The Ethiopian Public Procurement and Property Administration Agency has passed a new directive that allows governmental institutions to purge assets that cost up to half a million ETB. The directive is meant to reduce the cost that institutions incur, especially from assets that are rarely or never put to use.
According to the agency’s director, Hadji Ibsa, the previous directive was responsible for a lot of wastage and, subsequently, costs that were draining the finances of governmental institutions. The previous regulation only allowed institutions to purge assets that cost 1,000 ETB individually and up to 100,000 ETB collectively.
The new regulations allow for up to 5,000 ETB worth of assets individually and up to half a million ETB collectively. The new directive has been approved by the Ministry of Finance and has been distributed to 185 governmental institutions.
The Public Procurement and Property Administration Agency is going to be responsible for purging items such as vehicles, machinery, scrap metal, and the like that are more costly, while low-cost assets can be purged by the institutions themselves.
Recently, the Ministry of Finance has also established a Liability and Asset Management Corporation to mitigate the debt and inefficient practices of governmental institutions, including managing the debt of 7 governmental institutions that amounts to more than 780 billion ETB.