Ethiopia’s Government Postpones Ethio Telecom Privatisation Process

Image sourced from FurtherAfrica.

The government of Ethiopia has announced today that it will be postponing the ongoing privatisation process of the state-owned Ethio Telecom, and did not set a timeframe for when the process will continue.

In an announcement posted to Twitter by the official account of the Ethiopian Ministry of Finance, the Ethiopian federal government says that due to “recent developments” and “fast-moving macroeconomic changes both globally and from a country perspective” the government of Ethiopia has decided to postpone the privatisation process of Ethio Telecom.

“The government of Ethiopia believes that taking time to accommodate the improved macroeconomic situation as well as continually improving the financial performance of Ethio Telecom will result in better value for all parties involved and in particular the citizenry of Ethiopia,” the announcement reads.

In September 2021, the Ethiopian government released a request for proposal (RFP) for the partial privatisation of Ethio Telecom to invite proposals from “interested parties who can add value to the company by bringing in the best practices in terms of operations, infrastructure management, and next-generation technological capabilities.”

Since June last year, the government of the Horn of Africa country has been planning to sell a 40% stake in the country’s sole telecom. According to reports, the government plans to retain a 55% stake in the operator while the remaining 5% will be offered to domestic investors through an initial public offering.

The proposed sale of a large minority stake in the telecom came as part of the Ethiopian government’s plan to liberalise the country’s monopoly in its telecom sector. Another key piece of the plan was for two foreign carriers to be granted licenses to operate in the vast, nearly-untapped market. One of the carriers selected by Ethiopia was Safaricom which is currently in preparations to launch in the country.

“Government wants state-owned enterprises to be competitive and productive, the authorities’ motivation for selling a part of Ethio Telecom to private operators,” Deputy Director of Public Enterprises, Holding and Administration Agency, Zinabu Yirga said at the time.

The “recent developments” and “fast-moving macroeconomic changes both globally and from a country perspective” that the announcement mentions could be both the ongoing Russo-Ukrainian conflict in Europe which has had many knock-on effects both in the world of tech and otherwise, and the ongoing conflict in the Tigray region of Ethiopia, one which has left half a million people dead.

“The government of Ethiopia remains committed to finalising the privatisation process and looks forward to re-engaging in due course with existing and additional parties that have expressed interest in the RFP,” the announcement concludes.

By Luis Monzon
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