Proclamation to Establish a National Agency to Promote the Participation of Eritreans in the Ownership of Public Enterprises

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YoL 20l20l2 No. 6 Asmarar 3d Decembesr2[l2 Price: 10.00 Nakfa
A Proclamation to Establish a National Agency to
Promote the Participation of Eritreans in the
OwnershiP of Public Enterprises

A Proclemetion to Establbh e Itteilional Agcrcy to Prsr* frc
Perticipation of Eritreens in thc Orncrship of FrbAG Erbrprf;rs
WI1EREAS, 6xp of thG primary econo,uric goob of Eritrea b to ensrc 5s ‘nfigrnify and
posperity of tlre Eriuem societY;
WHER3ASL in pnnsuancc of its deretopmeil poHcy of sustaidh mb grontth in
fost6ing thc socioeconomic enlrancenrent of Eritrcm srftf)r, th Eduem Gwsrffi
has initiae4 among othsrs, a slrae-equity based pdticip{tim of Eriftm citim in
public enterprises; and
WHE1EA$ the Eritr€an Government is cmfid€ilt thd, thc qo poricipmim of
Eritrean citizens in direct strreequity invesilnqrts in existing md futurG ptblic
enterprises woul4 aside from providing r€turns to mid citizensr enlrmce thc nsw phase of
accelerated economic growth which is attributable to the steadfasnness, diligorce and
unyielding support ofthe people, and sustained Government investnent;
NOW, TI{EREFORB, in consideration of the above premises, it is proclaimed as
Article l. Short Title
This Proclamation may be cited as the “National Agency to Promote the Participation of
Eritrean Citizens in the Ownership of Public Enterprises Establishment Proclamation No.
t1U 2012″
Article 2. Definitions
In this Proclamation, unless the context requires otherwise:
(l) ,,Board” means the Board of Directors of the National Agency established under
Article 6 of this Proclamation;

(2) ,.Business Organizations” means those organizations established under Article 212
of the Transitional Commercial Code of Eritrea, namely a Share Company’ Private
Limited Company, Limited Partnership, General Partnership or Ordinary Partnership’
but excluding a Joint Venture for purposes of this Proclamation;
(3) ..Eritrean Associations” means associations legally established by Eritrean citizens
under the Transitional Civil Code of Eritrea;
(4)..Eritrean citizen” means a person so defined by The Eritrean Nationality
Proclamation No. 2l I 1992;
(5) .rNational Agency” means the National Agency established under Article 3 of this
(6) .’Par Value of Share” means the face value of each company’s share so determined
and registered in the initial share capital of the company;
(7) ,.public Enterprises,, means partially or wholly State-owned enterprises operating
under the laws of Eritrea;
(8) ,.Secondary shere Market” means a non – profit mechanism operating under the
‘l’ransitional Civil code of Eritrea for transferring ownership (selling and buying) of
comPany shares;
(9)..Selling Price of a $h*lrn” means the unit selling price of a company’s share as
dekrmined by the N.ttirliai itgctic:y raking into account the objective of encouraging
broad*hased partic ipation of Eritrean citiz’ens;
(t0) ..smdl pubtic Entcrprises’illean$ state-owned public enterprises so categorized
by the National Agency. taking into account their respective investments, related
$tfltus and number of employees; and
(ll) A singular word shall inslude the plural and vice verss’ while a reference to the
rnale gender shall also incl*ile thE fernale gender’

5i I,
(!)There is hereby established the National Agency to Promote the Participation of
Eritrean Citizens in the Ownership of Public Enterprises (hereinafter the *Nrtionel
Agencyr) as an autonomous entity having its own juridical personality.
(2) fhe National Agency shall be accormtable to the hesident of the State of Eritrea.
Article 4. EggCJWgg
The National Agency shall have its head offrce in Asmara, otrd it may, as it dee’ms
necessary, open branch offices within and outside Eritrea.
Article 5. Obiective and ResDonsibilities of the National AsencY
(l) The objective and responsibilities of the National Agency shall be to undertake,
implement and ensure the participation of Eritreans living in Eritea and abroad in
national economic development activities tlnough the direct transfer of orvnership
of Small Public Enterprises or of shares in Public Enterprises converted into share
(2) The National Agency shall, for implementing the responsibilities entnrsted to it
pursuant to this Proclamation, have the powers and duties to:
(a) identify the Public Enterprises that shall be converted into share companies
and / or those already existing as share companies that would offer shares to
Eritrean citizens;
(b) identify Small Public Enterprises the ownership of which shall be transferred
to Erihean business organizations, associations and individual citizens;
(c) determine the number of shares to be offered, the par value and selling price
of each share and the ceiling to the number of shares that can be bought and
owned by Eritrean business organizations, associations and indir-‘idual

