Ethiopia: Privatization for Better Economic Growth



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By Mengisteab Teshome

In November 1991, Ethiopia established the goal of economic reform facilitated by Transitional Economic Policy (TEP).

Following this policy, a three-year policy document was also developed. with the IMF and the World Bank in October 1992. The policy paper, which forms the basis of the economic reform program, aimed to revitalize the economy and create a more market-oriented economic system, giving way privatization.

The economic reforms are those that urged the country to review the conditions of its state-owned enterprises (EAs). The structural adjustment program in state-owned enterprises normally shows a clear picture of what state-owned enterprises are meant for the country's economy. As a result of the economic reforms, there have been a large number of privatization cases

. Many are perplexed about finding the real and logical causes for which many developing countries have set up a privatization program. The debate over African privatization is hot and long-standing as many African intellectuals blame international donors for the cause.

Over the last decade, Ethiopia has recorded impressive economic performance but the performance of letting wealth tickle the majority at various hurdles. Ethiopia is one of the fastest growing economies in the world, with double-digit economic growth and a halving of poverty.

After climate change in Ethiopia, the new Prime Minister and President of the EPRDF, Mr. Abiy Ahmed, confirmed that state-owned enterprises would be transferred to the nation's best development. According to the statement of the executive committee of the EPRDF of June 5, 2018, foreign investors can buy a minority stake in Ethiopian Airlines, electric power generation projects and Ethiopian shipping. The head of Global Insurance Industry Experience and Chairman of the Board of Directors of Bank United Bank, Zafu Eyesuswork, say that privatization has nothing to do with changing or maintaining the old fashion. "As far as I'm concerned, the EPRDF has proved its maturity in taking such measures."

The government is now realizing that its power and capacity for developing the economy are not so strong, therefore, the movement will help the nation to – for an economic transformation – from a strong economy to Intensity of agriculture towards a more industrialized and knowledge-based economy, he notes

that the ultimate goal of the developmental state is to privatize businesses that could help the nation to drain wealth and resources for all citizens.

The executive committee of the EPRDF should have been modernized much earlier but the reality on the ground had not allowed because the wealth had not been accumulated. wealth does not accumulate properly, rent seeking and anarchy can ruin a given nation: thus, what has been done up to here in this country, is that The government has intervened in areas where the private sector could not be largely involved due to various economic and political impacts. "

As for him, the recent move could be taken as a good example, public remains a majority or lion's share in Ethio -telecom, Ethiopian Airlines, power plants and shipping lines and logistic service companies. 19659006] "So it is on the same track as the education of the developmental state. In my opinion, this initiative could give new impetus to the country's efforts to achieve sound economic management. Above all, it makes people politically autonomous and democracy will also flourish. "

Mohammed added that neoliberals would like to downplay the role of the state as a guardian by letting the market decide the economy." testified only when financial crises and austerity surfaced across the western world. They bought businesses and took measures of invention to save the collapse. "

What is happening in Ethiopia is based on the logic of the developmental state perspective where the intervention will be put in place in an economic corridor chosen for citizens," he adds.

For him, private enterprises operate more efficiently than those owned by the state, so the privatization update in Ethiopia adds values ​​to the performance of institutions. </ p> aspiration of state developmental education.Korean recognized the potential contribution of the private sector to the exploitation of their economies and to coping with the changes in the international economic environment that could serve as models for Ethiopia

Both agree that state-owned enterprises suffer greatly from budget deficits and debts, which have become a financial burden too heavy for the state, many countries, across Africa, the state should withdraw from economic activities that may eventually be managed by the private sector.

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