In Ethiopia, the development of bankruptcy law started in 1933 with the enactment of the 1933 Bankruptcy Code.1 The 1960 Commercial Code later amended the 1933 Code, which governed bankruptcy law in its Book 5. The 1960 Code recognized three main procedures for dealing with an insolvent debtor's affairs: composition, scheme of arrangement, and liquidation.2
In 2021, the 1960 Code was amended and replaced by the Commercial Code of Ethiopia 2021 (New Code), which recognised the procedures of preventive restructuring, reorganisation and liquidation.3 Although both laws recognised modern procedures to resolve the insolvency of the debtor, they limited the application of insolvency exclusively to traders (sole business person) and commercial (business) organisations which engage in economic activities to generate profit, precluding the insolvency framework from being applied to non-traders (consumers) and non-commercial organisations.4
The New Code applies to traders5 and business organisations other than joint ventures, which have no legal personality. 6 Traders are natural persons who, professionally and for profit, operate any economic activities listed in article 5 of the New Code or other similar activities designated by the Government in the future.7 Currently, natural persons not operating trading activities listed under article 5 (consumers) are not the subjects of insolvency law, which implies that there is no regime for personal (non-trader) bankruptcy in Ethiopia.8