Ethiopia: Major Cooking Oil Producers Fail to Resume Production

Two major cooking oil producers in Ethiopia failed to resume production. One is suspected of having links with an armed group and the other is in a tax dispute with authorities.

WA Oil Factory, located in Debremarkos town in the Amhara region, is Ethiopia’s biggest edible oil processing plant. Owned by renowned investor Worku Aytenew, WA was only able to import raw materials once since its inauguration in June 2021. The investor is reportedly staying abroad, according to information obtained from WA staff and officials at the Ministry of Industry, Trade, and Regional Integration.

Despite the massive 5.2 billion Ethiopian birr investment to build this state-of-the-art facility, WA has not produced any oil at all for at least the past six months. This is because the factory has been unable to access enough foreign currency to buy the essential imported inputs it needs.

Worku Aytenaw, the owner, had to flee the country last year after the start of an uprising in the Amhara region of Ethiopia. The factory is located in the Amhara region where since last year Fano militias have been fighting security forces. Worku financed these Fano militias and Amhara special forces during the two year long war in northern Ethiopia. After the war ended in November 2022, the Ethiopian government decided to disband the Amhara Fano militia and Amhara special forces. That led to the start of an armed resistance movement by Fano and former ASF members in the Amhara region.

Worku was suspected of backing Fano. He fled the country last year. Wa Oil factory was raided by security forces last year and security forces claimed to have captured weapons from there. Following Worku’s exile, the Bank of Abyssinia (BoA) put Worku Aytenew’s residential property in Kirkos sub-city, Addis Ababa onto auction. The bank slated the floor price of the auction at 40.3 million birr. The tycoon owes BoA 37 million birr, from the residential property.

Another major cooking oil producer in Ethiopia, Shemu Edible Oil Manufacturing Share Company, has also stopped making oil for almost seven months. This company is part of the large Shemu Group, which has businesses in agriculture, logistics, and other areas.

Shemu’s problem is a tax dispute with the authorities. This tax issue has forced Shemu to halt all of its operations, leaving around 1,500 employees out of work.

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