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The repayment of foreign debt by state-owned enterprises such as the Ethiopian Electric Power (EEP) and the Public Enterprise Holding and Administration (PEHA) is dragging far behind schedule as the federal government continues to grapple with the country’s crippling forex drought.

Public enterprises under PEHA planned to service at least half a billion USD in foreign debt over the first half of the year, according to a six-month report from the agency. However, total foreign debts serviced by SOEs over the period were as low as USD 39.7 million.

Domestic debt repayment has fared better, with SOEs managing to service close to 87 percent of a planned 9.09 billion birr over the first half of the financial year.

The latest debt bulletin reveals Ethiopia’s total public sector debt, both foreign and domestic, sits at USD 64.3 billion. The federal government is on the line for two-thirds of the total, while SOEs owe the remainder, valued at over USD 22 billion.

Ethiopia serviced USD 624 million in external public debt between July and December 2023. The federal government paid off a little over USD 318 million, while SOEs such as Ethiopian Airlines serviced close to USD 306 million.

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The flag carrier accounts for the largest portion of debts serviced this year, according to the bulletin, which indicates SOEs under the country’s sovereign wealth fund (Ethiopian Investment Holdings) are faring better than their counterparts under PEHA.

PEHA oversees close to a dozen SOEs, including Ethio Post, EEP, the Industrial Parks Development Corporation (IPDC), and the Development Bank of Ethiopia (DBE). The DBE is the largest foreign currency generator on PEHA’s list, accounting for at least 63 percent of USD 261 million generated in the first half of the year. The total is far below the USD 410 million target set by PEHA in June 2023.

The performance report hints at a decline in domestic income as well, with SOEs falling at least 25 percent short of 27.6 billion birr in targeted domestic revenues. It translates to just half of the 4.7 billion birr target for gross profits.

SOE dividends paid to the government has also dropped, with five of SOEs under PEHA able to pay only 55 percent of the planned one billion birr in dividends over the first half of the year.

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