Deloitte wins deal to manage Ethio Telecom privatisation
Deloitte has won the contract to oversee the partial privatisation of Ethio Telecom, against competition from EY, PwC and Roland Berger.
African news agency Ecofin says the consultancy and auditor will look after the sale of 40% of the state-owned company and the flotation of 5%, while the government keeps a controlling 55%.
The Ministry of Finance in Addis Ababa made the choice of Deloitte, according to an Ethiopian newspaper report, picked up by Ecofin. KPMG was disqualified from the process because it was already working with Ethio Telecom.
According to the report, Deloitte will have a 14-month contract from the ministry during which it has to verify the financial situation of Ethio Telecom, as well as potential disputes, taxes and contracts.
Deloitte also has to recommend a feasible mode of privatisation of the telecom operator and to help prepare the tender documents, review the initial valuation of assets and identify criteria for selecting bidders.
The part-privatisation of Ethio Telecom is just one element of the liberalisation of the industry in Ethiopia, which will also see the introduction of competitors.
According to a Capacity report in June, the government of Ethiopia has already received 12 expressions of interest from nine telecom and two non-telecom operators looking to secure a share in the country’s industry.
The Ethiopian Communications Authority (ECA) said that bids have been received from nine telecom operators: Etisalat, Axian, MTN, Orange, Saudi Telecom Company, Telkom South Africa, Liquid Telecom, Snail Mobile; and the Global Partnership for Ethiopia, a consortium of Vodafone, Vodacom and Safaricom.
In a recent report on Ethiopia, Deloitte said the country has become one of the world’s fastest growing economies. Over the 2008-18 period, Ethiopia recorded an average real GDP growth rate of 9.9%.
The report noted that Prime Minister Abiy Ahmed has announced numerous reform plans, including plans to loosen the state’s dominance in key sectors, in efforts to attract investor interest and boost growth.
Ethiopia is expected to become an industrial-based economy. It is Africa’s second most populous country, with a population of 107 million people.
It is also the second largest recipient in Africa of foreign direct investment.