Gov’t puts Tele’s partial privatization on hold

Government halts the partial privatization of Ethio telecom for an unspecified time.
The postponement comes in the wake of recent developments and fast moving micro economic changes both globally and from country’s perspective as analyzed by the statements of the Ministry of Finance and Public Enterprises Holding Administration Agency.
“The government of Ethiopia believes that taking time to accommodate the improved macroeconomic situations as well as continually improving financial performance of Ethio telecom will result in better value for all the parties involved and in particular the citizens of Ethiopia,” reads the statement.
It is to be recalled that as part of the home grown economic reform programs the government had laid out a frame work for the privatization of public enterprises under the public enterprise proclamation no 1206/2020 in order to broaden the role of the private sector in Ethiopia’s economy. In line with the program, the government proposed a partial privatization of Ethio telecom by selling 40 percent of the equity share capital of the company and to that regard September 14, 2021 saw the Ministry of Finance (MoF) requesting eligible bidders to submit their proposal.
The Ministry of Finance which is responsible for the follow up process alongside the Public Enterprises Holding Administration Agency then issued the expression of interest on mid-June last year which closed after a month. The process was then met by the issuance of a request for proposal on September inviting interested parties who can add value to the company by bringing in best practices in terms of operations, infrastructure management, and next-generation technological capabilities.
“The government of Ethiopia remains committed to finalize the privatization process and looks forward to re-engaged in due courses with existing and additional parties that have expressed interest in the privatization,” noted the finance ministry and the administration agency.
As part of breaking up its monopoly hold over the sector, Ethiopia last year also issued a tender to award two licenses to private telecommunication operators.
In late last May, one license was awarded to a consortium led by Kenya’s Safaricom, which offered $850 million and promised to invest $8.5 billion over 10 years.
In related news, on December, Ethiopian Communications Authority (ECA) also announced that the process of selecting the second telecom operator had been postponed. ECA stated that the bidding process has temporarily been relinquished as per the request of bidders.