5 August 2018

Ethiopia: Government Privatisation Advisory Council Forms and Meets

The Prime Minister established a 21-member privatisation advisory council on Friday

Prime Minister Abiy Ahmed (PhD) set up an advisory council, consisting of 21 members. The council will advise the government on the process of privatising state-owned enterprises.

Council members, formed on Friday August 3, come from government, the private sector, academia, international institutions and the diaspora community. On the same day, an urgent meeting was called at the Office of the Prime Minister where the members of the new council held a meeting in the afternoon.

The members of the Advisory Council are expected to meet again this week for further discussions to draft terms of reference, which includes the mandate and responsibility of the various stakeholders.

"When they called me I didn't expect the agenda to be about privatisation," said Beyene Petros (Prof.), a prominent opposition party leader, "rather I thought it would be a follow-up meeting from our previous summons."

The member of the council also includes Eyesuswork Zafu, Zellalem Melesse, Maaza Birru, Bekele Gelleta, Abebe Aemirosellasie, Lidetu Ayalew, Tasew Wodlehana (Prof.), Girma Seifu, Lencho Batti, Abraham Tekeste (PhD), Yinager Dessie (PhD), Teklewold Atnafu and Girma Birru.

"We were summoned to express our willingness and commitment," said Lidetu Ayalew, another opposition party leader.

During the meeting, the Prime Minister welcomed the gathering and explained the purpose of the meeting. During the meeting, a draft term of reference was distributed to members of the advisory council.

The former governor of the National Bank of Ethiopia, Teklewold Atnafu, said the advisory council will set the way forward for the privatisation process through a detailed evaluation process.

"We are expected to submit our recommendation within a year," Teklewold, who is currently heading the financial affairs office in the Prime Minister's Office, said. "Yet it depends on variables such as the amount of time the technical studies will take."

The council will be tasked with analysing the best practices from around the world and advising the Prime Minister, according to Fitsum Arega, chief of staff at the Prime Minister's Office.

"Technical advice will be given by the Ministry of Finance & Economic Cooperation," Fitsum told Fortune.

A number of people expressed their support and concern on social media following the announcement.

"I remember being worried about the privatisation of state-owned enterprises. I have to say this list [helps] me sleep a little better [at night]," wrote Yaddi Bojia on his twitter page‏.

Yet others questioned the suitability of the professional backgrounds of some selected advisers for a process that involves privatisation of state enterprises.

"The members are selected based on their educational background, exposure and experience to create a wholehearted representation," Fitsum says.

Members of the advisory team with backgrounds in political activism believe that they were selected to help check the privatisation process.

"The part we play will be in the political side of the privatisation of the state enterprises," Lidetu told Fortune.

Eysesuswrok Zafu, a corporate leader with global experience in the insurance industry, says it is too early to build opinions about the Council.

"We should wait for the deliberation that takes place in the coming weeks on the terms of reference," he told Fortune.

The Executive Committee of the EPRDF unanimously voted to partially privatise some of the most profitable state enterprises in early June, with the government retaining majority stakes. They included Ethio telecom, Ethiopian Airlines, Ethiopian Shipping & Logistics Services Enterprise and Ethiopian Electric Power, as well as state-owned railways, sugar factories, industrial parks, hotels and manufacturing plants.

The Prime Minister has since told parliament that the majority of the shares the government relinquishes will be offered to non-national investors.

"We will be on alert about the interest of our citizens and the country while transitioning the economy to a private-sector led one," said Beyene.

Ethiopia

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