An incoming procurement proclamation is undergoing massive changes to streamline with the digital route taken by government courtesy of the electronic government procurement (EGP) system.
This financial year, the Public Procurement and Property Authority (PPPA) has rolled out the EGP to 74 public offices with over 1080 tenders and purchases being published on the locally developed portal.
According to the plan, by the end of the budget year, about 490 billion birr worth of procurement will be undertaken through the EGP.
Leaders at PPPA remarked that despite the digital shift to EGP being new, the execution has been seamlessly adopted across the board in its first year of application.
The electronic procurement system was first piloted with selected nine public offices in the 2021/22 budget year and later expanded in the 2022/23 budget year. Currently, 74 public offices are undertaking their procurement through EGP.
“Of the total 74 public offices, 61 have become most effective in using the new system,” Woldeab Demissie, Deputy Director General of the Authority, said.
“We had limited the number of public offices to 74 to first prove the capability of the system. We will include others when we make sure the system stability is improved and have ample capacity in terms of providing support for offices that will be included on the system,” he explained.
Additional public offices will be included in the coming budget year and in the coming five years time all regions will be part of the portal.
“Except for few higher education institutions, all central government offices will be included on the system as from July, which is more effective with regards to accessibility which leads to attraction of more bidders than the manual scheme,” Woldeab said.
In the budget year, about 1,080 bid and pro-forma procurement were processed via the platform with over 138 contracts being awarded. So far over 8,000 suppliers including international suppliers have been registered.
At the beginning of the year, the number of suppliers was not more than one hundred, but that has since grown gradually.
Lack of awareness is stated as one of the challenges in expanding the number of suppliers. To this end, the authority with different stakeholders is working to draw attention to the new scheme.
The system also supports international tenders and so far, seven international bids have been issued on the portal.
“Experts from World Bank, who have assessed the new scheme, have appreciated our system and we have agreed that when the system stability is at top tier standards, the World Bank and other international partners’ procurements shall be procured, through the same,” said the Deputy Director General, adding, “They have given us some comments on the system. If we make the necessary updates as per the requirement, the World Bank and other international partners will undertake bids through our system.”
Lack of professionals on the sector was also stated as one of the challenge to which the PPPA has revealed it is designing a center of excellence to train experts on the sector.
In Ethiopia, up to 70 percent of the government budget is channeled to procurement.

Ethiopian Sugar Industry Group (ESIG), a state owned estate, is projected to fulfill the production of 2.27 million quintal of sugar, which is half of its capacity. The sluggish import process for the sweet despite performance bond provision by the supplier raises criticism among sector experts.
The group which manages about eight active farms with milling facilities stated that several external and internal challenges hampered its activities making it to not attain its maximum potential.
According to Reta Demeke, Public Relations Head at ESIG, the millers have so far produced 858,000 quintals of sugar this season, which mostly picked up at the end of the rainy season.
“Owing to various reasons, production this year has been a shadow of what it was last year. Some of them, a few weeks ago have run out of production,” Reta elaborated.
Astonishingly, Wonji Shoa, the oldest sugar estate in the country has been out of operation as from mid-November. Similarly, Omo Kuraz 2 has halted its production a month ago, while Arjo Dedessa and Tana Beles resumed production last month.
As Reta informs Capital, sugar millers are now operating in Metehara, Kuraz 3, Tana Beles, Fincha, and Arjo Dedessa.
“Most of them started production late because of several challenges including lack of parts and external challenges,” Reta highlighted.
As per the PR head’s explanation, sugar production is a chain process which primarily is supposed to be done in the preceding seasons.
“Foreign experts who engaged on projects before left the country during the pandemic and the ripple effect is catching up with us now,” Reta explained whilst pointing out reasons of why some projects have been delayed.
The sector’s character is often cyclic, for instance, plantations ought to be carried out at least 14 months prior to this year’s sugar production. According to the head, because of challenges some of the operation was not conducted as per the sector demand.
Ethiopian sugar millers have a capacity to produce over 4 million quintal per annum, while the actual demand is estimated at about six mllion quintal.
“On the consideration of circumstances for this year, we have projected to produce 2.27 million quintal of sugar,” he said.
Besides local production, the Group is also importing sugar to fill the gap. For this year, the bid was opened early November in 2022, to which a company relatively new to the Ethiopian market, Osirius Group, was selected to supply 200,000 metric tons of sugar owing to its lowest bid offer compared to other two bidders.
Currently, the process to start shipment faced delays unlike the past experience owing to the US Company providing its performance bond later than expected. At the moment, the Group has opened the letter of credit to precede the import that will be loaded from Brazil.
“Regarding import such kind of obstacles was not seen in the past, but the process is currently ongoing,” Reta said.
Sector experts opined that due to lower local production and delays on import, the market has been widely covered by francovaluta.
They criticized that the government procurement process has become defunct, “Since the opening of the bid, the process has taken almost half a year. The sugar is yet to be imported. This shows that government’s lead procurement process is failing.”

