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Competitive neutrality is driven to ensure State-owned Enterprises operate on a level playing field while meeting public service obligations. It aims to enhance fair competition and efficient resource allocation in the economy. Globally, there are various guidelines, such as the OECD Guideline and the World Bank Toolkit on Corporate Governance of State-owned Enterprises that emphasise the importance of competitive neutrality in corporate governance of State-owned Enterprises. Many countries have also incorporated this concept into their national laws. Ethiopia has enacted several laws that endorse the fair competition of State-owned Enterprises in the market. However, there are concerns that the laws are not good enough to ensure competitive neutrality in the market. They have also been far from contemporary developments in the subject. Accordingly, this article investigates the Ethiopian competitive neutrality legal framework, and further, appraises it in light of the OECD guideline, the World Bank toolkit, and best national practices. The article finds that the legal framework involves legal issues, as well as does not grapple with the principles of competitive neutrality, as adopted in international recommendations and best practices of countries. It is not complete enough to ensure the competitive neutrality of State-owned Enterprises in the country. Therefore, this article suggests that the government should further reform the legislation and strengthen the competitive neutrality of State-owned enterprises.

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