For the last two decades the Ethiopian Privatization Agency has transferred 377 public enterprises to private entities and earned 47 billion birr.Agency Communication head Wondafrash Assefa told The Ethiopian Herald that 87 percent of the enterprises transferred to local entities while the rest to foreign companies. Some 37 percent of the assets were totally sold in cash while others transferred in the form of common development venture and rents.
Wondafrash said the transfer mainly focused on privatizing assets to local investors in order to encourage them to do business here and protect capital flight. The earned money is allocated to the prioritized development schemes such as the construction of Ethiopian Grand Renaissance Dam and sugar industries.
According to Wondafrash, the transfer is underway in a transparent manner engaging in various pertinent actors including Prime Minister Office.
The agency considers buyers' knowledge, experience, technological and employment capacity as well as managerial capacity to a level makes the enterprise boost foreign currency earnings.
The head said in order to encourage local winner investors; they are required to pay only 35 percent of the total price while the balance will be paid within five years.
For foreign investors who already invest here and won the bid, their portfolio and performance will be scrutinized and will be required to pay 50 percent of the price while the remaining amount will be paid within three years, the head said and adding , the new comer foreign investors are required to settle 100 percent payment.
Asked regarding the settlement in case the sold enterprises have dept from the third party Wondafrash said that if the enterprises are registered as share holder company the buyer company will take both the asset and the liability. Besides, if there is a money going to be collected from third party, it is entitled to collect the money and take it as its own.
On the other hand, if the sold enterprises are fully owned by government based on the nation's commercial low, the debt will be paid by the Public Enterprises Trustee Board, he noted.