In the context of Ethiopia, most of the huge and significant industries have been solely monopolized by the government. They were not legally allowed to be neither owned nor shared by the private sector. Still they were controlled, supervised, and administered by the government. As a result, the government faced challenges to accomplish most of its projects within a reasonable period. Some of the projects were not showing the expected progress. And this has created huge macro-economic crises. Thus, it requires urgent demand to transfer these projects to private sectors.
As part of the economic reform taken by the government of Ethiopia, the plan to privatize some of the stateowned industries is expected to bring positive impact to the overall economy of the country. It is expected to boost the economy of the country and can be seen as the cause for fair distribution of economy between and among the citizens. The government has come up with the idea to partially or fully privatize some of these industries. Of these industries, Ethio-Telecom, Ethiopian Airlines, and Ethiopian Shipping and Logistics are included. The Ministry of Finance and Economic Cooperation (MoFEC) disclosed that it has scheduled the time and means to commence the privatization process.
The ministry has announced that the government has completed preprivatization activities to fully or partially privatize the Ethiopian Sugar Corporation assets. Thirteen sugar projects that are currently either fully completed or already operational would be subjected to privatization, according to the ministry.
As to Doctor Eyob Tekalign, State Minister of MoFEC, the ministry in collaboration with Ethiopian Sugar Corporation searches for a Request for Information (RFI) aimed at finalizing the necessary pre-privatization processes to fully or partially privatize the sugar projects. The Minister specified that the RFI is aimed at gathering information and later on determining the form and mode of engagement of the private sector in a competitive tender process in line with the Ethiopian Government’s Laws and Regulations.
The process of privatization would be accountable and transparent, as to the Minister. Eyob added that the RFI has fifteen questions as a starting point, however, cannot restrict interested parties to include information and strategies that may be beneficial and relevant to the privatization process. The Ministry of Finance will do the action of overlooking the privatization process and execution of transactions.
It will review submissions and communicate to the actions to the government, he added. The document from the Ministry revealed the RFI is the first exemplary action to fulfill the policy direction set by the government to reform the economy and increase public sector participation. It allows any interested companies to join the bid and makes the ministry perform its mandate in a transparent way.
The Minister further elaborated that privatizing the corporation would benefit investors and the society as well. First of all, the project is expected to satisfy the needs for sugar consumption in the market. It would play part in balancing the eco-system. The farmers around the project area would gain access to the market. It will also create job opportunity for the people dwelling around the project area, Eyob explained. The decision to privatize the sector mainly arises from the inability of the corporation to sustain its survival. This is basically due to the wrongdoings observed in the sector. The wrongdoings will investigated and the authorities that are associated with the crime shall be held accountable, as to the minister.
Wayu Roba, the manager at the corporation, clarified for his part that a Chinese company has taken over the construction of the Tana Beles Project and will complete it within eight months. The project will start production as soon as its construction has completed, the manager said. OmoI and V projects had been delaying. However, the construction of Omo I is set to be handed over to a private company.
The construction of OmoV and Wolkayt projects will also be hurried up after investigating the causes of the delay, as to Wayu. Approached by The Ethiopian Herald Eshetu Geletu, Corporate Communication Manager and Advisor at Ethio-Sugar Company explained that his company is interested in Mathara and Wonji projects due to the advancement of its constructions compared with the other projects.
He also forwarded that the corporation faced financial shortage as the main deterrent factor for finalizing the projects. Eshetu mentioned the project mismanagement and corruption that had prevailed in the sector as the other majorfactors that hindered the path the government takes to privatize the projects.
And it is the right decision in order to assure the survival of the projects. Thus, privatizing projects is an irreplaceable decision, as to the expert. If the sugar projects are privatized, the existing scarcity of sugar in the market will also be addressed in terms of fulfilling the supply and demand side. It also benefits the people residing around the project areas, the experts believes.
The Ethiopian Herald April 27/2019
BY GETAHUN LEGESSE
