State Enterprises Score 2b Br Profit


Shipping Line generates 3.6 billion Br which is 13.5pc of the revenue




The enterprises under the Ministry of the Public Enterprises (MoPE) have earned 26.7 billion Br in revenues within the first nine months of the current fiscal year. The revenue comes from the 17 enterprises’ transactions and services which is 70pc of the fulfilment for the target set by the Ministry.

This puts the net profit – after operating costs and capital investments – by the enterprises at two billion Br, below the targeted 2.5 billion Br.

The Ethiopian Shipping & Logistics Services Enterprise (ESLSE) generated the bulk of the revenue, generating 3.6 billion Br in the same period. The Ethiopian Sugar Corporation and the Ethiopian Construction Works Corporation follow, making up for 5.1pc and 2.8pc, respectively, of the gain.

The nine months report of the Ministry was presented at the parliament by Girma Amente (PhD) in March 2018, who was the minister of Public Enterprises before the restructuring of the cabinet by Prime Minister Abiy Ahmed (PhD) last month. He faced questions on challenges related to the performance of the stalled megaprojects such as railway construction, sugar, fertiliser and dams under the enterprises overseen by the Ministry.

Ethiopian Agricultural Works Corporation, Ethiopian Building Materials Supply Enterprise, National Alcohol & Liquor Factory and Berhanena Selam Printing enterprise scored above 95pc of their target.

Enterprises that export planned to earn an aggregate 19 million dollars but achieved 15 million dollars. The main reason forwarded for this was the termination of tantalum mining at Kenticha which would have fetched 2.3 million dollars income in the past four months if 40tn of the mineral had been exported within the same period.

The Ministry has also planned to return domestic loans worth 24.5 billion Br taken by the institutions within the nine months period but managed to achieve 77pc of the target. Regarding an external loan of 648 million dollars to be paid within the same period, it succeeded in settling 85pc of it.

The most significant income recorded in the history of the Ministry was also carried out during this time. The remaining 31pc of shares in the National Tobacco Enterprise was sold to Japan Tobacco International (JTI) for close to half a billion dollars last December. The Ministry also recently privatised the Assela Malt Factory for 1.3 billion Br. These revenues though, are not included in the performance report presented during the assessment.

The Ministry, re-established in 2015, has the responsibility to develop a system of corporate administration and finance, support public enterprises to become competent and successful as well as study projects for the enterprises who exhibit market gaps. It can also transfer institutions who do not have strategic benefits for the government to private players.

Alemayehu Geda (Prof.), who has had a decade of experience in the economics department of Addis Abeba University, relates the poor performance of mega projects under the enterprises as a result of three main components: non-professional leadership, poor planning and corruption.

“The leadership at most of these enterprises are political appointees or have little professional experience,” he told Fortune.



By BERHANE HAILEMARIAM
FORTUNE STAFF WRITER

Published on May 12,2018 [ Vol 19 ,No 941]


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