Ethiopian Airlines is one of the key holdings in Ethiopia Investment Holdings portfolio

Ethiopia has one of Africa’s biggest sovereign wealth funds

The Ethiopian Government has transferred 27 state-owned enterprises to a new $38bn sovereign wealth fund, including some of Africa’s biggest and most successful companies such as Ethiopian Airlines and Commercial Bank of Ethiopia. Ethiopian Investment Holdings controls assets worth some ETB 2 trillion ($38 bn) and annual revenues of $6.2 bn. The assets are 34% of Ethiopia’s economy measured by gross domestic product (GDP).

Ethiopian Investment Holdings (EIH) was set up in December 2021 by Act of Parliament to act as a sovereign wealth fund for Ethiopia and to improve the running of the portfolio of state-owned enterprises from the point of view of the shareholder. Its role in Ethiopia’s economic development includes a focus on the way capital is deployed and the decision-making, accountability and performance management systems.

CEO Mamo Esmelealem Mihretu, appointed in February, said the firm is a milestone toward a vision of “modern and dynamic institutions  to cultivate a marketplace that meets needs and rewards ingenuity and effort”.

EIH is a key shareholder in the new Ethiopian Securities Exchange (ESX), currently raising capital as part of preparations for launch as a key part of Africa’s capital market development. EIH is also likely to contribute many listings by share offers and floating equity in many of the companies it owns. The company will also act as co-investor to foreign investors coming into Ethiopia.

The portfolio includes:

  • Ethiopian Airlines, formed in 1945, recently boosted annual revenues by 79% to $5bn and profits by 90% to $937m, according to a recent announcement cited in this report on Business Insider. to ual revenues and 11% return on invested capital. It flies to 127 international and 22 domestic destinations.
  • Commercial Bank of Ethiopia with revenues of $1.6 bn and has return on assets of about 1%. Over 80 years it has grown to have more than 35m customers.
  • Ethio Telecom first introduced telephone services in the 1900s and was monopoly provider until 2020, before a licence was awarded to Safaricom Telecommunications Ethiopia in 2021. Ethio Telecom has 44.5 m mobile customers and more than 23 m internet subscribers, with revenues of $1.05 bn a year. 
  • Ethiopian Shipping and Logistics Services Enterprise was formed in 2016, out the merger of four companies. It has nine cargo ships and two oil tankers, as well as heavy trucks, seaports and dry ports. Revenues are $490m and return on invested capital is put provisionally at 24%.
  • Ethiopian Electric Utility does power distribution,  sales and service for a country where only 44% of Ethiopians have access to electricity. Revenues were $332m and return on assets only 0.2%.
  • Ethiopian Sugar Industry Group grows sugar cane and refines it into sugar and by-products such as ethanol, molasses and power. Revenues are some $178m across 13 plants.
  • Ethiopian Insurance Corporation has been in the sector for 45 years and is the dominant force. Revenues are $98.7m and return on assets is some 7% over 30 types of non-life policies and 15  kinds of life insurance.

Other businesses include Ethiopian Construction Works Corporation, which builds infrastructure, including for transport and for water, irrigation and dams as well as buildings; Ethiopian Trading and Business Corporation which controls businesses in areas such as coffee, grain, consumer products, fruit and vegetables; and Federal Housing Corporation which administers over 18,000 properties. EIH companies also dominate tourism, petroleum imports and supply, printing, and producing and distributing education materials, and the toll roads built in recent years.

The authorised capital is Birr 100m ($1.9m) of which a quarter is paid up.


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