Recapitalising Ethiopia’s State-owned Enterprises

Ethiopia will use some of the proceeds from partially privatising state companies to pay off government-guaranteed debts issued by lenders, including the largest state bank by assets. The two main state lenders are Commercial Bank of Ethiopia, which accounts for more than 60% of the nation’s financial-services industry; and the Development Bank of Ethiopia (DBE), which allocates credit as directed by the government. Ethiopia’s privatisation plan is part of a shift in strategy under Prime Minister Abiy Ahmed to reduce national debt, generate foreign exchange and strengthen large swaths of the economy of Africa’s second most-populous nation. Ethio Telecom and assets owned by Ethiopian Sugar Corporation are first on the list, with rail, industrial parks and logistics assets among those slated to follow.


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