Following its recent determination to introduce a far-fetched reform in the country’s financial policies, the Eritrean government further announced that it will soon undertake an aggressive privatization process for most of the government owned industrial enterprises.
Minister of Trade and Industry, Mr. Estifanos Habte, disclosed that the privatization process would proceed on the basis of either buying shares or sole proprietorship.
Accordingly, the government will start the sell-off of some of the factories and enterprises under its ownership like the Asmara Brewery, Red Sea Bottlers Share Co., Asmara Milk Factory, Alfa Food Factory, Dekemhare Pasta Factory, Red Sea General Mills, Red Sea Food Products Co., and the Children’s Food Factory in Dekemhare back to potential private investors.
Minister Habte further attests that another set of 32 manufacturing projects would soon be launched for privatizations as soon as the necessary documents on machinery, marketing and human resources compiled.
The country had conducted a hugely successful two-day investment conference in the past weeks to discuss investment prospects in the country as well as on the ways and means of fostering “citizen participation” in the re-configured private sector development program through encouraging private investment in the domains of agriculture, manufacturing and tourism.
On this renewed privatization program, aggressive sale of equity shares in some of the most profitable companies like Telecommunications and Insurance will soon to commence. According to reports from the country’s Ministry of Tourism, there are around 13 big and medium sized hotels in the country that have been identified to be processed under the 2013 privatization program.
The country’s financial system that consists of the Central Bank (CBE), the Housing and Commercial Bank (HBE), the Agriculture and Industrial Development Bank, the Eritrean development and Investment Bank (EDIB), and the National Insurance Corporation of Eritrea (NICE) will go through some sort of radical reform on its policies and undertakings in order to help revive the economy through developing the private sector.
In the past, Eritrea had had two phase of privatization. The first phase (1993-94) was largely demand driven but successful in selling-off of several hotels and about 700 small scale shops to provide employment and business opportunities for war veterans and Eritreans returning from abroad.
At the end of 1997 through May 1998, the country began implementing the more formal second phase of the program. Accordingly, eleven industrial enterprises have been sold. However, it only ended up attracting a limited foreign investment to the economy mainly because of lack of aggressive advertisements and the subsequent border conflict with Ethiopia.
Based on previous experiences, the government is expected to do its level best to make this third phase of privatization program a success. In return, the private investors are expected of them to show willingness to introduce new technologies; acquire marketing experience to access international markets; create job opportunities; promote competition as well as efficiency.