Wednesday, February 8, 2023
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BusinessPrivate sector reproaches finance minister for preaching free market

Private sector reproaches finance minister for preaching free market

Speaking on Ethiopian private sector development workshop, organized by the African Development Bank (AfDB) and FairFax Africa, Abraham Tekeste (PhD), Minister of Finance and Economic Cooperation (MoFEC), has felt the wrath of the private sector as they voice their staunch opposition to a statement made by the minister regarding the need to believe in “fair competition” and the “free market”.    

Prominent private sector players such as Zafu Eyesuswork were highly vocal about what they claimed was a hypocritical view coming from a minister serving in a government which is severely criticized for disrupting free market operations one too many times.        Abraham’s advice to private sector regarding the need to adhere to fair market competition has backfired in big way on the minister and the government at large.

The finance minister urged the private sector to play its share in the economy and the need for this sector to align its objectives and missions with that of the government of Ethiopia.

“Have faith in fair competitions. It is essential for sustainability and creates access to various international markets,” Abraham said to the gathering. He also added that the private sector needs to break out of the circle of low productivity.

He even went on to say that the government is ready to create more conducive business environment particularly mentioning the Public Private Partnership (PPP) arrangement. “The PPP law has been ratified and soon will be launched into actions,” he said. He also encouraged the private sector to venture into manufacturing and entrepreneurship.

But, his statement was met with anger and frustration of the private sector operators. According to Eyesuswork and some of his fellow businessmen and women, it is the government that turned its back on fair competitions a long time ago. Eyesuswork cited the banking sector as showcase of lacking level playing field and fair competition between the public and private sector actors.

Eyesuswork also mentioned the case of the controversial National Bank of Ethiopia (NBE) T-Bills which placed a requirement on private banks to deposit 27 percent of every new loan they disburse to their customers. That requirement is solely set for private banks. Adding further, these banks are required to deposit the sums for five years on an annual interest rate of 3 percent. However, the commercial banks lend money on interest rates that goes up to 21 percent mainly due to controversial Bill and its financial burden. He argued, this certainly is not a level playing field.

 

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