Africa

By AFP | Oct. 17, 2024

 

Ethiopia's government on Wednesday launched a sale of shares in the historic telecoms operator Ethio Telecom, in what it called a "significant milestone" in modernising the country's state-controlled economy.

Addis Ababa last year said it planned to sell 45 per cent of the publicly-owned provider, part of a push to open up the tightly controlled sector in Africa's second most populous country.

"The 130-year-old Ethio Telecom is offering ten per cent of its shares to the public, laying the groundwork for Ethiopia's stock market," Prime Minister Abiy Ahmed wrote on X.

The move will expand "access to ownership in one of the nation's leading state-owned enterprises, which has now evolved into a share company," he added.

Originally launched in June 2021, the partial privatisation process was halted in March 2022 due to economic challenges, before resuming at the end of 2022.

Privatisation is a key component of an economic reform package that Abiy announced after coming to power in 2018.

When he took office, the premier pledged to embark on reforms of Ethiopia's economy, largely closed to foreign investors, but progress has been slow.

Battered in recent years by several armed conflicts, the Covid pandemic and climate shocks, the country has about $28 billion of external debt and is grappling with sky-high inflation at around 20 per cent.

Abiy said in July that the economy had registered "robust" growth over the past six years, with an average GDP growth rate of 7.1 per cent from fiscal year 2019 to 2023.

But more than 21 million people, or about 18 per cent of Ethiopia's population of 120 million, rely on humanitarian aid due to conflict -- including a two-year war in the northern Tigray region that ended in late 2022 -- and climate disasters such as flooding or drought, according to United Nations figures.

Addis Ababa in May 2021 issued a second private mobile telecommunications licence to Kenyan giant Safaricom, bringing Ethio Telecom's monopoly to an end.