

Registration as a foreign contractor

Foreign contractors or investors are allowed to register in the GC-1, BC-1, RC-1 or SC-1 categories of General, Building, Road and Special contractors.