Ethiopia has been in the process of privatization since 1995.Since then, a total of 287 firms were transferred from the public to the private sector for which 34 are Hotel enterprises. The primary objective of privatization in Ethiopia is to generate revenue that enables to finance the development activities under gone by the government. The total revenue obtained from the rnPrivatization program has a share less than 6% of the government expenditure for the year 2009/10 and revenue from privatization of hotel enterprises is insignificant to finance the government budget. This proves that the privatization program of Ethiopia never achieves its objective of generating revenue. rnThe effect of privatization program of Ethiopia in the case of employment is consistent with the theory. Most hotel firms reduce the number of work employees during the contract time. rnIt is expected that privatization can bring better economic development by increasing investment, enhancing technological transformation and so on. But the capital expenditure on investment is so limited that it does not bring forth development. rnTherefore privatization in Ethiopia does not meet its objectives due to poor implementation of the existing proclamations.