Ethiopia government said today that it will postpone the current privatization of state-owned Ethio Telecom and did not provide a timeline for when the process will resume.
The Ethiopian Federal Government has decided to postpone the privatization of Ethio Telecom due to “recent developments” and by “fast-moving macroeconomic changes both globally and from a country perspective,” according to an announcement posted on Twitter by the Ethiopian Ministry of Finance official account.
“The government of Ethiopia thinks that taking time to adjust to the improved macroeconomic circumstances and continuously improving Ethio Telecom financial performance will result in higher value for all parties involved, particularly Ethiopian citizens,” the release states.
The Ethiopian government issued a request for proposal (RFP) in September 2021 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” for the partial privatization of Ethio Telecom.
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The government of the Horn of Africa country has been planning to sell a 40% part in the country’s lone telco since June of last year. According to sources, the government intends to keep a 55 percent interest in the operator while selling the remaining 5% to local investors in an initial public offering.
What to know About Ethio Telecom
The Ethiopian government’s plans to liberalize the country’s monopoly in the telecom industry included the proposed sale of a major minority interest in Ethio Telecom. Two foreign airlines were granted licenses to operate in the enormous, nearly unexplored market as part of the strategy. Safaricom was one of the carriers chosen by Ethiopia, and it is presently preparing to launch in the country.
“The authorities motive for selling a part of Ethio Telecom to private operators is that the government wants state-owned firms to be competitive and productive,” Zinabu Yirga, Deputy Director of Public Enterprises, Holding and Administration Agency, said at the time.
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The “recent developments” and “fast-moving macroeconomic changes both globally and from a country perspective” mentioned in the announcement could refer to both the ongoing Russo-Ukrainian conflict in Europe, which has had numerous knock-on effects in the tech world and elsewhere and the ongoing conflict in Ethiopia Tigray region, which has killed half a million people.
“The Ethiopian government remains dedicated to completing the privatization process and looks forward to re-engaging with existing and new companies that have expressed interest in the RFP in due course,” the release ends.