Absence of foreign currency halts the Public Private Partnership /PPP/ projects on the energy sector. The Ministry of Water and Energy (MoWE) states that it is working with the Ministry of Finance (MoF), and the National Bank of Ethiopia (NBE) to manage the situation.
The board chaired by the finance ministry, consisting of MoWE as members approved 23 PPP pipeline projects up until March 2021, which included eight solar photovoltaic projects, six hydro-power projects, after the ratification of the new private public partnership proclamation in 2018. Currently, all of the projects are on recess.
“Forex availability and convertibility is affecting PPP in the energy sector. We are working with the MoF and NBE to alleviate the issue,” Eng. Sultan Woli, State Minister of MoWE stated whilst speaking on a high-level public-private dialogue on the private sector investment in electricity and infrastructure development in Africa.
As indicated by the state minister, Ethiopia has abundant renewable energy resources and has the potential to generate over 60,000 megawatts (MW) of electric power from hydroelectric, wind, solar and geothermal sources, “As a result of Ethiopia’s rapid GDP growth over the previous decade, demand for electricity has been steadily increasing. The government recognizes that partnership with the private sector via PPP agreements for power generation is crucial to meeting the country’s energy needs.”
With some of the projects still under construction, the country currently has approximately 5.3GW of installed generation capacity. Approximately 90% of the installed generation capacity is from hydropower, while the remaining 8% and 2% is from wind and thermal sources, respectively. There is a plan to exponentially increase the power generation capacity to 17,000 MW by 2030.
“Even though Ethiopia has huge potential to power generation, accessibility is low which is mainly due to low participation of the private sector in the energy sector. Our policies are also not attractive to the private sector. We are now preparing attractive power reforms which will include restructuring and liberalization of the sector to encourage private investment,” Sultan elaborated.
“Some projects have been kicked off while others are in the pipeline. But the shortage in forex deters the project progress and throws of investors. This should not be the case, we should work to streamline this as the private sector is vital to the achievement of the new generation targets,” he further added.

Currently Ethiopia has more than 14 hydropower and three wind power plants throughout the country. The government is also working with the private sector to implement the Corbetti and Tulu Moye geothermal projects. Although, the two directly negotiated geothermal contracts were originally signed for over 1,000 MWs with 500 MWs, respectively in 2017. The total investment required to develop these projects is approximately $1.2 billion.
The signing of these two projects is said to pave the way for upcoming geothermal projects creating opportunities for U.S. IPP developers.
According to reports, despite Ethiopia’s energy potential, the country is experiencing energy shortages and load shedding as it struggles to serve a population of over 100 million people and meet growing electricity demand. Currently, only 40 % of its population is fed with on-grid electrification and 11 % with off-grid pre-electrification, with the combined achievement of 51 percent of electricity access by 2022. Ethiopia’s electrification needs are still significant. By 2030, Ethiopia desires to attain middle-income country status, with a rural and urban electricity access targeted at 100 percent achievement.
With regards to its income generation through power export, Ethiopia currently sells electricity to Djibouti and Sudan; up to 100 MW for each. There is a plan to increase power exports up to 400 MW to Djibouti due to a growing demand in the country. Similarly, Ethiopia through the EEP, has a PPA to export up to 400 MW of power to Kenya. In May 2022, Ethiopia signed an MoU with South Sudan to export 100 MW of power over the next three years.