Monday, May 20, 2024
BusinessLaw makers push gov’t to speed up privatization

Law makers push gov’t to speed up privatization

The Budget and Finance Standing Committee of the House of People’s Representatives (HPR) urge the Ministry of Finance to speed up the privatization process of selected state-owned enterprises, up on hearing the nine-month performance report of some of the key economic issues of the country on Wednesday.

The Committee maintained that the planned privatization of the selected state-owned enterprise is not going “as fast as it was required”. However, the MPs do not give clear indication as to what they meant by “as fast as it was required”; since there is no clear timetable or objective for the privatization process which was communicated publicly by the government, so far.

Ahmed Shide, Minister of Finance, briefed members of the Standing Committee regarding the privatization process and said that that the ministry is working as fast as possible to pave the right way to transfer the selected state-owned enterprises.

“With a view that these enterprises are a great asset and with the prevailing foreign currency shortage, we are going about the privatization process very cautiously taking the benefit of the public and the government as priority,” Shide asserted.

MPs also inquired the progress with the handful of sugar factories and the planned privatization process, including sugar plants which are yet under construction.

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The construction of the sugar plants is financed by billions of dollars of foreign debt while some of them are stagnated and have lagged behind their official timetable. How are we going to transfer them without clear instrument just because we only have the desire to do so?” a member of the Standing Committee opined.

Admitting that there are several sugar plants which are operational today while some of them are still under construction, the Minister underlined  the fact that the government has actually decided to privatize the companies in their prevailing status.

In addition to the sugar plants, Ahmed told MPs other projects such as railway projects and Industrial Parks, whether completed or under construction;

The construction of the unfinished projects and the privatizing process will be going side by side together with the asset valuation and business valuation, the Minister told the Committee.

The issue of state-owned enterprises has also been one of the issues for the two-day Executive Committee meeting of the ruling Ethiopian People’s Revolutionary Democratic Front (EPRDF) which also reviewed the performances from Ethiopian fiscal years 2003 to 2010.

At the end of its meeting, the Executive Committee has also passed some decisions that it said “will help boost the country’s economy”.

In a communique it issued on Tuesday, the Executive Committee said that the average GDP growth registered during the fiscal year was 9.6 percent, with 5.7 percent growth in agriculture, 19.1 in industry and 10.3 percent in the services.

GDP growth has also shown a marked decline from 10.1 percent to 8.6 percent in the past three years, the Committee noted.

It further noted that the effort to limit inflation into the single digits by creating stable macro-economy was not successful in the years. Consequently, inflation reached 13.1 percent at the end of the Ethiopian fiscal year 2010.

In general, the loan-based financial development model the government has been pursuing and   low capacity of the management of huge state-owned projects have pushed the economy into problem.

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