(d) endeavor, in cooperation with pertinent Government institutions and public
associations, to ensure the broadest participation of Eritreans living in all
regions of Eritrea and abroad in thb ownership of shares of Public Enterprises;
(e) provide, in cooperation with the management of the relevant Public
Enterprises, full and timely information to the Eritrean public regarding the
identity, net worth and profile of th.e share companies offering shares’ the par
value and selling price of shares on offer, the ceiling to the number of share
other Pertinent information;
(0 provide full and timely information to the Eritrean public regarding the asset
base, net worth, reservation price and the sale of small Public Enterprises
whose ownership shall be transferred to Eritrean business organizations’
associations and individual citizens;
(g) cause the transfer of ownership of small Public Enterprises to Erihean
best offer in terms of new investments, business plans, quality of management
and Price;
(h) enter into contracts with any national or foreign natural or juridical person;
(i) sue and be sued in its own natne; and
(k) perform all and whatever legitimate, necessary and incidental acts to attain its
The National Agency shall, in the implementation process of the sale of equity-
share of Public Enterprises ownd by the Government to the Eritrean public’
ensure that each of such Ptrblic Enterprises shall first be converted into a share
company in accordance with the requirements of the Transitional commercial
code of Eritrea and cause the same to offer such shares to Erihean business
organizations, associations and individual citizens inside and outside Eritrea’
provided that:

(a) valuation of the net worth of the Public Enterprises shall have been carried
out by competent, independent and credible individuals or institutions as a
condition precedent;
(b) the shares shall be offered in Nakfa to Eritrean citizens living in Eritrea
and in US Dollars to citizens residing outside Eritrea;
(c) a secondary share market shall be legally established to facilitate
transactions in shares and encourage investment;
(d) transactions in the secondary share market may not allow for ownership of
shares above the ceiling fixed by the National Agency for each Public
Enterprise; and
(e) the terms and conditions for the sale and transfer of the shares of Public
Enterprises to each Eritrean buyer shall, in accordance with the relevant
Eritrean laws, be stipulated and documented in a contract of sale between
the concemed Government entity and the luyrt, it being understood that
due registration shall be effected with the Inland Revenue Department of
the Ministry of Finance and the Business Licensing Office of the Ministry
of Trade and Industry.
The transfer of the ownership of Small Public Enterprises by the National Agency
to Eritrean business organizations, associations and individual citizens residing
within or outside Eritrea shall be implemented as follows:
(a) the price of transfer of ownership of Small Public Enterprises shall give
due weight to the business plan of the prospective buyers, including size
of new investment, quality of management, envisaged improvement of
service, and growth prospects of the business; and
(b) the terms and conditions for the transfer of ownership of Small Public
Enterprises, which may vary among enterprises depending on the sector as
well as the nature and importance of each enterprise; shall, in accordance
with the relevant Eritrean laws, be stipulated and documented in a confiact
of sale between the concerned Government entity and the buyer. The

contract of sale shall, inter a/ia, include a stipulation that such purchase
and mnsfer may not create an opportunity solely to amass land in disguise
and that the size of land may be re-parceled so as to adjust it to the
business purposes of the enterprise.
Article 6. Orsans of the National Aeencv
(l) The organs of the National Agency are constituted as follows:
(b) the General Manager; and
(c) the necessarY staff.
(2) The Board members and the General Manager shall be appointed by the
President of the State of Erihea’
Article 7. Authoritv of the Board
(l) The Board is hereby entrusted with the full authority and ultimate responsibility to
ensure that the National Agency implements and realizes in real and concrete
terms its exclusive objective and responsibilities provided under this
(2) The Board, in facilitaring and expediting the participation of Eritreans in the
. (a) consider, formulate, layout and establish the performance time
schedules, the pragmatic locations and the related factors and
mechanism for the implementation of the participation of Eritreans in
the ownership of the said Public Enterprises;
(b) submit its projected annual budget to the Ministry of Finance for
(c) in consultation with all concerned bodies, assign Eritrean representatives
of the National Agency abroad for the :

