Different research findings recommended creating balanced regional development; reducing regional inequalities and creating balanced concentration of wealth and economic power are amongst the important objectives of public sector enterprises. The role of public enterprises in Ethiopia particularly, is manifested in the quantum of capital they command and the magnitude of the economy’s dependence on such enterprise.
The significant role of public sector was fashioned in most countries to accelerate economic and social development. Yet increasing evidence indicates that most public sector enterprises either do not contribute strongly to development or perform their public service functions ineffectively or inefficiently due to lack of follow up.
Subsequently, Ethiopian scholars agreed that the performance of every public enterprise should be assessed and monitored by the concerned organs. Following the performance report and assessment, they are also responsible to bring remarkable change in order to support the economic growth of the country.
On top of that Ministry of Finance and Public Enterprises Holding Administration has recently evaluated the six month performance of some public development institutions. During the occasion, it was stated that the Commercial Bank of Ethiopia (CBE) has secured over 58 billion birr during the last six months.
Noting the Bank’s revenue performance was 136 percent while it is compared to its plan, the report also indicated that the bank has achieved 84.4 percent of its plan in foreign currency performance. According to the report the bank has earned 1.26 billion USD while its plan was to get 1.4 billion USD.
The total savings performance of the bank was also reached 823 billion birr in the aforementioned period with a 21 percent increment when it is compared to the same period in the last year.
Similarly, while reviewing the performance of the Development Bank of Ethiopia, it was reported that DBE has made significant progress on its track of transformation. Through implementing most of its reform strategy and modifying the Bank’s business model in loan disbursement and lending strategy, it is striving to build healthy financial system across the country, the report indicated.
Chairing the performance review, the Minister of Finance, Ahmed Shide recommended that the Commercial Bank of Ethiopia should increase private sector’s saving amount and digital banking services for better performance. He further stressed the need to be up-to-date with the latest technology and to be competitive in order to maintain a healthy financial system.
As to him, the Development Bank of Ethiopia has also been able to improve its credit management and monitoring capacity following the reshuffle of its management. He also underlined that DBE should continue to focus on solving human resource problems.
Ethio Telecom was also among the public enterprises that have presented their performance. Accordingly, Frehiwot Tamiru, CEO of the company has announced that its subscribers have reached more than 60.8 million across the nation adding that the company has obtained 28 billion birr during the last six months.
She also avowed that the company has secured 74.8 million USD in foreign exchange earnings. She said 13.1 million birr payment was made and 5.1 billion birr was transacted through the Tele-birr mobile app, which was launched eight months ago, mentioning that 16.6 million customers were joined the app.
The company has also managed to save over 1.2 billion birr by implementing a cost optimization strategy during the last six-month period, the CEO pointed out. She also explained that the company has paid 2.3 billion birr for debt reduction and 12.6 billion birr for tax.
Mentioning that the company has achieved 86 percent of its half-year plan, the CEO claimed that security problems, damage to infrastructure and property, improper compensation claims by regions and closing of bank accounts were major bottlenecks to her office’s better achievement.
While reviewing the company’s performance, Minister of Finance, Ahmed Shede said Ethio Telecom has worked hard in the past six months to expand its services, improve the quality of its services, overcome the challenges it faces, and in particular generate foreign exchange.
Ahmed also said the government is undertaking different activities to improve the rules and regulations that have made the company less profitable. He also said the government will continue to work together with the company to solve such problems.
By the same token, the Ethiopian Airlines Group’s six-month performance was also reviewed by the Ministry of Finance and Public Enterprises Holding Administration. According to Isaias Woldemariam, Deputy Chief Executive Officer of the institution, his office has shown great growth and profit in this difficult time while it is compared with international competitors.
According to Isaias the company has transported 4.1 million customers in the first half of the budget year, which is 76 percent of the plan and 73 percent more than the same period of the last year’s performance. Additionally, the institution has saved 608 million USD through implementing a cost-reduction scheme.
Underscoring that many airlines are currently in a difficult period, Ahmed Shide lauded the success of Ethiopian Airlines in terms of profitability and cost reduction. He said the airline should continue to strengthen its performance in the field of cargo service.
He also noted the airline still had a long way to go in terms of cost reduction adding that special attention should be given to projects that have been delayed at the state level and more needs to be done to improve customer satisfaction.
Meanwhile, in order to improve the performance of the institution and to be more competent internationally, Ethiopian Airlines is undertaking vigorous activities and making link with international institution.
Recently, the Ethiopian Airlines Group has signed a strategic partnership agreement to jointly commence “SAM” (Sea-Air-Modal) transportation with International Djibouti Industrial Park Operation (IDIPO) and Air Djibouti for an expeditious transportation of goods to Africa. Based on the agreement, the cargo will be transported from China to Djibouti Free Zone by sea and will be uplifted by air from Djibouti International Airport.
According to the documents obtained from the Ethiopian Airlines, the company and Boeing have Signed Memorandum of Understanding (MoU) for New 777-8 Freighter. The MoU to order the 777-8 Freighter will enable Ethiopian Airlines to meet expanding global cargo demand from its hub in Addis Ababa and position the carrier for long-term sustainable growth.
“Consistent with our history of aviation technology leadership in Africa, we are pleased to sign this MoU with our longstanding partner Boeing, which will make us join select group of launch customer airlines for the fleet. In our vision 2035, we are planning to expand our Cargo and Logistics business to be one of the largest global multimodal logistics providers in all continents.
To this effect we are increasing our dedicated Freighter fleet with the latest technology, fuel efficient and environment-friendly airplanes of the 21st century. We have also started the construction of the largest E-commerce Hub Terminal in Africa,” Tewolde Gebremariam, CEO of Ethiopian Airlines’ Group said.
Tewolde added, “The new 777-8 Freighters will be instrumental in this long journey of growth agenda. Today, our air cargo services cover more than 120 international destinations around the world with both belly hold capacity and dedicated Freighter services.”
All things considered, public enterprises are the drivers for economic growth in the country. They develop infrastructure facilities and operate public utilities. They also use modern technology for production purposes. Therefore, they should work ardently on their aspects to help the acceleration of economic growth in the country, Ahmed Shide pledged.
BY HIZKEL HAILU
THE ETHIOPIAN HERALD FRIDAY 11 MARCH 2022
