EIH holds first onboard summit spearheading generational wealth

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(Photo: Anteneh Aklilu)

The Ethiopian Investment Holding (EIH), a recently formed state owned commercial entity which is a public wealth fund that holds 27 mammoth public enterprises with an estimated asset holding of over two trillion birr within its portfolio, has conducted an onboard summit.
The aim of the formation of EIH was to maximize the value of state owned assets through professional management leveraging international best practice and as Mamo Mihretu, founding CEO of EIH, explains, the 27 assets that are classified in eight sub-sectors play a significant role on the Ethiopian economy.
“In the past budget year, the enterprises generated a revenue of 350 billion birr, which is projected to grow by 46 percent to reach 540 billion birr for the current budget year. Moreover, in terms of profitability and resilience they have contributed 10 percent to the GDP,” Mamo explained during the summit which was held at the hall of the newly inaugurated Commercial Bank of Ethiopia’s (CBE) HQ.
These enterprises have settled 16 billion birr as dividends for the government and their tax contribution was eight percent of the GDP.
“If these assets shall be managed professionally with international best practices, they will certainly contribute to a better Ethiopian economy,” the CEO said.
Mamo told media that the main objective of EIH is to serve as a strategic investment arm of the government.
“It will finance development and create wealth for the current and future generation of Ethiopia. Source of finance for development comes from budget that is aligned with tax, external aid and loan; but as per the experience of other countries we have to finance development projects with alternative sources,” Mamo said, adding, “the formation of EIH shall utilize and mobilize the assets of public enterprises as a development instrument and create better wealth.”
“Unlocking the value with professional administration will be the strategy to meet the goal of the strategic investment arm of the government; in addition to mobilizing the assets and creating new values, and attracting investment by creating skills and involving new investments in conjunction to including foreign capital flow,” he added.
Ahmed Shide, Minister of Finance and board member of EIH, said that the mission of the public wealth fund is to usher in global investment and modern capabilities in line with the interest of Ethiopians.
Mamo said that the 27 enterprises, which have over two trillion birr in assets collectively, currently registered under EIH, are mainly selected though different criteria including commercial goals, with more enterprises to be included in the future.
Through the hospitality sub sector Ghion Hotel, Hilton Hotel, Spa Service Enterprise, and Genet Hotel are included, while the transport and logistics sub sector has added Ethiopian Airlines, Ethiopian Shipping and Logistics Services Enterprise, and Ethiopian Toll Roads Enterprise.
Ethiopian Trade Business Corporation, Ethiopian Agricultural Businesses Corporation, and Ethiopian Tourist Trading Enterprise have been included in the trade sub sector, whereas the Ethiopian Pulp and Paper, Educational Materials Production and Distribution Enterprise, Berhanena Selam Printing Enterprise, and the Ethiopian National Lottery Administration have been included under the manufacturing sub sector.
The finance sub sector accommodates the financial giant CBE and Ethiopian Insurance Corporation, while Land Bank and Development Corporation, Ethiopian Construction Works Corporation, Ethiopian Engineering Investment Group, Federal Housing Corporation, and Ethiopian Electric Utility are part of the construction and real estate division.
The Ethiopian Mineral, Petroleum and Biofuel Corporation, Chemical Industry Corporation, Sugar Industry Group, National Alcohol and Liquor Factory, and Ethiopian Petroleum Supply Enterprise are part of Chemical sub sector, whilst the communication sub sector is handled by Ethio Telecom.