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Telecom and power sectors in Ethiopia should provide better services to be internationally competitive and the sector should be closed to foreign investment, according to Arkebe Oqubay, Advisor to the Prime Minister.
Arkebe strongly opposed the idea of privatizing Ethiopia’s telecommunications and power services, and argued the government should instead work in the GTP II period to improve the standard of services given by the corporations, to make them internationally competitive.
Arkebe recalled that several international financial institutions have frequently asked the government to privatize these services.
Despite significant improvements, the telecom and eclectic service providers, which are under government ownership, have been criticized for the poor service provision, frequent power outages, and common network failures.
Arkebe told Capital, “We are looking into how we can improve these services in the second GTP period, and have no plans to privatize the companies. We are preparing a basic reform blueprint for telecom, electricity and other public enterprises. We want to make them work well, not just at the local level but also at the international level.’’
“Have we done enough work towards this end? No. There are several things that must be done to increase the financial and institutional capacity of these service providers, and we will give great emphasis to this over the next five years. Look at Ethiopian Airlines; it is fully owned by the government, and yet it is one of the top airlines in Africa and the world. So we can work to make our telecom and eclectic services as successful as Ethiopian Airlines,” he said.
He stressed that that public enterprises needed to aim towards manufacturing good quality products and becoming quality service providers in the country.
“We have no place for weak public enterprises that bear small fruit. They must change themselves, they must make progress, they must be self sustainable and able to borrow money from banks with their own resources as collateral. They must compete with other service providers in the private sector and in international markets.”
Currently, Ethio Telecom has 38.8 million mobile phone subscribers, while the electricity provider is making moves to expand power sources to include renewable energy resources to service 45 percent of the population that lives without electricity.
Arkebe expressed his disappointment with the export and manufacturing sectors’ poor performance and stated that the government will do more work to improve performances over the next fiscal year.
The country earned USD 2.99 billion from exports, an 8.1 percent decline from 2013/14 export earnings. In the preceding year, the country had earned USD 3.25 billion exporting agricultural products, natural resources and manufactured goods.
The earning target for the 2014/15 year was USD 5.04 billion; actual earnings were 59.5 percent of the projection.
“We aim for the manufacturing industry to account for over 40 percent of exports and to achieve this we will work on improving infrastructure, electric supply, and poor bureaucracy that challenges the sector.”
He added that more work needed to be done to attract foreign and local investors engaged in the service sector.