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In the weeks following the announcement by Ethiopia of vast privatization projects after decades of state control, foreign businessmen were heading to the United States. Belachew Mekuria's office
"Everyone is here." The new chairman of the Ethiopian Investment Commission (EIC) has said strong competition for entering the telecommunications sector previously out-of-bounds. "[19659002] "Many of them, including the United States" Belachew, an affable lawyer who is the first stop for foreign investors, said with a smile after an evening meeting with an officer of the United States. Kenyan mobile operator Safaricom.
Among the industries facing privatization, the government will also open Ethiopian Airlines, the state logistics company and the monopoly of power over private investment – the Ethiopian monopoly State telecommunications is the price because of its huge protected market.
But the form of liberalization takes and the speed with which it is achieved The Iraqi government, which came to power last April, toppled Ethiopia in a vertiginous drive for transparency
. 19659002] On the diplomatic front, he made peace with neighboring Eritrea and pushes for reconciliation with the exiles.
Abiy aims to loosen the grip of the government on strategic sectors after decades of socialist central planning and authoritarian rule.
The impact of the surge of reform in the second-most populous nation in sub-Saharan Africa could be huge for multinationals, which are currently confined to a handful of sectors.
International telecommunications companies, in particular, are keen to enter one of Africa's few telecommunications sectors – a sector that serves a population of 100 million people. inhabitants – still protected by a state monopoly.
Telecommunications companies want to enter as quickly as possible. Andrew Kitson, head of telecommunications research at BMI Research, told Reuters: "THEY NEED FOREX"
These companies have been watching Ethiopia for years.
Reuters reported this month that Safaricom, whose parent companies are Vodacom in South Africa and Vodafone in Britain, is in advanced negotiations to present its popular mobile money service M-Pesa.
MTN, which operates in 24 countries in Africa and the Middle East, said the Ethiopian market "
the US Orange, whose subsidiary Sofrecom won a two-year contract for the management of the State-owned company Ethio Telecom in 2011, is also interested "
" If the state opens a privatization process or seek a partner for Ethio Telecom, we would be in the race. That's certain, " said a source close to the issue
Viettel, a Vietnamese state-owned company that operates or holds licenses in Mozambique, Burundi, Cameroon, and Tanzania, is considering opportunities in Ethiopia. Other potential contenders include Etisalat and Zain from the Middle East, Kitson said.
A Zain spokesperson was not immediately available Etisalat did not respond to a request for comment.
Although the competition has already started, no one else
The government has not yet chosen consulting firms to give its opinion on the general form of privatization, which will include the evaluation from Ethio Telecom.
The potential scenarios described by government officials include selling a minority stake, opening the sector to competition by granting new licenses to multiple telecom operators or a combination of both.
The first option would address what is perhaps the most immediate challenge of Ethiopia.
"They need new sources of foreign currency now and one of the ways is to open up to foreign investors." I do not think there is a shortage of money. technical expertise in the country, "said a senior telecommunications officer to Reuters.
For ten years, the government has focused its efforts on growth in the sectors of light manufacturing and clothing. State investments in infrastructure, exports have been slow to take off, creating a serious shortage of dollars.
The governor of the central bank refused last week to give Reuters the economists think they spend between one and two months of import coverage.
The sale of a piece of Ethio Telecom, which has more than 60 million mobile subscribers, could provide indispensable foreign exchange, especially if acco rd
This is a model that Ethiopia has used before.
In two transactions in 2016 and 2017, Japan Tobacco International (JTI) purchased more than 70% National Tobacco Enterprise Share Company
Although the company had only about an annual income of about $ 15 million, the government has included a 10-year monopoly, according to a rival bidder. JTI paid close to $ 1 billion for the faceoff.
The interest of investors for Ethio Telecom could however be reduced, once obliged to open its books to bidders.
"We have no idea of the size of this business We only know how many subscribers," says Kitson
The government also clarified that the state will retain a majority stake and control of the board of directors, which could discourage investors. 19659002] BEST, LESS EXPENSIVE [Abye]
Abiy works hard to alleviate the shortage of foreign exchange by encouraging the huge diaspora to send dollars home and to woo the United Arab Emirates and Saudi Arabia to deposits in the central bank.
If the main objective of privatization is to stimulate competition to improve services by stimulating the economy, the government may want to take another turn.
"You can not develop the manufacturing sector without effective telecoms Although this would not generate the same amount of foreign currency, licensing other operators could increase revenues of the government through spectrum license fees and taxes on mobile services and SIM card sales 19659002] With one of the lowest mobile penetration rates in Africa – about 60 phones per 100 inhabitants – there is many opportunities for growth
The government may fear, however, on fears: cow, would struggle to keep up with international competition over prices and service.
One way would be to spread liberalization, beginning with the sale of a minority stake in Ethio Telecom and, once the partnership has matured, open the market to
Despite the enthusiasm aroused by the ethic authorities Iopians and interested companies, few things have been decided.
The government has yet to establish the organs that will oversee its privatizations. on the diet. It must then engage financial advisors and perform an badet valuation prior to auctioning.
It could be two years or more before new investors enter the industry, badysts said.
say the observers. And officials like Minister of Public Enterprises Teshome Toga are quick to play the government's determination to follow through on his announcements.
"Over the past 20 years, we have sold 377 fully or partially privatized companies," Teshome told Reuters. "The only difference now is that we are venturing into big business." (Additional report by Mathieu Rosemain in Paris and Alexander Cornwell in Dubai Edition by Giles Elgood)
(This story was not edited by Devdiscourse staff and is generated automatically from a syndicated feed .)
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