Ethio Telecom 40% sale back on as part of Ethiopia’s peace dividend

Ethio Telecom 40% sale back on as part of Ethiopia’s peace dividend

Ahmed Shide Ethiopia.jpg

The government of Ethiopia has revived its plans to sell a 40% stake in its state-owned operator, Ethio Telecom.

The move comes at the same time as the country’s telecoms regulator announced plans to consult over an extra competitor to Ethio Telecom and its private-sector rival, Safaricom.

Minister of finance Ahmed Shide (pictured) said that the government is now ready to engage with prospective bidders to sell 40% of Ethio Telecom’s shares.

The ministry said companies had until 20 December to submit expressions of interest.

This sale has long been planned, with Orange regularly tipped as the likeliest buyer, but the government halted the process in March 2022, citing “recent developments and fast-moving macroeconomic changes”.

That is largely considered to be a reference to the civil war being waged between the government of Ethiopia in Addis Ababa, led by prime minister Abiy Ahmed, and the Tigray People’s Liberation Front. The two sides signed a truce two weeks ago and are now in discussions about a long-term peace.

The minister of finance said he had taken the decision to resume the 40% sale of Ethio Telecom “after a careful consideration of the market conditions and [considering] a very stable outlook of the country”.

Ahmed said Deloitte Consulting is advising the government on the sale. Deloitte originally won the deal to manage the sale in July 2020.

At the time Deloitte had 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. That 14-month period will, of course, now have expired.

The 2020 deal said Deloitte also had 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.

Eyob Tekalign, state minister of finance, said the partial privatisation of Ethio Telecom and initiation of the stakeholder consultation process for the third telecommunication operating license are part of the government’s telecom sector transformation plan.