Nation Focuses on Standardizing PPP, Involvement of Private Sector, Says State Minister

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Addis   Ababa  April  24/ 2019 Ethiopia is working on implementing standardized Public Private Partnership (PPP) and enhancing the private sector’s engagement in the economy, State Minister of Finance said.

In an exclusive interview with ENA, Dr. Teshome Tafesse, State Minister of Finance said enhancing the development of private sector is one of the focus areas of the government.

As part of the economic reform, Ethiopia has opened up its economy to the private sector by allowing part or wholesale privatization of its major public enterprises including Ethiopian Airlines, Telecom and Sugar factories.

Moreover, Prime Minister Abiy Ahmed has been dealing with concerned officials to ease the hurdles of doing business and ensure favorable investment climate in the country.

“To keep the international standard we have to work hard on building a system that could help us to attain our objective by involving the private sector in the development process of the country,” Teshome elaborated.  

Privatizing state owned enterprises and introducing Public Private Partnership (PPP) that allows potential private sectors to work in development oriented projects and public service delivery, he said.

The State Minister pointed out that such moves demonstrate the government’s commitment to  promote involvement of the private sector in the national economy.

Stating that Ethiopia’s rank in doing business was lower than it should have been, he added that the government has taken the initiative and made it amongst its priority agenda in the context of the economic reform.

“The PPP managing board, which is composed of seven ministers, two private sector representatives and the PPP director general, has already designated 17 PPP mega projects to be implemented in PPP modality in Ethiopia,” he pointed out.

The construction of power transmission and sub-stations project are among the 17 vital projects for the expansion and development of industrial parks as well as electrification of the country.

Assistance Professor at Addis Ababa University and Independent Consultant, Shiferaw Mitiku, commended the commitment of the incumbent leadership to open up the economy for the private sector.

According to Shiferaw, approval of the Public Private Partnership proclamation, adequate investment laws and incentives, appointment of directors in charge of PPP are some of the measures taken to attract the involvement of private sector.

“Those initiatives are quite appreciated, of course, not only those initiatives but also the willingness of the top management to go for public private partnership which sounds very good currently,” he elaborated.

However, Shiferaw pointed out his concern that the process of privatizing and PPP should thoroughly be based on research and the firm’s performance deviation across the public interest.

Furthermore, he added that privatization and PPP needs to focus on enhancing customer satisfaction, service quality, and responsiveness.

To meet the growing demand of infrastructure and public service delivery, the government sought to mobilize finance from the private sector through public private partnerships (PPPs).

On top of introducing private sector, issues like efficiency, innovation and knowledge, PPPs are considered as key instruments to fill gaps in infrastructure financing.