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Abu Dhabi, UAEThursday 15 November 2018

Ethiopian Airlines top of list of asset stakes country may look to sell

Plan would give investors an opportunity to take ownership in businesses that were nationalised in the 1980s

An Ethiopian Airlines plane in Eritrea. A stake in the carrier may be offered to foreign investors. Reuters
An Ethiopian Airlines plane in Eritrea. A stake in the carrier may be offered to foreign investors. Reuters

Ethiopian Airlines Enterprise is emerging as the flag bearer of plans by Africa’s fastest-growing economy to open up to foreign investors after decades as a closed sho, according to Bloomberg.

In July air links were re-established with former enemy Eritrea, and passengers weeping with joy disembarked from the first Ethiopia Airlines flight to land in the Eritrean capital, Asmara, in 20 years, The National reported on Tuesday, after the two countries signed a peace accord.

While new Prime Minister Abiy Ahmed’s ruling politburo has said a minority stake in the continent’s largest carrier could be up for grabs, chief executive Tewolde GebreMariam now adds that related assets such as airports and a five-star hotel could also be sold off. That would give investors an opportunity to take ownership in businesses that were nationalised in the 1980s under the former Communist Derg regime, according to Bloomberg.

Ethiopia needs about $7.5 billion to finish current infrastructure projects and is also battling foreign-exchange shortages, Mr Abiy said earlier this month.

The National reported that Sheikh Mohammed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, welcomed the leaders of both Ethiopia and Eritrea at the Presidential Palace on Tuesday.

Mr Abiy Ahmed and Eritrean President Isaias Afwerki were honoured with the Order of Zayed during the visit.

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Read more:

Eritrea and Ethiopia look forward to a brighter economic future

WATCH: Sheikh Mohammed bin Zayed welcomes leaders of Eritrea and Ethiopia

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The sale of airline-owned real estate may be easier and quicker than, for example, a privatisation of the much coveted Ethio Telecom monopoly, which the Horn of Africa nation plans to split in two and sell down following two years of study, Bloomberg said. Railways, sugar mills and power-generation companies will also be considered for stake sales.

The list of assets highlighted by Mr Tewolde as ripe for disposal include: the Ethiopian Skylight Hotel - what will be the country’s largest hotel has five stars and is being built near the international airport in Addis Ababa. “The first stage of foreign participation will be the hotel,” said Mr Tewolde; Cargo Airline & Logistics Co - Ethiopian Airlines owns a 150,000 square metre cargo hub with capacity for 1 million tonnes of fresh produce a year. “Logistics is a sector with government or national concern” as Ethiopia focuses on producing industrial goods for export to the US and Europe, Mr Tewolde said; Ethiopian Airports Enterprise - the carrier owns 23 domestic airports, according to its website, from Addis Ababa to Arba Minch; Aerospace manufacturing - to extend Ethiopia’s maintenance, repair and overhaul services, negotiations are under way with companies including Boeing, Airbus, Bombardier and Safran, according to Mr Tewolde.