Ethiopia’s new leader is undertaking major economic reforms and political decisions in a bid to drive deeper economic development. This comes after over 3 years of political disputes which saw many people killed, the former prime minister resign from office and a state of emergency declared. In a move that marks a turnaround in the country’s economic strategy, the government is seeking to dilute the ownership of state-run enterprises.
The state-run Ethiopian News Agency said on Tuesday that the government will sell minority stakes to foreign and domestic investors in state monopolies such as Ethio Telecom and Ethiopian Airlines Enterprise, Africa’s biggest and most profitable airline, as well as Ethiopian Shipping & Logistics Services Enterprise. While other sectors, however, will be open to full private sector ownership, including “railway, sugar, industry parks, hotels and various manufacturing firms.” The move indicates new Prime Minister Abiy Ahmed’s receptiveness to outside interests in Africa’s fastest growing economy.
“While majority stakes will be held by the state, shares in Ethio Telecom, Ethiopian Airlines, Ethiopian Power, and the Maritime Transport and Logistics Corporation will be sold to both domestic and foreign investors,” the ruling Ethiopian People’s Revolutionary Democratic Front (EPRDF) said in a statement.
Africa’s second-most populous nation, with over 100 million people, has one of the most closed and controlled economies in Africa. The ruling EPRDF coalition, which has been in power since 1991, has long supported deep state involvement in the economy. It had always argued that national development was best served by keeping strategic industries and critical infrastructure under public ownership.
In another huge political shift, the EPRDF said Ethiopia would “fully accept and implement” a peace agreement, Algiers accord with Eritrea that was signed in 2000 along with Ethiopia announcing its willingness to pull out of Badme.
The countries have remained at odds since a 1998-2000 war over a disputed town that a boundary commission subsequently handed to Eritrea but which Ethiopia rejected.
“Ethiopia and Eritrea have the most unique cultural, historical and blood ties. The suffering on both sides is unspeakable because the peace process is deadlocked. This must change for the sake of our common good,” Fitsum Arega, the prime minister’s chief of staff, tweeted shortly before the announcement.
The prime minister has also lifted the state of emergency two months ahead of schedule, freed thousands of political prisoners and journalists, ended an internet blackout, travelled around Ethiopia and started talks with opposition groups. He has also dismissed charges against diaspora-based media outlets.