Ethiopia is open for business and Safaricom wants a piece of that market. Interim CEO Michael Joseph said that Safaricom is interested in buying a stake in the telecommunications giant monopoly, Ethio Telecom, as it gears towards establishing its presence in Ethiopia.
Ethio Telecom is among companies that are set to be privatized on the backdrop of revolutionary reforms by 2019 Nobel Prize Laureate Prime Minister Abiy Ahmed. The company is the world’s largest monopoly and offers lucrative options for Safaricom which is also considering setting shop in the populous country on its own.
“We are looking at all options,” Mr Joseph told the Business Daily in an interview.
Ethiopia is officially looking for an advisor on the sale of a stake of its telecom operator to foreign investors. The operator currently has 44 million subscribers out of a population of 100 million. It generated revenue worth KES 124.5 billion (USD 1.2 billion) in 2018. Safaricom generated revenues worth KES 250.9 billion.
The Kenyan telco had already initiated talks with the Ethiopian government in 2018 about introducing MPESA in the closely guarded market. A penetration of mobile money in Ethiopia is most likely to revolutionise banking with its impact being felt across all sectors. Ethiopia has one of the highest economic growth rates in the world maintaining an average of 10 percent in the last five years.
While Safaricom has the financial muscle to buy the stake in the Ethiopian telco, the Ethiopian government will only sell up to 49 percent. That means the partner can only acquire a minority stake. The minister in charge of economic liberalisation in Ethiopia Eyob Tolina was quoted by the Financial Times saying that advisors will help the government structure the process, determine minimum value and select the right partner.
Several leading telecoms including Airtel, MTN, Vodafone, Etisalat, Orange, and Zain are all looking forward to bid. Vodafone is a shareholder in Safaricom.
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