Gov’t drafts national sugar policy
Calls for public consultation
The Ethiopian government which has embarked on privatizing state-owned sugar factories, is drafting a national sugar development policy and proclamation that would regulate the local sugar industry.
Officials announced that the draft national sugar policy aimed at creating a conducive environment for private investments and to support the export potential of the sector. Brook Taye (PhD), senior adviser to the Minister of Finance, told The Reporter that the draft sugar policy will be finalized and tabled for public consultation by the end of November. This is for the first time when the country drafts a comprehensive national sugar policy that regulates the local sugar industry. The national sugar policy has been drafted by a team of experts drawn from the Ethiopian Sugar Corporation and the Ministry of Finance. Ethiopian consultants – economists and lawyers – have also participated in the drafting of the national sugar policy.
The Ethiopian government has announced its plans to privatize 13 state-owned sugar factories. The Ministry of Finance has released initial documentation for the purpose of inviting local and international investors to express their interests in relation to the privatization of the state-owned sugar factories; both already commissioned and still under construction. The privatization process will begin this year. Brook said the sugar policy, among others, would regulate the market where sugarcane growers would sell their products to the sugar factories.
According to Brook, the price of sugar in Ethiopia is highly subsidized. “The sugar proclamation would address price issues,” he said.
Potential investors and interested parties can participate in the public consultation forum, which is scheduled to be held on November 27th, 2019. Brook indicated that further information can be obtained from Ministry of Finance and Sugar Corporation’s websites.
According to Brook, asset valuation work is being undertaken in the state-owned sugar factories.
Since 2010, the Ethiopian Sugar Corporation has been working to increase its production through expansion of factories to meet the growing local demands as well as exporting sugar to regional and international markets.
To support the expansion program, the Ethiopian government has been assessing restructuring options, including contracting out management and operations, public private partnerships and full or partial privatization for sugar factories currently owned by the Ethiopia Sugar Corporation. The Ministry of Finance believes the reform program will strengthen management within the sugar sector, facilitate investment and the introduction of private sector capital as well as support export growth. The privatization of the sugar sector is also expected to expand business opportunities in areas such as animal feed, animal fattening, pulp and paper as well as alcohol production, among others.
To facilitate the privatization process of the sugar factories, the Ministry of Finance has been undertaking a valuation of the Corporation’s assets, conducting factory capacity assessments and carrying out environmental impact assessments on each factory.
The Ministry sought Requests for Information (RFI) from interested parties and has gathered information from potential buyers. The RFI process has also enabled potential buyers to express their interests on the reform and privatization progresses process. The Ministry is expected to float open international bids. The Government expects the privatization of at least five to six of the sugar factories to be completed within 12 months.
The Ministry of Finance is also working on reform programs on Ethiopian Electric Power, Railway Corporation, Industrial Parks Development Corporation and the Logistics.