* Telecoms a state monopoly, banking closed to foreigners
* Had targeted joining WTO in 2015
* Ethiopia says private sector too weak for competition
(Adds U.S. comment on AGOA)
By Binyam Tamene
ADDIS ABABA, May 28 Ethiopia may delay plans to
join the World Trade Organisation in 2015 if the country is
required to liberalise its tightly regulated telecoms and
banking industries sooner than it would like, the trade minister
Kebede Chane told lawmakers late on Tuesday that member
countries had raised dozens of questions with Prime Minister
Hailemariam Desalegn's government, focusing on the time frame
for opening up the service sector to international competition.
Ethiopia's fast-growing market of 90 million people has
lured foreign investors from Sweden, China and Turkey to its
manufacturing sector. But laws deny outside firms access to
areas viewed domestically as cash-cows or politically sensitive.
Washington, which wants Ethiopia to allow more competition,
said it was committed to renewing its African Growth and
Opportunities Act with Addis Ababa, an accord that gives
Ethiopia-made textiles preferential access to U.S. markets.
"A lot of issues are being raised regarding the service
sector," Kebede said in parliament, referring to the telecoms,
banking and power industries. "We are being asked to clarify our
timetable for privatising these sectors."
Addis Ababa, with its strong state-interventionist policies,
has one of sub-Saharan Africa's fastest growing economies and
its fifth biggest.
But it has spurned the liberalising approach of other
African markets to shield its infant private sector from foreign
competition and to keep profits at home.
Reuters revealed this week that Ethiopia - once run by
communists - was pushing the door ajar to outside investors by
offering management of government-owned enterprises while
leaving the state in full control.
U.S. retail giant Walmart's unit Massmart
told Reuters Ethiopia offered a "compelling growth opportunity".
"(Washington)is interested in ways to update the legislation
to encourage diversification within Africa's economies, which
will better support the continent's growth, development and
competitiveness," U.S. Secretary of Commerce Penny Pritzker said
in a statement after visiting Ethiopia.
Other big brands are prising open the door in areas opened
up by the government. Drinks giant Diageo DGE.L bought a brewery
and fashion retailer Hennes & Mauritz makes garments in
Ethiopia. Trade officials said last year that Unilever
and Nestle were both sniffing around.
However, Ethiopia has held onto control of its telecoms
monopoly and kept foreigners out of retail and banking.
A U.S. management consultancy firm this week announced its
deal to run Ethiopia's just-launched state-owned cash-and-carry
chain, the first such retail concession.
Kebede said Addis Ababa was under pressure to deepen reform
to liberalise its service industries before the conclusion of
its current five-year economic plan ending in 2015.
"We need to give serious thought to this issue," Kebede
said. "Right now, our economy is small and still needs to
develop a lot."
The minister cited Asian powerhouse China, which he said
took 50 years to accept membership into the global trading club.
New WTO rules adopted in 2012 lowered the bar for joining
for the world's least developed countries. They allow members to
open fewer sectors, liberalise fewer types of transactions, and
only open up their markets as their economies develop.
"We are now looking into which laws are compatible with
WTO's regulations and which are not. We are taking one step at a
time. As a result, membership might not be completed (in 2015),"
(Additional reporting and Writing by Richard Lough in Nairobi;
Editing by Toby Chopra)