The federal government is preparing yet again to privatize sugar estates under the Ethiopian Sugar Industry Group as part of ongoing economic reforms, reviving an initiative that has failed repeatedly over the past eight years.
In a letter addressed to International Monetary Fund (IMF) Director Kristina Georgieva, Finance Minister Ahmed Shide stated the privatization process would begin anew after government authorities and heads of Ethiopian Investment Holdings (EIH) finalize efforts to rehabilitate the beleaguered Group, formerly known as the Ethiopian Sugar Corporation.
“Our recent efforts have focused on financial restructuring and operational rehabilitation of individual sugar estates, resulting in positive EBITDA of the Ethiopian Sugar Group. Once this process is advanced, we will undertake new valuations of the assets, as required by law, and restart the privatization process,” reads the letter.
At present, ESIG operates eight major sugar estates, five of which operate independently as subsidiaries. These include Wonji Shoa, Metehara, Fincha, Kessem, and Tana Beles. The remaining three—Arjo Didessa, Omo Kuraz II and Omo Kuraz III—are still under the direct control of the Group.
The Group reported comprehensive losses of 22 billion Birr in 2021/22, and nearly 10 billion Birr in losses the following year.
The government first attempted to privatize more than a dozen sugar estates (including ones that are yet to go operational) immediately following the political transition of 2018. It issued a Request for Information (RFI) to prospective investors, and the process ultimately went nowhere.
In late 2020, the authorities attempted once more—this time announcing plans to privatize eight estates—but the effort fell flat owing to conflict and other factors.
In August 2022, the government floated a request for Expression of Interest (EoI) for the privatization of eight sugar factories: Arjo Dedessa, Kessem, Omo Kuraz I, Omo Kuraz II, Omo Kuraz III, Omo Kuraz V, Tana Beles, and Tendaho.
The window was eventually extended into 2023, and in March that year, the Ministry stated that more than a dozen potential buyers had expressed their interest.
However, sources indicate that security concerns and the poor financial condition of many of the estates discouraged potential bidders.
An audited report of the Group’s 2022/23 performance was published more than two years late in November 2025, highlighting the depth of its financial troubles.
The Group, which at the time was run by long-serving CEO Weyo Roba and chaired by Girma Birru, saw its revenues drop by more than 13 percent to 7.4 billion Birr year-on-year.
The Group’s comprehensive losses totaled 9.6 billion Birr during the reporting period, significantly lower than the 22 billion Birr registered the year prior but indicative of its ongoing troubles. Its forex losses also dropped by nearly 12 billion Birr to 3.6 billion Birr, while operating losses eased to 3.8 billion Birr from 15.7 billion.
In November 2025, Meleket Sahlu, deputy CEO of EIH, which oversees the Group, told Parliament that efforts to privatize eight sugar estates under the Sugar Industry Group had halted after a number of tenders failed to attract sound offers from bidders, even under direct negotiations.
“The privatization of the Sugar Industry Group has not materialized through the open tender process. The bids were insufficient. We are now pursuing direct negotiations with investors who have the capacity and commitment to revive this vital industry,” she stated at the time.
Now, the government is undertaking reforms to make the sugar factories efficient, restructure their debts, and make them more attractive to investors, according to the IMF document released last week.
“EIH-led reform efforts have prioritized improved financial reporting and operating efficiency across its SOE portfolio, with notable early signs of improvement in the sugar and logistics sector,” reads the Minister’s letter.
