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Ethiopia Grants State Enterprises Three-Year Grace Period To Write Off Decade-Old Receivables

The Reporter · 4 hours ago · Read the Full Story on The Reporter
Ethiopia Grants State Enterprises Three-Year Grace Period To Write Off Decade-Old Receivables
AI SUMMARY

The Ministry of Finance issued Directive No. 1151/2026, granting state-owned enterprises a three-year window to write off legacy debts and obsolete assets alongside new permanent approval thresholds.

  • The Ministry of Finance introduced Directive No. 1151/2026 to allow state-owned enterprises to write off long-standing receivables, unpaid payables, and obsolete assets.
  • The directive establishes a temporary, one-time mechanism to write off receivables outstanding for ten years or more as of the effective date.
  • Enterprise boards must fully adjudicate all applications under the special window within a strict, non-renewable three-year period.
  • Chief executives of state enterprises can write off individual petty receivables up to 10,000 Birr, capped at an annual aggregate of 500,000 Birr.
  • CEOs of Tier 1 enterprises under Ethiopian Investment Holdings can clear up to 50 million Birr per fiscal year under standard procedures.
  • Enterprise boards can approve annual write-offs up to one percent of starting paid-up capital or 100 million Birr, whichever is lower.
  • Write-offs exceeding individual board limits up to 200 million Birr require holding company CEO approval, while amounts over 200 million Birr need holding company board approval.
  • Every write-off request requires formal review by a five-member Accounts Investigation Committee and clearance from the board's Audit Committee.
  • Removing a debt from an accounting ledger does not constitute legal debt forgiveness for responsible third parties without a court ruling.
  • Officials or employees who cause unjustified write-offs through negligence or fraud face direct administrative and legal liability.
Read the Full Story on The Reporter
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