Ethiopia plans to offer firms shares in road projects – finance minister
Ethiopia plans to offer shares in its road-building and maintenance projects to private investors, its finance minister said on Tuesday, the latest step to open up and modernise the State-led economy.
Ethiopia has over 113,000 km of paved roads and plans to increase that to 220,000 km by 2019/20, official data showed.
“We do not have private-run roads. Through public-private partnerships, the private sector is interested to develop roads,” Minister of Finance and Economic Development Abraham Tekeste told Reuters in an interview. “Through this arrangement, we could work to share the risks and create an environment whereby the private sector can recoup returns on its investment.”
The move to partly liberalise the sector follows Ethiopa’s decision to offer foreign companies stakes in the government-operated Ethiopian Shipping and LogisticsServices Enterprise early this year and its energy sector in 2018.
Ethiopia is one of the fastest-growing economies in Africa, but the expansion has mainly been fuelled by huge public investment. The spending has gone into roads, schools, new highways and dams for hydroelectric power. It opened an electrified railway linking the landlocked nation to a port in neighbouring Djibouti this year.
Abraham said the government expected gross domestic product to grow 11% in the 2016/17 fiscal year, up from 8% the previous period.
The International Monetary Fund has said Ethiopia needs to attract more private investment to maintain growth.Though starting from a low base, foreign investment has also been rising the last five years, including for farms producing flowers and other horticultural products for export and in textiles.
Abraham said Ethiopia took in over $3-billion in foreign direct investment last year and expected that number to rise by the end of this year.