Ethiopian Investment Holdings (EIH), one of Africa’s largest sovereign wealth funds, has reaffirmed its commitment to eliminating corruption and mismanagement within its extensive portfolio of major public enterprises.
To encourage the reporting of illicit activities, the state-owned strategic investor has launched a dedicated whistleblower platform. This system allows individuals to confidentially submit tips related to any of the over 40 companies under EIH’s supervision.
This initiative underscores a growing emphasis on governance and transparency as Ethiopia aims to stabilize and optimize its key public assets. EIH manages a diverse array of national investments in critical sectors such as energy, logistics, telecommunications, and manufacturing.
“This platform is a vital step in fostering accountability and protecting the integrity of our national investments,” stated EIH Deputy CEO Habtamu Hailemichael. “We are dedicated to ensuring that all operations under our purview adhere to the highest standards of legal and ethical conduct.”
The initiative aligns with broader national efforts to combat corruption and enhance the business environment, with the aim of attracting foreign investment and ensuring that state-owned enterprises (SOEs) effectively contribute to Ethiopia’s economic growth.
Habtamu acknowledged that some public enterprises have experienced misdemeanors in the past that need correction. He emphasized that the new platform will help strengthen good governance within SOEs, enabling EIH to take corrective action swiftly—sometimes within days—while recognizing that some cases will require more in-depth investigations, including collaboration with relevant law enforcement agencies.
During a press conference on Thursday, the Deputy CEO noted that EIH has been implementing extensive reforms in the leadership of public enterprises, including their boards of directors, over the past few years.
“We are mandated by EIH Regulation 487/2022 and the Federal Government Owned Enterprises Proclamation No. 1314/2024 to appoint qualified leadership, including an independent board composition, to ensure the highest quality of governance across our portfolios,” he explained.
Article 15.8 of the 2024 proclamation stipulates that at least one-third of board members must be independent, each with a minimum of five years of experience and diverse professional backgrounds.
“We are working to implement the proclamation’s requirements for board composition so that SOEs are led by commercial principles,” Habtamu said.
He also mentioned that EIH is creating a pool of qualified candidates from the private sector, educational institutions, and professional associations, who will be assigned to relevant SOEs based on their expertise.
EIH directly oversees 41 strategic companies, organized into nine clusters, including major national entities such as the Commercial Bank of Ethiopia, Ethiopian Electric Power, Ethio Telecom, and Ethiopian Shipping and Logistics.
The core mandate of the sovereign fund is to transform these enterprises into highly profitable entities and to establish a sustainable financing model for strategic domestic and international investments.
As part of reforms aimed at both compliance with the proclamation and improving underperforming entities, EIH’s restructuring has led to the appointment of 70 new board members, including eight chairpersons. Additionally, 41 board members and eight chairpersons have been removed, along with six chief executives being replaced.
Weeks ago, EIH CEO Brook Taye told Capital that EIH is taking on the role of an “active owner” to enforce governance standards, moving beyond the historically passive oversight typical of public enterprise governance.
“Corporate governance is the pivotal factor that will drive public enterprises toward profitability,” Brook stated.
He emphasized that EIH expects strong financial and operational results from the entities it oversees, ensuring they provide tangible benefits for the public, the government, and their own sustainability.
Enterprises that fail to meet performance benchmarks during evaluations are undergoing significant leadership changes.
“Our objective is to establish dedicated, capable boards and competitive top management to ensure sound governance and profitability,” Brook added.
A key aspect of the reform involves a deliberate shift away from the past practice of senior government officials holding multiple board positions across various state-owned enterprises (SOEs).
Informed sources told Capital that EIH is implementing a new policy limiting senior officials to serving on only one public enterprise board, with appointments based on technical expertise and direct relevance to the company’s sector.
“Unlike in the past, we want to ensure board appointments are based on qualifications that provide companies with skilled guidance,” Brook said.
EIH sources support this approach, noting that while senior officials can offer valuable oversight, their participation must be strategic and focused to avoid conflicts of interest and diluted governance.
Brook cited the exemplary performance and governance of Ethiopian Airlines Group, an EIH subsidiary, as a model for the broader portfolio.
“If we can institutionalize the caliber of leadership seen at Ethiopian Airlines across other SOEs, we can replicate that success,” he said.
Having worked in Western financial sectors before joining public service eight years ago, CEO Brook underscored that professionalism must be the cornerstone of SOE governance.
He directly links this to robust business and commercial decision-making frameworks, which are expected to enhance board effectiveness, increase tax contributions and dividend payouts to the state, and ensure successful project execution.
“As the active owner of these enterprises, we will continue to make necessary corrections to fulfill our mandate,” Brook concluded, positioning EIH as a central force in Ethiopia’s broader economic reform agenda.
