ETHIOPIA – The government of Ethiopia has unveiled that it will sell a minority stake in Ethio Telecom, the sole telecommunication operator, and grant two telecom licences to private firms as the government opens sectors long closed to outsiders.
State minister of finance, Eyob Tekalign Tolina, said that the state intends “to sell up to a 49% stake in Ethio-Telecom to private firms and give telecom
“Ethiopia plans to make Ethio-Telecom a first-class service provider. The government plans to open the sector to competition in addition to partial privatisation, to improve Ethiopia’s digital footprint,” he said.
According to Business Day report, it is estimated that Ethio Telecom, the country’s only mobile and internet provider, has more than 40-million customers.
It has emerged that stiff competition is expected from foreign multinationals keen on entry into one of Africa’s largest markets, but details of the interested companies are yet to be revealed.
Economic reform to attract investors
Ethiopia is Africa’s fastest-growing economy but faces soaring debt, poor-performing industries and a foreign exchange shortage.
Last year, Prime Minister Abiy Ahmed announced plans to privatise a swathe of industries and allow foreign and private investors into key state-owned companies in an effort to attract new players to the economy.
The government owns most of Ethiopia’s major industries, and foreign businesses are kept out of banking, retail and other key sectors, unlike other rapid-growing African economies.
Recent development in various sectors have affirmed that the country is set for a major reversal of longstanding policy, and will also open parts of its agricultural sector to outsiders.
Eyob said several state-owned sugar projects would be sold, with foreign firms given the option of direct sale or entering joint ventures of public-private partnerships.
“Ethiopia has sought investment from foreign buyers located in Europe, Asian and even African countries. The Ethiopia ministry of finance and economic cooperation expects the privatisation of at least five to six sugar factories within six to 12 months,” he said.
Ethiopia has in recent years invested billions in the sugar sector to meet fast-rising local demand and to bolster export revenue.
But the sector has been dogged by allegations of mismanagement and corruption and many state-run mills have suffered major losses.