The Ministry of Finance of Ethiopia said it has decided to postpone it plan of partial privatization of the state-owned Ethio Telecom.
In its statement the Ministry indicated that “…given the recent developments and fast-moving macroeconomic changes both globally and a country perspective, the Government of Ethiopia has chosen to postpone the privatization process”.
“The Government of Ethiopia believes that taking time to accommodate the improved macroeconomic situation as well as continuing improving financial performance of Ethio Telecom will result in better value for all the parties involved and in particular the citizenry of Ethiopia,” it said.
“The Government of Ethiopia will remain committed to finalizing the privatization process and looks forward to re-engaging in due course with existing and additional parties that have expressed interest in the request for proposal (RFP),” the Ministry said.
It is recalled that the Government of Ethiopia has invited international telecom companies to express their interest to acquire 40 percent of Ethio Telecom with the aim of “brining in best practices in terms of operations, infrastructure management, and next generation technological capabilities”.
In its statement the Ministry has indicated that it has discussed with several companies, which have shown interest to venture in Ethio Telecom, which during the first six months of the current year started July 1, 2021, has generated 28 billion Birr (over half a billion US dollar) revenue.
Ethio Telecom, which often described as ‘cash cow’ by government officials, has been the only telecom operator in Ethiopia since its establishment over a century ago. Meanwhile a few years ago, the Government has announced its plan to partiality privatize state-owned enterprises including Ethiopian Airlines and Ethio Telecom, among others with the aim of solving its hard currency shortage and IMPROVING efficiencies.
In addition to privatization, the Government has also decided to liberalize the telecom market for two more additional players, which will compete with Ethio Telcom. As a result, a consortium led by Safaricom of Kenya has purchased license for $850 million and is currently preparing to launch its operations.