Ethiopian government to list 10% of telecom company on new stock exchange

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October 10, 2024
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2 min read
Ethio Telecom's office

The news: 

  • Ethiopia is set to list a 10% stake in Ethio Telecom (Ethiopian Telecommunications Company), its state-owned telecom company, on the country's newly established stock exchange
  • This landmark move marks a significant step in Ethiopia's broader economic reforms under Prime Minister Abiy Ahmed's administration, which seeks to encourage greater private sector participation.
  • Ethio Telecom, which has long held a monopoly in Ethiopia's telecom sector, serves a population of over 120 million. 

The partial privatisation will allow investors to buy a portion of the company, making it the first firm listed on the Ethiopian stock market. 

After 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 in the country’s telecommunications industry faced competition for the first time in 2022 when a consortium led by Kenya’s Safaricom won Ethiopia’s first privatised telecom licence. 

Taye emphasised that despite the entry of new players, Ethiopia remains a robust market with room for multiple operators. “We still think this is a three-operator market, especially when you add B2B and B2C sectors and broadband services to homes and offices. It’s a huge opportunity,” he noted.

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He also welcomed further investment, stressing that Ethiopia remains open to new operators interested in the market. 

This liberalisation effort aligns with the government’s goal to enhance competition, boost the economy, and modernise its telecommunications infrastructure.

Brook Taye confirmed that the Ethiopian parliament is expected to pass legislation within the next two to three months allowing foreign investors to enter the market.

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In addition to the telecom sector, Ethiopia is opening its banking industry to private investment. Several banks from North Africa, West Africa, and neighbouring countries have already expressed interest in entering Ethiopia’s banking sector. 

The entrance of foreign banks is expected to significantly impact the country’s financial landscape, potentially increasing access to capital and improving the overall efficiency of the banking system.

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Ethiopia, a mixed economy, is currently implementing major reforms to increase private sector participation. While sectors like telecommunications, banking, and transportation, have historically been dominated by state-owned enterprises, the government is gradually moving towards privatisation to encourage growth and attract foreign investment.

The listing of Ethio Telecom on Ethiopia’s new stock exchange marks a new era for the country, signalling its commitment to opening up key sectors to private investment.

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