7. PUBLIC ENTERPRISES IN ETHIOPIA
7.1 Characteristics of public enterprises
7.2 Overview of proclamation pertinent to public enterprise
7.3 Organization, Operation, and Liquidation of public enterprise
7.4 Privatization of public enterprise
7.1 Characteristics of public enterprises:
Public enterprises in Ethiopia are institutions established and owned by the government. They can operate in various sectors such as energy, transport, telecommunications, manufacturing, and agriculture. Some of the key characteristics of public enterprises in Ethiopia include:
1. Government ownership: Public enterprises are fully or partially owned by the government, either at the federal or regional level.
2. Public service mandate: Public enterprises are established to provide essential services to the public, such as electricity, water, transportation, and telecommunications.
3. Financial support: Public enterprises often receive financial support from the government in the form of subsidies, loans, or grants to fulfill their objectives and ensure affordable service provision.
4. Social objectives: In addition to financial viability, public enterprises are expected to promote social and economic development by creating employment opportunities and supporting local industries.
5. Government oversight: Public enterprises are subject to government regulations, policies, and oversight to ensure transparency, accountability, and adherence to public interest.
7.2 Overview of proclamation pertinent to public enterprise:
Ethiopia has a legal framework in place to govern public enterprises. The Public Enterprises Proclamation No. 25/1992 is the primary legislation that provides the legal basis for the establishment, operation, and privatization of public enterprises in the country. This proclamation sets out the general principles, objectives, and procedures related to public enterprises.
The proclamation outlines the objectives of public enterprises, including promoting economic and social development, ensuring efficient service delivery, and fostering public-private partnerships. It also defines the roles and responsibilities of various stakeholders, including the government, board of directors, management, and employees.
The proclamation establishes guidelines for the appointment, qualifications, and tenure of board members and officers of public enterprises. It also contains provisions for financial management, auditing, reporting, and disclosure requirements.
7.3 Organization, Operation, and Liquidation of public enterprise:
The organization, operation, and liquidation of public enterprises in Ethiopia are governed by the Public Enterprises Proclamation and other relevant regulations. The proclamation provides guidelines for the establishment, structure, and governance of public enterprises.
Public enterprises are typically established as autonomous bodies with a board of directors responsible for strategic decision-making and policy formulation. The board appoints the management team to oversee the day-to-day operations and implementation of the enterprise's objectives.
In terms of liquidation, the proclamation sets out the criteria, procedures, and requirements for the dissolution or privatization of public enterprises. Liquidation may occur due to financial insolvency, inefficiency, or the government's decision to privatize the enterprise.
7.4 Privatization of public enterprise:
Privatization of public enterprises has been an important policy in Ethiopia's economic reform agenda. The government aims to transfer ownership and management control of public enterprises to the private sector to enhance efficiency, attract investment, and promote competition.
The privatization process typically involves divestment of government shares through various methods, including public offerings, auctions, strategic sales to private investors, or partnerships with foreign companies. The government may also establish regulatory frameworks to ensure fair competition and protect consumer rights in privatized sectors.
The privatization of public enterprises is often guided by specific laws, such as the Proclamation on the Privatization of Public Enterprises No. 146/1998. This proclamation sets out the legal framework for the privatization process, including the roles of the Privatization and Public Enterprises Supervision Agency (PPESA) and the procedures for identifying, valuing, and transferring assets of the enterprises.