Economy
U.S. Report Finds Ethiopian State Enterprises Retain Preferential Treatment
The Reporter (Amharic) · 4 hours ago · Read the Full Story on The Reporter (Amharic)
AI SUMMARY
A U.S. government report states that despite economic reforms in Ethiopia, state-owned enterprises continue to receive preferential treatment that undermines private sector competition.
- The U.S. government released an investment climate report noting Ethiopia has reached the three-year mark in its economic reform process.
- The Ethiopian Investment Holdings oversees 40 state-owned enterprises holding assets worth $150 billion.
- According to the report, state enterprises receive preferential treatment including priority access to foreign exchange, assistance in winning public tenders, and expedited customs procedures.
- State entities listed include Ethiopian Airlines, Ethio Telecom, banks, power firms, and railway and industrial park operators.
- The report notes that while corridor and infrastructure projects reportedly employed thousands of low-skilled workers, no written documentation could verify this data.
- Revision of the investment law in 2020 and WTO accession negotiations are cited as positive steps.
- Regional conflicts in Amhara, Oromia, and Tigray, weak property rights, and parallel market foreign exchange gaps remain business obstacles.
- High tax rates, complex tax systems, and the requirement to deposit 50% of a disputed penalty upfront are major investor concerns.
- Local authorities occasionally impose sudden, large tax levies on leased land without clear justification, carrying the threat of repossession.
- The report highlights transparency issues regarding executive body budget plans and unpublicized debt levels of state-owned enterprises.
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