July 19, 2024

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Ethiopia Suspends the Sale of Ethio Telecom to Foreigners

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Ethiopia has suspended the sale of its state-owned telecommunications operator, Ethio Telecom, to foreign investors. Instead, the government is prioritizing domestic retail investors. Initially, the government had planned to sell 45% of Ethio Telecom to foreign investors, but the bidding process was canceled in November after Orange SA withdrew its bid.

Although, Emirates Telecommunications Group Co. had also been considering a bid.

Abdurehman Eid, chief executive officer of Ethiopian Investment Holdings said “There were bidders, but each one of them has left the process at one point.” Abdurehman Eid is handling the process with the Ethiopian Ministry of Finance.

Ethiopia has decided to shift its focus from selling a stake in Ethio Telecom to foreign investors to prioritizing the sale of a 10% stake to domestic retail investors. In an interview this week, the minister stated that the level of foreign interest was not as high as Ethiopia had hoped for.

Furthermore, he mentioned that retail investors in Ethiopia are showing a “huge appetite” for the shares, and the government plans to expedite the sale to this group. The minister also noted that the focus on attracting foreign investors will resume after Ethio Telecom is listed on the Ethiopian Securities Exchange, which is expected to begin operations in October.

In October 2023, Ethiopia formally founded the Ethiopian Security Exchange (ESX). Since then, several milestones have been crossed to establish a fully operational stock exchange. The formation of ESX as a share company was followed by the implementation of the Capital Market Proclamation, which was ratified in July 2021, and the formation of the Ethiopian Capital Market Authority (ECMA), the regulator overseeing the activities of ESX itself and other market players for the protection of investors. Read More…

Ethio Telecom, the largest telecommunications operator in Ethiopia, has been operating as a monopoly for decades. As of January, it had 74.6 million subscribers and reported a profit of 11 billion birr ($191.6 million) for the first half of the year. The company is now set to be listed on the Ethiopian Securities Exchange (ESX), along with five other state-owned companies.

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