Ethio Telecom to Become Ethiopia’s First Publicly Listed Company

:On October 20, 2024, Ethio Telecom will become Ethiopia’s first publicly listed company, selling a 10% stake to boost investment and private sector growth. With 40 million subscribers and a 3.5% contribution to GDP, this landmark listing signals a new era for Ethiopia’s economy

By Charles Wachira

Ethiopia’s long-anticipated journey into the world of public trading is about to begin, with Ethio Telecom poised to become the first company to list on the newly established Ethiopian stock market on October 20, 2024. The government plans to sell a 10% stake in the state-owned telecommunications giant, marking a significant milestone for the nation’s economy. This landmark event is not only a pivotal moment for Ethio Telecom but also a reflection of Ethiopia’s broader economic reform agenda, aimed at attracting investment and fostering private sector growth.

The Historical Context

Founded in 2010, Ethio Telecom has played a crucial role in expanding telecommunications access across Ethiopia. The company has seen significant growth, reporting approximately 40 million subscribers as of 2022, which has positioned it as the largest telecommunications provider in the country. This rapid expansion has been part of Ethiopia’s efforts to modernize its economy and improve access to digital services. According to a report by the World Bank, telecommunications in Ethiopia contribute to about 3.5% of the national GDP, underscoring the importance of this sector in the country’s economic landscape.

The decision to list Ethio Telecom on the stock exchange is a crucial step in Prime Minister Abiy Ahmed’s reform agenda, which seeks to open up the economy and increase foreign direct investment. Since 2018, the Ethiopian government has been pursuing various reforms, including liberalizing key sectors such as telecommunications, banking, and logistics.

A Groundbreaking Move

Brook Taye, the CEO of Ethiopia Investment Holdings, the parent company of Ethio Telecom, spoke to Reuters about the significance of this development. “Listing Ethio Telecom on the stock exchange is a monumental step for Ethiopia’s economic transformation,” Taye stated. “We are not just selling shares; we are inviting the public to be part of this journey and to invest in the future of our telecommunications sector.”

Initially, the government aimed to sell a 40% stake in Ethio Telecom, but the decision was revised to offer 10% in the first phase to gauge market response. The company is expected to raise around $300 million from the sale, which will be utilized for further expansion and technological upgrades.

Expectations and Challenges Ahead

Ethiopia’s stock market, established in 2022, is a significant step toward creating a more diversified and vibrant financial system. The move is expected to enhance transparency and corporate governance within the public sector, drawing in both local and international investors. The government hopes that this will set a precedent for other state-owned enterprises to follow suit in the near future.

However, challenges remain. The Ethiopian economy has faced several obstacles, including inflation and political instability, which could impact investor confidence. Furthermore, the telecommunications sector in Ethiopia has faced scrutiny due to its previously monopolistic structure, and it remains to be seen how the introduction of a public listing will affect competition and service delivery.

Looking Ahead

The listing of Ethio Telecom is a highly anticipated event, expected to attract considerable attention from investors eager to participate in Ethiopia’s burgeoning market. “We are excited about this opportunity and are confident that our investors will see the potential for growth and profitability in Ethio Telecom,” Taye added.

The implications of this listing extend beyond Ethio Telecom itself. It signals a potential shift in Ethiopia’s economic landscape, encouraging other companies to consider public listings as a means of raising capital and enhancing accountability. As the country continues to evolve, the success of this venture could lay the groundwork for a more robust private sector, ultimately leading to greater economic resilience and development.

In conclusion, Ethio Telecom’s historic listing is a beacon of hope for Ethiopia’s economic future. It is a testament to the power of reform, the potential for growth in the telecommunications sector, and the importance of inviting public participation in the nation’s economic development. As this new chapter unfolds, all eyes will be on Ethio Telecom, marking the dawn of a new era in Ethiopian finance and investment.

Keywords:Ethio Telecom:Ethiopia stock market:public listing:government stake sale

private sector investment