Ethiopia has shown increasingly impressive economic growth since 1991. In practice, Ethiopia’s ruling EPRDF government retains control of a large proportion of available sources of rents and economic levers, including large state-owned enterprises and so-called ‘endowment-owned’ businesses.
The new report from the DFID-funded Africa Power and Politics Programme (APPP), Research Report 2, Rethinking business and politics in Ethiopia, studies the role of private enterprise in Ethiopia’s economic development, focusing on endowment-owned companies under EFFORT, the Endowment Fund for the Rehabilitation of Tigray. Established with resources from the Tigray People’s Liberation Front, EFFORT owns 16 companies across a range of sectors, while its corporate policy is still led by senior TPLF members. In Tigray State, many EFFORT-owned businesses have become profitable only relatively recently, but constitute a major employer and a significant patron of public goods and humanitarian causes. They are also by far the largest regional taxpayer to the Government, providing 60% of its regionally-generated revenues.
The paper was written by Sarah Vaughan, Honorary Fellow, School of Social & Political Science at the University of Edinburgh, and Mesfin Gebremichael, Addis Ababa University, Institute for Peace and Security Studies. It forms part of APPP’s Business and Politics research stream.