Day two of Ethiopian Investment Holdings’ (EIH) mid-year performance review of state-owned enterprises (SOEs) focused on the transportation and industrial sectors, revealing both significant challenges and encouraging progress. The Ethiopian Railway Corporation (ERC) faced scrutiny for financial difficulties, while the Ethiopian Industrial Inputs Development Enterprise (EIIDE) was lauded for its strong performance.
The ERC presented its six-month report, detailing ETB 190.4 million in revenue generated from construction and various business activities. However, the corporation’s report was overshadowed by the significant financial hurdles it faces. The ERC is grappling with substantial foreign debt accumulated from railway investments, requiring urgent financial restructuring. Furthermore, the ongoing conflict in the northern region of Ethiopia has disrupted crucial infrastructure projects, including the Awash-Kombolcha-Hara Gebeya and Hara Gebeya-Mekele railway lines.
EIH issued a series of directives to the ERC, emphasizing the need to prioritize financial audits, diversify revenue streams, improve asset management and utilization, resume suspended projects, and develop a comprehensive policy for risk identification, assessment, mitigation, and monitoring. The future of these critical railway projects hinges on the ERC’s ability to effectively implement these recommendations.
In stark contrast to the ERC’s challenges, the review of the Ethiopian Industrial Inputs Development Enterprise (EIIDE) highlighted a success story. EIIDE demonstrated impressive results, achieving 47% year-over-year revenue growth and meeting 95% of its planned targets. The enterprise also achieved significant progress in its core operation of sourcing industrial inputs, successfully procuring 86% of its strategic targets. These targets included key materials such as textiles, raw and processed leather, industrial salt, and wheat.
EIH commended EIIDE’s performance and offered strategic recommendations to further enhance its operational efficiency and market presence. These recommendations focused on strengthening supply chain management, diversifying product offerings and market segments, and enhancing asset utilization, particularly warehouse facilities. EIIDE’s strong performance offers a positive outlook for the development of Ethiopia’s industrial sector. The EIH mid-year review continues, with further assessments of SOEs expected in the coming days.
