PRESS DIGEST
Meles off-loads some
The Indian Ocean Newsletter
January 17, 1998
In the rush of decisions of the recent congress of Tigrean People’s Liberation Front (TPLF), the third conference of Ethiopian People’s Revolutionary Democratic Front (EPRDF, government coalition) in mid-January confirmed the principle of opening up some sectors of the economy (defence, energy, telecommunications) to local and foreign private investors. This inflection is impulsed from higher up by prime minister Meles Zenawi (who is chairman of both EPRDF and TPLF), who is therefore loosing off some ballast under pressure from international fund donors led by the World Bank and the International Monetary Fund (a fresh structural adjustment credit line is being negotiated with IMF).
But although the donors’ wishes are vast (and cover interest rates, privatizations, a banking sector still monopolized by Commercial Bank of Ethiopia despite the existence of small-time private banks, and so on), the Ethiopian authorities have carefully drawn a line around the concessions they are prepared to make. The EPRDF conference accepted private investments in the construction of infrastructures, but stressed that distribution activities linked with these infrastructures would remain in the state’s hands. So electricity distribution remains a state-owned affair even though private investors will be authorized to build hydroelectric power plants.
In fact, of course, in this sector Ethiopia has enormous projects which the government has no idea how to finance. Apart from the 75-MW Tis Abay II plant already under way, three other power plants are planned, the largest being Tekeze (305 MW). Ethiopian Electric Power Corporation’s deputy general manager recently met a U.S. diplomat to let him know that the state-owned utility would welcome the arrival of U.S. firms in Ethiopia to match European companies already in the sector. The government would like foreign investors to get into the conversion of their defence industry towards civil production. And in telecommunications, the government’s objective is above all to get 750,000 more phone lines within the next two years.
At political level, unsurprisingly the EPRDF conference re-elected Meles Zenawi as chairman and designated Addisu Legesse, chairman of Amhara Regional State, as vice president, replacing Tamrat Layne, the former deputy prime minister and chairman of Amhara National Democratic Movement (ANDM) who is currently in prison on charges of abuse of power and corruption. Several chairmen of regional states not already on the EPRDF executive committee were elected. The twenty-man committee has five members from each of its four components (TPLF, ANDM, Oromo People’s Democratic Organization, Southern Ethiopia People’s Democratic Front). The new members are Gebru Asrat (chairman of Tigray Regional state) who replaces Abaye Tsehaye in the TPLF quota on the EPRDF executive committee (the other Tigrean members being Zenawi, Alemseged Gebre Amlak, Seye Abraha and Tewolde Wolde Mariam).
A news and opinion journal on Ethiopia
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