Ethiopia Plans To Privatize Four Public Companies In 2016

Ethiopia Plans To Privatize Four Public Companies In 2016

Ethiopia plans to privatize four public companies this year as the East African nation with one of the fastest growing economies on the continent opens up its market to foreign investors.

According to a story published by The Reporter and quoted by 2Merkato.com, the country’s Ministry of Enterprises said it plans to sell some of governments shareholding in Bahir Dar Textile S.C., Kombolcha Textile S.C., National Tobacco Enterprise S.C. and Ethiopian Crown Cork and Can Manufacturing Industry S.C.

The report, which did not specify how much the government seeks to raise from these sale, said it would be offloading 40 percent of its 78 percent stake in National Tobacco, which it co-owns with a Yemeni-based company, Sheba Investment Plc.

The Ethiopian government will sell some of its state in Bahir Dar Textile and Kombolcha Textile through a negotiated acquisition. The two textile firms have in the past failed to attract investors even after they were put up for privatization by the state.

Some part of Crown Cork and Can, which has also been offered three times before,  was sold to U.S. based investment firm Fairfax Africa Fund last year for 206 million birr ($9.6 million), Addis Fortune reported.

“Since these companies are unable to get offers from buyers, the agency will decide on whether to give it to private investors through negotiations, or have another tender floated,” Assebe Kebede, assistant communication officer at the Privatization & Public Enterprises Supervising Agency’s (PPESA), told Addis Fortune.

In 2012, Ethiopia offered to sell over 40 public enterprises, including several large farms, a winery and a big hotel, over the next three years, Reuters reported.

While it managed to sell some firms, several other still remain unsold due to lack of interest from foreign investors.