ERRATIC VIEWS AND POLICY INCONSISTENCY ON PRIVATISATION MODALITIES IN ETHIOPIA: IMPLICATIONS ON THE PERFORMANCE OF FIRMS IN THE INTERNATIONAL MARKET A SYSTEMATIC REVIEW

Abstract

Background and objectives: Since 1991, several state-owned enterprises in distinct categories were transferred to the private sector under the privatisation policy in Ethiopia. The process and its modalities vary. The notion behind the implementation was to transfer those inefficient public-owned firms to the private sector with an expectation of improving defects. But, privatisation processes are neither a one-time incidence nor an immediate action. Privatisation processes are inter-linked with various macro and microeconomic and sometimes socio-political policies, and reforms. In this paper, privatisation modalities, inconsistencies, and arguments regarding the Ethiopian privatisation process are analysed.

Study Design / Material and Methods: Using a systematic literature review process, 50 papers were found and extracted in a methodical manner from PubMed, Ecobiz, and Google Scholar Databases. The analysis was undertaken following systematic categories after taking heterogeneity articles on Ethiopia’s privatisation process into consideration.

Results: The government encompasses large public-owned enterprises in the privatisation process; however, the privatisation modalities and timing are still a point of controversy among scholars. The effective privatisation process required institutional development, and the government’s promises were put to the test. The performance of enterprises was significantly impacted by legal and policy frameworks. The legal framework and consistently unstable nature of Ethiopia’s privatisation history have been observed. It has been observed that the legal framework and consistently unstable nature of Ethiopia’s privatisation history.

Practical implications: This study has a practical contribution and input by giving insights for researchers, practitioners and policy makers for providing alternative privatisation modalities, appropriate for the Ethiopian context.

Conclusion and Summary: The mode of privatisation must be pre-examined and carefully selected by considering important success factors including public interest, objectives of endeavour, and the sustainability of firms. The techniques must consider the nature and characteristics of the firms studied, clarity and well-prepared privatisation options.