The economic reform underway during the past three years has borne fruit in making developmental enterprises profitable. Due to this, according to the information from the Ministry of Finance and National Bank of Ethiopia, it could be possible to make strong economy that able to shoulder the existential war Ethiopia is forced to engage in a year ago. Led by strong discipline and knowledge, government profit making enterprises earned more than 60 billion Birr in the past three months of the 2021/22 budget year.
The enterprises working under the auspicious of Government owned Development Organizations Administration Agency announced that the public enterprises in the first quarter of the budget year plan accomplishment is excellent and obtained 60.2 billion Birr.
Among the public enterprises, the Commercial Bank of Ethiopia obtained the lion share of the income. The Ethio-telecom and the Ethiopian Sea Transit and Logistics ranked second and third respectively. Ethio-telecom in the last three months earned revenue of 13.54 billion Birr as income.
The company planned to earn 15.4 billion Birr in the last three months but it achieved 87.9 percent of its plan. However, as compared to the previous year, it surpassed by 9.5 percent. The company net profit obtained in the past three months is 5.93 billion birr. However, as compared to the past year, its net income is reduced by 25 percent.
The Sea Transport and logistics Service Organization on its part drew its income from sea and land transportation services including providing service to the incoming and out-going commodities, packing export commodities and supplying goods with containers for export and totally obtained 9.71 billion Birr within the last three months. It planned to earn 11.9 billion birr within the last three months but it could achieve 88 percent of the plan. As compared to the previous year, the earned income is surpassed by 61.4 percent and its net profit before tax is 1.45 billion Birr.
The Sugar Development Corporation on its part provided 51,391 tons of sugar to the market and earned 1.14 billion Birr. The company through cost minimization scheme could save more than 11 million Birr.
The other public enterprise earned significant income in the last three months plan accomplishment is the Chemical Industry Corporation. It earned totally 643 million Birr.
Among the public enterprises, the Ethiopian Construction Works, the Ethiopian Construction Design and Supervision Works Corporation, the Ghion Hotel Service Organization, the Ethiopian Pulp and Paper Share- holders Associations, the National Alcohol and Gin Factory and the Ethiopian Trading Corporation totally earned 3.01 billion Birr.
Similarly the Spring Water Service Organization, the Ethiopian Postal Service Organization, the Ethiopian Agricultural works Corporation ,the Ethiopian Tourism Trade works Organization and the Birhanina Selam Publishing Enterprise in the first quarter of the current budget year obtained 1.48 billion birr.
Formerly known as METEC and restructured again as Ethio- Engineering Group earned 280.67 million Birr in the first quarter of the budget year from the sale of vehicles, agricultural machinery, electric and electronic materials, construction materials, iron and metals spare parts, fabrication and plastic products.
The institution planned to obtain 916.70 million Birr in the first quarter of this budget year and accomplished 31 percent. As the institution was in bankruptcy for years, its achievement can be said encouraging. Meanwhile, it is announced that, the Commercial Bank of Ethiopia’s first quarter of the budget year profit enhanced by one fold.
While its total profit is 10 billion Birr and out of it 6.8 billion Birr is before tax, the profit is said to be tremendous in its recent past.
The Bank profit plan accomplishment in the first quarter of this budget year is 146 percent and its profit plan accomplishment is 148 percent.
The first quarter of this budget year profit is surpassed the previous year’s profit. The 2020/21 budget year profit before tax was 3.1 billion Birr. As compared to the previous year’s accomplishment, this budget year’s profit surpassed by 3.5 billion Birr.
According to the information obtained from the Public Enterprises Agency, the Commercial Bank of Ethiopia achieved bellow what it planned in garnering foreign currency. Similar to the previous year’s, the bank unable to obtain hard currency in the first quarter of this budget year as it intended.
The Bank planned to garner 707.9 million Dollar in the first quarter of this budget year but obtained 613.4 million birr and its achievement is 87 percent. Nevertheless, as compared to the previous year, their foreign currency gaining is increased by 11 percent.
In the first quarter of the past budget year, the bank profited 3.1 billion Birr and this indicates that, this budget years profit is excessive which is more than 3.5 billion Birr.
According to the report of public enterprise Administration Agency, the three public finance institutions including the Commercial Bank of Ethiopia, the Development Bank of Ethiopia and the Ethiopian Insurance Company profit in the last budget year before tax was 3.8 billion Birr.
Unlike others, the Commercial Bank of Ethiopia’s 2021/22 budget year first quarter plan accomplishment is said to be excellent.
In the past budget year the bank achieved based on its profit making plan but in this budget year it registered a lot by increasing its profit by one fold.
The Commercial Bank of Ethiopia is said to have a monopoly power in the financial industry of the nation and in the last budget year its profit was 20.3 billion Birr.
As it is known, though the government aspires for the flourishing of market economy led by the private sector, because of the immaturity of this sector, the public sector plays a dominant role in the economy.
In fact, the government, in order to encourage the enhancing of the role of both foreign and local private investors in the economy, took various measures.
Since long ago, it privatized public enterprises particularly the food and beverage and other factories, it introduced various laws to create enabling environment to the sector, it out dated old laws which created obstacle to the flourishing of private sector and following this, many private financial institutions including banks and insurances are flourishing.
Not only these, it established many industrial parks in different parts of the country so that; both foreign and local private companies began production there.
The construction of roads, electric power dams, the provision of Tele-come services and other endeavors helps the advancement of the flourishing of private investment. However, though the government encourages the flourishing of the private sector, the sector itself has its own inherent weakness.
In the very earlier years of the emerging of the private sector, the EPRDF regime intentionally support the private companies which have affinity with the ruling party. This again paved the way for nepotism and corruption.
These companies instead of pursuing competition which is the criterion of the free market economy, they indulged in bribing the party officials to advance their illegal trade and tax evasion.
On the other hand, most private companies by disregarding merit system, they prop up nepotism by employing their own relatives without the necessary academic qualifications and experience which in turn negatively affected the flourishing of strong private sector which has a capacity to influence the government policy for reform. And these all can be said a missed opportunity for the nation’s transformation.
Currently, the private sector plays its own role in boosting the economy by engaging in agriculture, service and manufacturing industries but in the last three decades, it can be said that it played insignificant role in shaping the nation’s socio-economic aspiration.
The newly introduced the 10 years home grown economic development perspective plan clearly indicates the vitality of developing self- sustained private sector led economy but side by side with this, the role of public sector enterprise must be considered.
All these accomplishments gained as a result of committed and strong leadership, manifests that Ethiopian economy is capable of not only carrying the war underway in the northern part of the country, but also showcases the country’s potential to prosper in a shorter period of time, it was learned.
BY ABEBE WOLDEGIORGIS
The Ethiopian Herald 28 November 2021
