Ministry Moves to Stress Efficiency of State-Owned Enterprises

Jun 17 , 2023


[ssba-buttons]

Officials at the Ministry of Finance are on the move to amend the 34-year-old proclamation with hopes of boosting the role of state-owned enterprises in commercial affairs while serving the public. They plan to redefine the obligation of public service and give room for state-owned enterprises to become more efficient. The bill was in the making prior to the formation of the Investment Holding, which has 27 state-owned enterprises under its umbrella. The officials opt to understand the new structure and accommodate the changes, with experts doing a gap assessment on each state-owned enterprise before beginning the amendment. Last week, the Standing Committee of State-owned Enterprises Affairs called stakeholders to forward their comments. Established in 2021, the Liability & Asset Management Corporation absorbed the six state-owned enterprises' liabilities, including the Sugar Corporation, the Railway Corporation and the Ethiopian Electric Power, which amounted to 570 billion Br. "It was the country's budget a few years ago," said Hinjat Shamil, reform advisor at the Ministry of Finance. Getachew Wake, vice president of the Development Bank of Ethiopia, voiced his concern about the overlapping role of the holding company with the central bank, which has oversight of both private and public financial institutions. He recommended allowing enterprises to reinvest dividends for capital growth and help achieve the capital growth strategy. The Ethiopian Toll Roads Enterprise represented by Belay Beyene, observes the bill missed the groundwork for enterprises that prefer to reinvest their dividends without involving the government. The Legal Advisor at the Ministry, Habtamu Mengesha, responded that the dividends shared with the government usually go to financing the budget and such reinvestment requests will be treated with mutual consultation.


Radar

Dangote, EIH Break Ground on Mega Fertilizer Plant in Somali Region

Ethiopian Investment Holdings (EIH), the state's sovereign investment arm, has struck a deal with Dangote Group to build one of the world's largest urea fertiliser complexes in Gode, Somali Regional State. The 2.5 billion dollars project will see EIH hold a 40pc stake while Dangote keeps 60pc. With agriculture employing over 70pc of Ethiopians, the government hopes the factory will cut fertiliser costs, create jobs, and boost crop yields while positioning the country as a regional hub. Design...


Radar

CBE Capital Joins Nib Bank for Market Expansion

Nib International Bank has partnered with CBE Capital, the investment arm of the Commercial Bank of Ethiopia (CBE), to expand investment banking services and shore up its finances. The deal covers advisory services, seeking to strengthen Nib's balance sheet, attracting capital, and positioning the bank in a modernising financial sector. The partnership follows a difficult year for Nib, where net profit dropped 36pc to 957.9 million Br and deposits shrank, despite paid-up capital climbing to ...


Radar

Credit Cap Nears Lift-Off

The National Bank of Ethiopia (NBE) is preparing to lift its long-standing credit cap by September, unlocking 1.3 trillion Br in bank lending. The move, flagged by board member and State Minister of Finance Eyob Tekalegn (PhD), follows years of complaints from businesses that borrowing limits choked large-scale projects. Eyob told a local radio station the reform reflects rising investor appetite and improved economic conditions, though he admitted "financing has been the biggest bottleneck for...