Panel recommends treading cautiously with new privatization

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photo: Anteneh Aklilu

Experts are recommending that when Ethiopia’s major enterprises are partially privatized an innovative type of corporate governance be utilized. Professionals, who spoke at an event held at Hilton Hotel on August 3, said this privatization process is unique compared to what Ethiopia has attempted previously.
The seminar held in collaboration with the Accounting and Audit Board of Ethiopia, International Finance Corporation, and the Ethiopian branch of Association of Chartered Certified Accountants (ACCA); featured experts in the legal, investment and accounting sectors who spoke about corporate governance in relation to the government’s partial privatization plan.
The government plans to be the major shareholder in the giant companies like Ethiopian Airlines and Ethio Telecom while transferring a portion to local and international investors.
The role of professionals to handle the legal aspects, public administration and economics as well as accountants and auditors were assessed at the workshop.
During his presentation with the title ‘legal framework in corporate governance and privatization of public enterprises’, Mehretab Leul, from the Mehretab Leul and Associate Law Office, argued that the partial privatization process needs a regulator and legal framework.
“When the companies’ corporate governance becomes clear their worth and value rises and when they become privatized their corporate governance changes,” Netsanet Tsegaw, Country Head of ACCA Ethiopia, said.
“The workshop attempted discuss what the corporate governance of the enterprises should look like when private investors are involved,” Netsanet said.
At the workshop participants stated that the enterprises which will include private investors and become share companies needs an adequate corporate governance framework that will not affect the companies and avoid unnecessary influence of the board of directors or management.
The experience of other countries was also assessed. “The role of professionals in the new share companies was observed,” Netsanet added.
He told Capital that the workshop shows that more exploration and discussion between professionals is required for the process. “As an outcome of the workshop associations or groups of professional individuals will provide inputs for public policy,” he added.