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The House of People’s Representatives Standing Committee on Budget and Finance urged officials to reconsider the mechanism used to minimize the tens of billions of dollars of debt burden borne by public companies.
Officials from the Ministry of Finance (MoF), along with several public companies, presented their performance report for the first quarter of the year to the committee on Wednesday.
During the meeting, members of Parliament asked officials about how debt is written off while projects are still underperforming and not recovering.
Lawmakers noted that companies like the former Metal and Engineering Corporation (MeTEC), which renamed itself the Ethio Engineering Group, Yayu Fertilizer Factory, which was discontinued after costing millions of dollars, Sugar Corporation, Agricultural Works Corporation, Development Bank, and the like did not they were able to perform well.
15 of the more than 23 companies managed by the Public Company Administration and Tenure Agency (PEHAA) submitted their performance reports last week. Most of them showed very low returns, even lower compared to a similar period in the previous fiscal year.
Committee members urged officials to devise methods to make projects efficient and effective.
Responding to MPs, PEHAA Director Habtamu Hailemichael said overwhelming structural and financial reform is needed for them to be competent to produce the expected results.
The Minister of State for Finance, Eyob Tekalign (PhD), stated that the public debt of public companies exceeds 780,000 million birr.
Emphasizing the importance of reducing the debt burden of these companies, Eyob said that unless the nation manages the debt crisis it is in, the problem could end up crumbling the country’s economy into an unmanageable crisis and across the board. rule.
Parliamentarians warned last week that projects launched without the necessary feasibility studies ended up requiring more money than originally allocated and that the situation must change.
Eyob stated that the Ethiopian government’s efforts towards debt reduction and cancellation have been carried out with great concern and caution using financial systems designed and accepted to help companies alleviate their debt.
He noted that despite ongoing debt reductions or cancellations, the government will continue to prosecute people who have squandered public resources.
