Ethiopia sells off seven state firms, to offer more

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Ethiopia sells off seven state firms, to offer more


Thu, Mar 29 08:56 AM EDT
By Aaron Maasho
ADDIS ABABA, March 29 (Reuters) - Ethiopia has accepted bids worth 2.1 billion birr ($121 million) for seven state-owned firms, part of a plan to privatise dozens of corporations in the next three years, it said on Thursday.

The Horn of Africa nation, whose state-dominated economy ranks among the fastest growing in the world, aims to sell around 40 enterprises, including several large farms, a winery and a big hotel.

The Privatisation and Public Enterprise Supervising Agency accepted an 860 million birr bid from MIDROC Ethiopia for one of the country's biggest farms, Upper Awash Agro-Industry Enterprise, said agency spokesman Wondafrash Asefa.

MIDROC Ethiopia is owned by Saudi-Ethiopian billionaire Mohammed Al Amoudi, who is one of the world's richest men according to Forbes magazine.

Al Amoudi's other companies Horizon Plantation PLC, National Mining Corporation and Saudi Star Agricultural Development won bids for four other firms for a combined 463 million birr ($26.7 million), Wondafrash said.

"The enterprises engage in different sectors, including agriculture, beverage, construction, printing, textile and transport. At this time though agriculture enterprises are found to be more attractive than others," Wondafrash said.

Last year, the government sold its last remaining breweries Bedele, Harar and Meta Abo to Heineken and Diageo for a combined $388.3 million.
 

Ethiopia expects its gross domestic product to grow by more than 11 percent each year until 2014, while the International Monetary Fund forecasts a growth rate of 7.5 percent this year and 5.5 percent next year.

Like other African nations, Ethiopia has embarked on ambitious infrastructure investment projects to improve its economic competitiveness, including a multi-billion dollar plan to scale up energy generation.

Economic experts say the government could fund the development plans by privatising its five biggest firms. They include Ethiopian Airlines, Ethiopian Shipping Lines, Ethio Telecom, the Ethiopian Insurance Corporation, and the Commercial Bank of Ethiopia.

"Only with a large-scale privatisation program can Ethiopia achieve many of the objectives," Ethiopia-based research group Access Capital SC said in an economic outlook report.

A sale of the five firms could generate $7.7 billion, the group said, while the privatisation of some 81 other state corporations could rake in another $9.6 billion.

Prime Minister Meles Zenawi has repeatedly ruled out privatisation of the banking and telecommunications sectors, despite pressure from Western donors to do so.

"Several strategic enterprises in different sections will remain in government hands, such as Ethiopian Shipping Lines and another 11 enterprises. They could be privatised once their strategic importance diminishes" Wondafrash said.

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