Natna

Context is Everything!!!

Eritrea: to Privatize 250 Businesses

Eritrea Economyby Sam B.

In line with recently announced policy changes “nearly 250 state owned businesses will be privatized as Share Companies”, a report from the December 2012 Asmara Investment Conference participant divulged. The privatization of the nearly 250 businesses is in addition to the “32 manufacturing projects would be launched”, as disclosed by the Minister of Trade and Industry, Mr. Estifanos Habte.

Although Mr. Estifanos Habte, has already disclosed that Asmara Brewery, Red Sea Bottlers Share Company, Asmara Milk Factory, Alfa Food Factory, Dekemhare Pasta Factory, the Children’s Food Factory in Dekemhare, Red Sea Food Products and Red Sea General Mills are slated to be privatized “ on the basis of shares and sole proprietorship”, the scope of the privatization programme far exceeds that picture presented by Eritrea’s national media so far.

Additionally, among other policy changes, starting 2013, travelers to Eritrea “will no longer have to declare carried foreign currency”.

To add granularity to the scope and depth of Eritrea’s emerging economic reform and restructuring appended below -with gratitude for sharing them – are notes from Mr. M., a diligent, interested participant and a potential investor:

Policy changes

* All licensing can go through the Eritrean Investment Center (envisioned as a “one-stop shop”)

* Beginning 2013 will no longer have to declare carried foreign currency on arrival if not in excess of $10,000

* People will be able to import and export freely

* Limitations on repatriation of foreign currency will be lifted

* Nearly 250 state owned businesses will be privatized as Share Companies

** NICE will continue to be privatized

** EriTel will be privatized

** 13 State-owned hotels will be privatized

** Numerous State-owned manufacturers will be privatized

Policies that will NOT change

* Currency will not be floated (will in the future gradually reach a sustainable exchange rate)

Primary sectors for investment include agriculture, tourism and industry. Agricultural infrastructure will remain the domain of the government (e.g. dams, roads, etc.) however, all other investments are acceptable, including:

* farms (e.g. cereal crops, vegetables, fruits, flowers, etc.) and

* agricultural processing (canning, juicing, etc.).

-Tourism-sector investments are permitted as tour operators, hoteliers and possibly site development (unmentioned).

-Industrial investment is acceptable in any sub-sector. A list of example projects was given – projects ranged from cement plant to puffed cereal manufacture.

About these ads

4 comments on “Eritrea: to Privatize 250 Businesses

  1. Amba Soira
    January 4, 2013

    Thank you Sam,

    This is very good information. I am surprised more than anything by the complete reversal on the policy on foreign currency. I was expecting this a few years down the road. Maybe I should not be that surprised.
    Now the implementation of the polices over the next 3 years will be key.

    For everything to go smoothly, the Investment Center has to be efficient.
    Hopefully it will not take them too much time to correct any bugs in the system.

    Also the privatization of EriTel is a bit of a surprise, as I expected the Gov. to keep major shares. Personally I want only Eritreans to have shares in EriTel.
    The Gov. will open investments for foreigners in the near future, but I am still hesitant for foreigners to control strategic sectors such telecom.

    Some strategic sectors should only reserved for nationals. Maybe that is a bit unrealistic. The sector I have in mind are telecom, water, electricity more than anything. Too strategic. With the rest I am very very happy.

    Patience is needed from people. Nobody should expect immediate results, but I could already imagine some quarters ready with pen and microphone to over criticize any possible future misstep in the implementation of this fundamental project for our nation.

    I am very happy with the steps taken by the Gov.
    Even if personally I will wait 3 years before declaring success or failure.
    First lets fix the economy and then deal with other major issues.

    Thank you Sam for giving us the forum to share such news.

    Amba Soira.

  2. Sam B.
    January 5, 2013

    Selamat Amba Soira,

    Thanks for the kind words.
    I must say I am more than apprehensive at the scope of the privatisation plan. Unfortunately, I have not found details I could hang my hat on, and as such I am thus far holding back on forming a final opinion on the matter. Except to say that the move reflects the GoE’s level of confidence and control on certain situation.

    But still, we all probably expected the Gov. to get out of some sectors once things settled for them, but this appears as though they are going too far in the other direction.

    I am in agreement with your thoughts and concerns, and if any anymore info becomes available, will share it here.

    Happy New Year

  3. Dave
    January 8, 2013

    Thanks for the summary Sam.
    Any idea what is going to happen to land allocated to people in the metro asmera area, but still not started for construction?

    Thanks, and for sure it is a good start and moving in the right direction.
    Dave G. Meskel

    • Sam B.
      January 8, 2013

      As you probably are already aware, I am not in a place to answer that question.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Information

This entry was posted on January 4, 2013 by in Eritrea and tagged , , , , , , .
Follow

Get every new post delivered to your Inbox.

Join 907 other followers