TLDR
- Ethio Telecom to be the first company to list on Ethiopia’s new stock market, selling a 10% stake as part of privatization efforts led by Prime Minister Abiy Ahmed.
- Launch of the stock market marks a shift from over-the-counter trading to a more formalized market structure, with government planning to divest an additional 45% of Ethio Telecom in the future.
- Safaricom, a consortium led by Kenya’s telecom giant, now challenges Ethio Telecom’s dominance in Ethiopia’s telecom sector serving a population of approximately 120 million.
Ethio Telecom will be the first company to list on Ethiopia’s newly established stock market next week as the government plans to sell a 10% stake, according to Brook Taye, CEO of Ethiopia Investment Holdings. This move marks a significant step in Prime Minister Abiy Ahmed’s broader effort to privatize state-owned enterprises and open the country to private investment.
Currently, Ethiopia has only conducted over-the-counter trading, but the launch of the bourse signals a shift toward a more formalized stock market. The government intends to divest an additional 45% of Ethio Telecom in the future, with the 10% sale providing a baseline for valuation.
Ethiopia’s telecom sector, serving a population of about 120 million, was long dominated by Ethio Telecom until Safaricom, a consortium led by Kenya’s telecom giant, won the country’s first private telecom license in 2022.
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Key Takeaways
Ethio Telecom’s listing marks a significant milestone in Ethiopia’s economic liberalization efforts, with the government opening the telecoms and financial sectors to greater private and international investment. The government is also considering relaunching the tender process for a second private telecom license, viewing the market as capable of supporting three operators. A new financial sector deregulation law is moving through parliament, which could lead to the entry of international banks, potentially transforming the country’s banking landscape.
