Ethiopia sets privatisation deadline for SOE’s to comply with new reforms
Ethiopia's privatisation plans are in high gear with the government setting a date for the privatisation of her state corporations. Fairfax Africa Fund Chairman, Zemedeneh Negatu joins CNBC Africa for more.
Wed, 05 Feb 2020 15:06:20 GMT
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AI Generated Summary
- The privatization of state-owned enterprises forms part of broader economic reforms in Ethiopia aimed at achieving macroeconomic stability, managing inflation, and reducing the state's role in business operations.
- Prime Minister Abiy Ahmed's administration is focused on sustaining Ethiopia's impressive economic growth by shifting towards private sector-led initiatives and job creation.
- Ethiopia's revised investment law has opened up significant opportunities for domestic and international investors, with a few sectors remaining restricted to foreign investment, signaling a strategic approach to economic reform.
Ethiopia's economic landscape is undergoing a significant transformation as the government sets a deadline for the privatization of state-owned enterprises in line with a series of economic reforms aimed at driving sustainable growth. Fairfax Africa Fund Chairman, Zemedeneh Negatu, sheds light on the country's ambitious plans, highlighting the importance of these reforms in sustaining Ethiopia's impressive economic growth over the past decade. The privatization efforts, which encompass sectors such as sugar and telecom, are part of a larger package of reforms geared towards achieving macroeconomic stability, managing inflation, and reducing the state's dominance in business operations. As Ethiopia surpasses the $100 billion GDP mark, becoming the third-largest economy in sub-Saharan Africa, the need for structural changes to address challenges like foreign exchange shortages and high inflation becomes crucial for maintaining growth momentum. Prime Minister Abiy Ahmed's administration is determined to shift the economic focus towards the private sector, mirroring successful models observed in countries like China where private enterprises have become the primary job creators. The government's aim is to empower the private sector to drive economic growth and job creation, signaling a strategic shift from state-led investments to private sector-driven initiatives. With a recent revision of the investment law opening up vast opportunities for both domestic and international investors, Ethiopia is poised to attract significant foreign direct investment while strategically navigating sector-specific restrictions, such as those in the financial services and retail distribution sectors. While some sectors remain off-limits to foreign investors for now, the overall trajectory of economic reforms in Ethiopia points towards sustained progress and a conducive environment for investors to capitalize on the country's burgeoning economic prospects.
