Next week, Ethio Telecom will make history as the first company to be listed on Ethiopia’s newly established stock exchange, with the government planning to sell a 10% stake in the state-owned telecom giant. The announcement was made by Brook Taye, CEO of Ethiopia Investment Holdings, in a statement to Reuters. This development marks a significant milestone in Prime Minister Abiy Ahmed’s efforts to modernize Ethiopia’s economy by attracting private investment and creating a more competitive market environment.
The initial 10% float of Ethio Telecom is part of a broader government strategy, which aims to gradually divest a further 45% stake in the company. “This will give us a sense of valuation,” said Brook, underscoring how the sale will provide crucial insights into the company’s market value as the privatization process moves forward.
Ethio Telecom has long held a dominant position in Ethiopia’s telecom industry, serving a population of about 120 million. However, the sector saw its monopoly end in 2022, when Safaricom, a consortium led by Kenya’s largest telecoms provider, was awarded the first private telecom license in Ethiopia.
Brook Taye also suggested that Ethiopia is open to introducing a second private telecom operator. “We still believe this is a three-operator market, especially when you consider the B2B and B2C sectors, along with broadband services for households and businesses,” he stated. The Ethiopian government is expected to relaunch the tendering process for a second telecoms license in the near future.
In a related move, Ethiopia’s financial sector is on the brink of transformation, as a new law aimed at deregulating the financial sector is progressing through parliament. “We expect the new proclamation to be enacted in the next two to three months,” Brook mentioned, noting that major banks from neighboring African countries, as well as North and West Africa, are eyeing entry into Ethiopia’s market. The government hopes that the introduction of foreign banks will bring increased competition and further open up the country’s financial system.
As Ethiopia’s first company to go public, the listing of Ethio Telecom will be a historic moment for the country and its economy, positioning Ethiopia’s stock market as a key player in the region’s financial landscape.
Source: Reuters
