June 15, 2021

In Ethiopia, the liberalization of the telecommunications sector in slow motion

It could be a new hitch in the opening of the Ethiopian telecommunications market, once presented as “the deal of the century”, but the process is now slowing down. On May 24, the United States announced that it wanted to impose sanctions against Ethiopia for its management of the crisis in Tigray, the northern province of the country, the scene of a war since early November 2020. This decision is likely to put in place. The financial package of the consortium led by the Kenyan Safaricom, to which Addis Ababa has just awarded a new mobile telephony license, is at risk.

Read also “The conflict in Tigray questions the hopes aroused by Ethiopia, for a time presented as a possible model”

This consortium, also comprising the British companies Vodafone and Vodacom, planned to contract a loan of 500 million dollars (410 million euros) from the International Development Finance Corporation, the American development bank, to carry out its project. . Funding now questionable.

In recent weeks, nothing has gone as planned. On April 26, in the Ethiopian capital, Addis Ababa, the opening ceremony of the awarding of telecommunications licenses was being prepared in front of the cameras. While twelve foreign competitors had been in the race for months, only two consortia finally submitted their offer on D-Day. « A frankly embarrassing moment ”, blows a diplomat who followed the whole process.

Unchallenged reign of the public operator Ethio Telecom

The liberalization of the telecommunications sector is, however, one of the major chapters of the Homegrown Economic Reform Agenda, Prime Minister Abiy Ahmed’s ambitious reform program aimed at transforming Ethiopia from an agrarian society to an industrial economy. « A jackpot for foreign investors ”, according to Alexander Demissie, economist in the China Africa Advisory Group, because Ethiopia is the « last big country in the world to open up its telecommunications sector to competition ”.

Ethiopia is the second most populous country in Africa with a population of 112 million, about half of whom are mobile service users

This gold mine has so far been the preserve of the public operator Ethio Telecom, which reigns supreme in an extraordinary market. Ethiopia is the second most populous country in Africa (behind Nigeria) with a population of 112 million, about half of whom are mobile service users. To modernize, Ethio Telecom is slowly opening up to competition. First by the attribution of two licenses to foreign operators, then by the sale of 45% of its shares.

You have 62.39% of this article to read. The rest is for subscribers only.