The Ethiopian government has signaled a slowdown in its plans to privatize a significant portion of Ethio Telecom, the state-owned telecommunications operator. Initially, Ethiopia had been pursuing an ambitious economic reform agenda aimed at liberalizing its telecom sector, including issuing new licenses to foreign operators and partially privatizing Ethio Telecom to attract foreign investment, boost competition, and modernize the industry.
However, recent developments suggest a cooling of enthusiasm for the sale. Government officials have indicated that current market conditions and broader economic uncertainties have made it less favorable to move forward with privatization at the anticipated pace. Ethiopia has been grappling with macroeconomic challenges, including foreign currency shortages, inflation, and political instability in certain regions, all of which could dampen investor appetite or reduce the potential valuation of the company.
Ethio Telecom has recently reported improved performance, with subscriber growth and revenue increases following network expansions and new service offerings, including mobile money. These improvements may have contributed to the government’s decision to delay or reconsider the scale and timing of the sale, as retaining more control could allow the state to benefit from future growth.
Foreign interest in Ethiopia’s telecom sector remains significant, with companies like Safaricom already entering the market under a new license. Nonetheless, investors are cautious due to regulatory risks and ongoing economic reforms.
The government has reiterated its long-term commitment to liberalizing the telecom sector but is now taking a more measured approach. The delay could provide more time to stabilize the economy and ensure that any sale maximizes national benefit and attracts strong investor participation under more favorable conditions.
Leave a Reply