Ethiopia’s privatization push receives mixed feelings

ADDIS ABABA: The government is hailing the move to privatize some 20 companies as a means to boost Ethiopia’s economy. The International Monetary Fund (IMF) also praised the decision, saying it will create more opportunities for investment and growth in the country. But activists and some analysts tell Bikyamasr.com that with potential famine looming, the privatization could leave millions without a support net, which they said could cause massive unrest and potential death for those who cannot find work and feed their families.

“We have seen privatization across Africa and it has been praised by international organizations like the World Bank and the IMF,” economist and writer Masif Monir told Bikyamasr.com on Friday. “But what they don’t tell you is that when these companies go private it also means a loss of jobs and income for many people. This is what people are fearful of in the near future. Will they have jobs?” Monir added. But the government is moving forward. On Thursday, the Ethiopian Privatization and Public Enterprises Supervising Agency announced it was planning to privatize 20 publicly owned enterprises by the end of the current fiscal year.

The agency is expecting to earn an estimated “3.3 billion birr from the privatization of the enterprises which are currently being owned by the state,” according to Wondafrash Assefa, Corporate Communications Director with PPESA. PPESA earned almost 6.2 billion birr from the privatization of state owned property in the previous financial year said Assefa. “The sale of Meta Abo factory to international beverage company Diageo contributed about three billion birr to the total revenue earned,” he added. Out of the 20 enterprises planned to be privatized this year 17 are expected to be transferred through direct sale mechanism while the other three are designed to be joint private-public ventures.

The enterprises up for privatization Commercial Printing Enterprise, Artistic Printing Enterprise, Agricultural Mechanization Services Enterprise, Adola Gold Mine Enterprise, Awash Winery SC, Bilito Farm, Coffee Technology Development Engineering Enterprise, Hamaressa Edible Oil SC, Arba Gugu Coffee Farm, Ethiopian Mineral Development SC and Ghion Hotel. Some of the enterprises including Ghion Hotel, Commercial Printing Press and Awash Winery had been put up for bid before but successful deals had not materialized.

It is to be remembered that PPESA earned 2 billion birr gross from the operation of the state enterprises it manages meeting 76 percent of its target budget in the previous financial year. But the fears of unemployment are ripe in a country struggling to maintain jobs as the economy expands. The government believes it will entice international investors to the country, which they argue ultimately leads to job creation. But for the workers on the ground in Ethiopia, the future now appears uncertain.

http://www.bikyamasr.com/79844/ethiopias-privatization-push-receives-mixed-feelings/

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