Wednesday, July 20, 2016

Ethiopia’s Public Enterprises’ Debt on the Rise

The New York and London based Fitch Rating projected Ethiopia’s economic performance for the coming year. Fitch in its report underlined the increasing debt risks from public enterprises.
The report considers a range of investment carried out by the enterprises and stresses that they are heavily involved in a number of public investment programmes. It further noted the increasing trend of investments by those enterprises.
According to the report a number of public enterprises’ data transparency is weak but their financing had to exceed that of the government’s in recent years.
According to the International Monetary Fund (IMF), public enterprises’ debt was estimated to have grown by 7.4 percent of the GDP in 2015. Nonetheless, at the end of 2015 the enterprises’ debt was estimated to be 29 percent of GDP against a general government debt of 27.3 percent of the GDP.
The report by Fitch also stipulates that the rating firm expects the public enterprises’ debt to rise in the coming 2 years.
Source: Fortune

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