Ethiopia is set to make a historic move by listing a 10% stake in Ethio Telecom, the state-owned telecommunications company, on the country’s newly established stock exchange. This significant step forms part of Ethiopia’s broader economic reforms under Prime Minister Abiy Ahmed’s administration, aimed at encouraging private sector participation in key industries.
Ethio Telecom, which has long held a monopoly in Ethiopia’s telecom sector, currently serves over 120 million people. The partial privatisation will allow local and international investors to buy shares, marking the first firm to be listed on the Ethiopian stock market. Following the initial 10% sale, an additional 45% stake will be made available to private investors, according to Brook Taye, CEO of Ethiopia Investment Holdings.
Ethio Telecom’s dominance faced competition for the first time in 2022 when a consortium led by Kenya’s Safaricom won Ethiopia’s first privatised telecom licence. However, Taye emphasised that the market still has room for multiple operators. “We see this as a three-operator market, especially when you add B2B and B2C sectors and broadband services for homes and offices. It’s a huge opportunity,” he said.
The Ethiopian government’s liberalisation efforts align with its broader objective of enhancing competition, boosting economic growth, and modernising telecommunications infrastructure. Brook Taye confirmed that legislation allowing foreign investors into the market is expected to pass in parliament within the next two to three months, opening the door for further competition.
In addition to the telecom sector, Ethiopia is opening its banking industry to private investment. Banks from North Africa, West Africa, and neighbouring countries have already expressed interest in entering Ethiopia’s growing banking sector. The entry of foreign banks is expected to reshape the country’s financial landscape, increasing access to capital and improving the efficiency of the banking system.
Ethiopia’s shift towards privatisation in sectors like telecommunications, banking, and transportation is part of its ongoing economic reforms to encourage growth and attract foreign investment. The listing of Ethio Telecom on Ethiopia’s stock exchange signifies the beginning of a new era, reflecting the government’s commitment to modernising key sectors and opening them up to private investment.
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