Foreign firm invited to manage state wholesale enterprise

The federal government is to subcontract the management of the state owned Merchandise Wholesale and Import Trade Enterprise (MEWIT) to a foreign firm, a move aimed at advancing attempts to stabilize the market.In the last couple of months, the government has been contemplating to invite multinational companies such as Wall-Mart that specialise in wholesale distribution. A team of experts have also visited India to learn more on how India has attracted such companies to enter its market. Currently the government is devising several methods to contain the soaring cost of living, which the International Monetary Fund says, is the main threat that could slow down the country’s economic growth.

Among efforts undertaken to curb annual inflation rate recorded at 32 percent in January is to overhaul MEWIT including hiring a foreign firm to spearhead the enterprise’s top management.The government placed a new general manager replacing Yimam Mohammed who had led the enterprise for about a decade. The new boss at MEWIT, Gemeda Aleme, would soon operate under the foreign firm, according to reliable sources.

However Gemeda told Capital that he is unaware of the arrival of foreign management, but says MEWIT is currently undertaking institutional reforms to enhance its operations.MEWIT processes both retailing and wholesale of food items, imported and locally produced construction and house products. This gives it a significant say on how the local market functions.Despite its key role to stabilize the market, residents have for long criticized MEWIT’s trading. The enterprise has been accused of only stepping in after shortages hit the market and soaring prices burden consumers.

The state enterprise, which has the largest reach with more branches spread across the country than any other private or state company, has had good records at times. MEWIT’s role in recent years was appreciated when construction materials prices hiked, and particularly cement shortage hit the market. During last fiscal year it also helped consumers cope with sugar and edible oil soaring price by flooding the market with the product serving as a distributor itself. Earlier this budget year the Privatization and Public Enterprise Supervising Agency (PPESA), which has a mandate to control state enterprises including MEWIT, was looking into merging the enterprise and another state owned market enterprise Et Fruit which is tasked on agricultural products’ marketing. According to reliable sources, the merge was aimed at establishing a huge mart that could potentially and effectively control retailing market in the country. The plan was however put on ice and Et Fruit will continue operating independently.

Sources said that PPESA is now considering another merger; to combine Building and Construction Materials Supplier Enterprise with MEWIT. “It is easier and logical to merge the two enterprises as both distribute mostly similar industrial products such cement and other construction materials,” one official told Capital.MEWIT was established in 1993 through the merger of former trading groups including the Ethiopian Domestic Distribution Corporation and the Ethiopian Import Export Corporation. MEWIT has currently a total of 82 branch offices throughout Ethiopia. These branches are classified in to three regional groups: Addis Ababa Commercial Departments (13 locations), Northern Commercial Departments (34 locations), Southern Commercial Departments (35 locations).

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