The Addis Ababa City Administration is set to contract out twenty-four service deliveries across seven divisions. This decision aims to enhance public service delivery, as stated by Tassew Gebre in an interview with Voice of America Amharic Service. The decision was made at the cabinet level.
The services being outsourced predominantly revolve around land-related functions. The administration intends to implement these changes to curtail government spending and overcome bad governance practices across those divisions.
Tassew Gebre specified the seven divisions of the city administration slated for contracting out:
- Building License and Construction Authority
- Housing Development and Administration Bureau
- Food and Pharmaceuticals Authority
- Land Registration Agency
- Transport Office
- Housing Corporation
- Land Development and Administration Office
Without forgetting the question of desirability, there are concerns regarding the fairness and transparency of this transition to the private sector, particularly in light of widespread corruption within various government levels. Tassew Gebre told VoA Amharic that the process would maintain “transparency”, although a definitive timeline for the service transfer remains undisclosed.
Another pressing concern revolves around the fate of government employees in these sectors. Gebre indicated that private companies taking over contracts from the city administration would absorb all the employees. However, it remains unclear if the city administration will retain regulatory authority over these companies after the transfer.
Notably, there had been politically driven policy shifts at the city administration level, primarily aimed at altering Addis Ababa’s demographic composition. It remains to be seen whether the proposed privatization of land-related city services doesn’t harbor ulterior political motives.
Neoliberal Trends Deepen in Ethiopia’s “Home Grown Economy”
Under Abiy Ahmed’s Administration, privatization trends emerged early on. Initially, an advisory board was established to provide a veneer of legitimacy to this privatization initiative by involving prominent national figures. However, Abiy Ahmed swiftly sidelined this board and initiated the sale of national assets, including shares of the state-owned Ethio Telecom. Ethiopian Shipping and Logistics Service Enterprise, and Sugar factories were also up for sale – according to some sources.
In his latest speech to party and government officials, Abiy Ahmed disclosed plans for Ethio Telecom to release 10 percent of its shares to Ethiopians, with Ethiopian Airlines slated to follow suit at an unspecified time. Amid ongoing conflicts in the Amhara region and other parts of the country, escalating inflation rates leading to a burdensome cost of living for millions, coupled with mounting debt, his government is perceived to be facing financial strain. Yet, his government has prioritized what is said to be a $15 billion palace project in the capital and he refused to tell the parliament where the money for the project is sourced from. Speculation looms over the potential partial sale of Ethiopian Airlines.
While the government promotes the “homegrown” nature of its economic policy, the practical reality indicates a deepening adherence to neoliberal economic principles in Ethiopia. Ahmed’s administration maintains close ties with the IMF and the World Bank, raising doubts about these Bretton Wood institutions funding the purported “Home Grown Economic Model.”
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