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News around Africa - July 18, 2018

Ethiopia to drive private sector by selling off state-owned firms

41-year-old Prime Minister of Ethiopia, Abiy Ahmed is hoping to boost the Ethiopia private sector by turning the tides of the country’s economy with bold reforms to sell off a host of state-owned firms.

In an interview with Reuters in Addis Ababa, Ethiopia’s Minister for Communications Affairs, Ahmed Shide, explained that the government of Abiy Ahmed – which has announced a stream of reforms since coming into office in April – would retain majority stakes in the state-run airline, logistics, telecoms and energy companies. Nonetheless, everything else from hotels to sugar farming to cement production could be up for sale, with the exception of the firmly controlled financial services sector.

With the move, the Ethiopia private sector is expected to take an upswing in the Africa’s most populous nation after Nigeria, and could bring significant business growths for the country’s private sector.

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“The main objective of this is to encourage private sector development in the country,” Ahmed said, making clear that Ethiopia was turning the page on decades of reliance on the state to drive economic growth in the nation of 100 million people.

“The role of the private sector is very fundamental. We did a lot of state development projects. Now we need to unleash the potential of the private sector,” he said.

Although Ahmed did not give a time-frame for the privatisations, he noted that Addis was tendering for advice from global business consultancies including McKinsey and PwC.

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