Gov’t Plans to Privatize Telecom Sector within 9 months 

  • Govt to issue two telecom licenses, minority stake in monopoly
  • 13 Sugar factories will go under the hammer

ADDIS ABEBA – Government will complete selling up its stakes of Ethio telecom partially and Sugar factories totally until the third quarter of the 2019/20 fiscal year, the ministry of finance announced on Friday. The FY will start begins on July 8.

Senior officials at the ministry of finance gave a detailed formal announcement of the government’s plans for opening one of the world’s last major closed telecom markets.

State minister of finance Eyob Tekaligh (Ph.D.) said opening up the telecom sector and selling its stakes in Ethio telecom will increase the standard telecom sector as well as the competitiveness. It will also help the government fulfill its aim to create a digital economy.

Accordingly, the government will award two telecom licenses to multinational mobile companies. The government will also offer a minority stake in Ethio Telecom, the monopoly operator, and foreign firms will be invited to bid.

Ministry of Finance announced the market structure as ‘two plus one’. Eyob referred to it as two new licenses and a 49 percent stake in Ethio Telecom, the monopoly operator.

Multinational companies have been eagerly awaiting the government’s announcement on the market structure. “At least 50 companies have so far expressed interest to buy a stake in the monopoly,” Eyob said.

The number is expected to increase once the state starts to float auction. Vodafone, South African operator MTN, France’s Orange and Etisalat of the United Arab Emirates are likely to be among the leading contenders vying for entry into the Ethiopian market.

Apart from the telecom sector, the government plans to sell its stakes in 13 Sugar processing factories. The privatization of the sugar sector is expected to expand business opportunities in areas such as animal feed, animal fattening, pulp, and paper as well as alcohol production, among others, according to the ministry.

Unlike the telecom sector, the ministry is yet to draft a proclamation that will facilitate the privatization process as well as how the sector should be governed.  Locals companies are already expressing interest to buy the factories especially Metahara and Wenji sugar factories.

Ethio Sugar S.C is one of the local companies that expressed interest in the state-owned factories. “Our company has been asking for the acquisition of the two sugar processing factories Wenji and Matahara,” said Arssido Lendebo (Ph.D.), deputy general manager of Ethio-Sugar.

Arssido asked the government to give local factories preferential treatment – a request rejected by the ministry of finance.

Eyob said there will be no preferential treatment for local firms. “Anyone who fits our bill can compete and own the factories,” he said.