Ethiopia has shifted ownership of ten major state-owned enterprises to its sovereign wealth fund, Ethiopian Investment Holdings (EIH), in a move to enhance their financial management and efficiency. The transition aligns with ongoing economic reforms aimed at improving the country’s investment climate and addressing state-owned enterprise debt.
The transferred companies include Ethiopian Electric Power, Ethiopian Railway Corporation, and the Development Bank of Ethiopia. These entities manage critical infrastructure projects such as the Ethio-Djibouti railway, the Great Ethiopian Renaissance Dam, and numerous industrial parks.
EIH, which already oversees 27 state-owned enterprises, including Ethiopian Airlines and Ethio Telecom, aims to bolster the financial health of the newly added firms. EIH Chief Executive Officer Brook Taye emphasized that the fund’s approach focuses on ensuring these companies maintain strong balance sheets, enabling them to secure financing both locally and internationally.
One key reform involves converting the debt owed by state enterprises to the Commercial Bank of Ethiopia—estimated at 846 billion birr ($6.78 billion)—into 10-year bonds. This measure is expected to alleviate financial pressures on the companies and support their long-term stability.
The Ethiopian government has also initiated broader economic changes, including floating its currency, attracting foreign investment, and restructuring indebted public enterprises through the establishment of EIH. These reforms are designed to revitalize the economy and pave the way for sustainable growth.