State-owned enterprises (SOEs) have expressed opposition to a new draft procurement proclamation, arguing that it does not align with their operations
This issue took center stage during a parliamentary session held on December 27, 2023, where over a dozen SOE managers gathered to express their concerns.
The clash emerges between the government and state-run enterprises as the Ministry of Finance, responsible for drafting the bill, endeavors to strike a balance between regulatory frameworks and the distinct operational needs of these SOEs.
During the session at the parliament, the executives of SOEs maintained that the bill would harm their competitiveness. They raised specific issues regarding the anticipated effects on their ability to function.
A representative from Ethiopian Airlines stated, "The draft proclamation fails to understand how airlines currently operate. It assumes that large procurement systems can go through the same process as budget institutions. However, for Ethiopian Airlines, when purchasing Boeing aircraft, there is only one supplier, making an international competitive bid impossible."
Yasmin Wohabrebbi, deputy CEO of Ethiopian Investment Holdings, echoed these concerns but welcomed provisions allowing special exceptions to international bidding with sufficient explanation. However, she believes boards should have greater authority over procurement consistent with corporate governance principles.
Lemma Tesema, head of the legal department for Ethio Telecom, argued that requiring open bidding except under specific conditions would prevent acquiring needed technologies.
As the telecom sector faces foreign competition, Ethio Telecom needs more flexibility than other state bodies, he argued.
SOE managers also opposed submitting separate procurement rules and directives to the Ministry of Finance for approval. They argued that this step would create unnecessary bureaucratic hurdles and delay procurement processes.
Lemma from ethio telecom went so far as to suggest that it would be more effective to replace underperforming CEOs rather than impose a bill that seems to be misaligned with the operational realities of SOEs. He further questioned why the boards of SOEs cannot simply approve the rules and directives that they themselves draft.
State Minister of Finance Eyob Tekalign defended the bill, stating that it streamlines processes while still empowering entities.
He added that the bill's intention is to create a level playing field for all businesses operating in Ethiopia, ensuring fair competition and transparency.