(i) conducting of seminars to Eritreans on the motive, nature and
purpose of the project objective of the National Agency; and
(ii) provision of necessary services and assistance to implement the
objective of the National Agency;
ensure that bi-monthly reports on the activities and achievementsn along
with impediments, if otrlr as well as possible proposals and
recommendations are submitted to it by the General Manager for its due
consideration and appropriate action;
submit to and update the President of the State of Eritrea with its bi-
annual report on the progress and status of the implementation process
in the participation of Eritreans in the ownership of Public Enterprises;
execute whatever legitimate and contributory actions.
Article 8. Meetines of the Board
(1) The Board shall elect its Chairperson. It may also appoint a secretary for each
meeting so as to formalize and legalize the Minutes and Resolutions of the Board.
(2) The Board shall conduct a regular meeting every ninety (90) days and, in case of
pressing circumstances, meetings may be called earlier by the Board Chairperson or
by the General Manager of the National Agency through the former.
(3) The agenda item for each of such meeting shall, subject to the prior consideration and
approval by the Board Chairperson, be provided to each Board member.
(4) While the attendance of three Board members shall constitute the quorum for each
meeting, decisions shall be taken by consensus, provided that in the case of four or
more Board members attending, decision shall be taken by a simple majority of those
present or, in the case of a tie, re-convene another meeting.
Article 9.
(1) The General Manager is, in strict compliance with the provisions of this
Proclamation and under the overall Board authority, supervision and directives,

hereby entrusted with the management duties and responsibilities of the National
Without limiting the generality of the foregoing, the General Manager shall:
(a) prepare and submit to the Board detailed:
(D blmonthly reports on the performance and progress of the
implementation process to rcalize the objective of the
National AgencY; and
(ii) specific records of the Eriteans who have executed and
completed their respective participation in the ownership of
Public EnterPrises;
(b) represent the National Agency before any third parties within or outside
Eritrea and to perform and execute on its behalf any act for and related
to its routinely-expected conduct of his management responsibilities;
(c) in particular, be empowered to sign and execute for the National Agency
any contract, except the contracts of sale mentioned in Article 5 (3) and
any Eritrean third party abroad to sign and execute a contract on his
behalf and on behalf of the National Agency;
(d) open and operate bank accounts in whatever culrency for and in the
name of the National Agency, whether it be in Eritrean and / or foreign
(e) subject to the prior approval of the Board, be empowered to employ and
dismiss such staffand personnel of the National Agency;
(f) keep and cause to be kept accounts, records, books and up-to-date
(g) sUbmit financial books and accounts to an accredited external auditor
for each yeaf o( period, who, in turn, shall present the audit report to the
Board; and

(h) appoint an advocate to solicit legal advice and represent the National
Agency before courts of law and quasi-judicial bodies, as and when
Articlc 10. Judicial Review
(l) A pros@ive buyer of a Small Public Enterprise or of shares in a Public
Enterprise offered for sale aggrieved by an adverse decision of the National
fusncy regarding said sale may appeal to the High Court of Eritrea within thirty
{30) calendardays.
(2) Th€ High Court may s€t aside the decision where convinced that it was
(3) Th€dscisionof the Higlr Court shall be final.
Article ll. InoonsistencY
Any proclamatioq regulation, directive, guideline or practice which is inconsistent with
or contrary to the provisions of this Proclamation shall not prevail over matters and issues
prcvided for in this Proclamation.
Article 12. Duration
The duration of the National Agency shall be for an indefinite period.
Article 13. Entn’into Force
This Proclamation shall enter into force as of the date of its publication in the Gazette of
Eritrean Laws.
Done at Asmara, this 3d day of December, 2012,
The Government of Eritrea.