Updated on: November 28, 2024 2:19 am GMT
Ethiopia is set to take a significant step in economic reform by offering a 10% stake in Ethio Telecom, the country’s largest telecommunications provider. Starting October 16, the public can purchase shares through the government’s mobile money platform, telebirr. This move marks a crucial effort to engage both local and foreign investors in the growing Ethiopian economy.
The Push for Investment
This Initial Public Offering (IPO) is not just about selling shares; it represents Ethiopia’s commitment to modernizing its economy. According to Brook Taye, CEO of Ethiopian Investment Holdings, “This initial public offering will help us to learn and strategize.” This signals a broader intention to facilitate more listings of state-owned enterprises on the Ethiopian Securities Exchange, which is scheduled to begin operations next month.
Key Details on Ethio Telecom’s IPO
- Stake Offered: 10% of Ethio Telecom
- Sales Start Date: October 16
- Purchase Method: Via telebirr mobile money platform
- Government Ownership: 45% stake retained by the government
- Foreign Investment Opportunity: The remaining shares will be available to foreign investors
Ethio Telecom currently boasts 78.3 million subscribers and reported a profit of 21.8 billion birr (approximately $184 million) in the year ending July 7. These figures underline the company’s significant role in Ethiopia’s economy.
A Step Towards Market Expansion
Ethiopia is adopting this IPO as a learning experience amid wider economic reforms. By engaging with the public and foreign investors, the government hopes to gather insights that will aid in the future listing of other state-owned companies.
The establishment of the Ethiopian Securities Exchange is intended to enhance transparency and investment opportunities in the country. It is part of a strategy to shift from a predominantly state-controlled economy to one that encourages private sector participation.
Looking Ahead: More Opportunities
The IPO of Ethio Telecom is only the beginning. Several other state-owned enterprises are also scheduled to list on the newly formed exchange. This upcoming wave of listings could create a vibrant investment landscape in Ethiopia.
With a growing middle class and increasing digital penetration, Ethiopia presents a unique opportunity for international investors. The government appears committed to creating a favorable environment for investment, making this an exciting period for the Ethiopian economy.
Conclusion
The decision to sell a 10% share in Ethio Telecom represents a significant turning point for Ethiopia, signaling the country’s willingness to embrace investment opportunities. By focusing on future listings and actively involving both local and international investors, Ethiopia is set on a path to reshape its economic future. This initiative has the potential to stimulate economic growth, generate employment, and strengthen the nation’s prosperity for years to come. As the date for the IPO draws nearer, the spotlight will be on Ethio Telecom to witness the developments of this landmark offering.
