Latest news with #EthioTelecom
Zawya
6 days ago
- Business
- Zawya
Ethiopia: Can securities exchange breathe new life in parastatals?
Ethiopia has finally lost its status as the most populous country in the world not to have a stock exchange. After years of prepa- ration, the Ethiopian Securities Exchange (ESX) was finally launched on 10 January 2025, but this is only the begin- ning of the story as just a single company was listed. Initial public offerings (IPOs) in many state-owned companies are expected, but Ethiopian Investment Holdings (EIH) hopes to improve the commercial perfor- mance of less efficient ones before seeking to sell stakes in them. (See page 20.) Investment of $11m was needed to launch the bourse and by April 2024, the ESX announced that the issue had been oversubscribed, with $26.6m offered by domestic and foreign investors. State- owned EIH and its offshoots Ethio Telecom and Commercial Bank of Ethiopia now hold 25% equity, with the remaining 75% held by private sector investors, including 16 of the country's commercial banks, 12 insurance firms and three foreign inves- tors – FSD Africa, Trade and Development Bank and the Nigeria Exchange Group. It was originally hoped that the ESX would begin operating in October but the launch was eventually pushed back to January. Wegagen Bank was the only company to list at launch but ESX chief executive Tilahun Kassahun expects 90 compa- nies to join within 10 years. Previously privately-owned, Wegagen is a mid-sized bank but one that has grown strongly in recent years. In the fiscal year 2023-24, it recorded a 40% increase in revenue to 9.8bn birr ($75.9m). The country's original stock exchange was closed down during the 1974 revolu- tion but creating a new bourse was one of the main planks of the current govern- ment's economic reforms. Ethiopian Prime Minister Abiy Ahmed described the move as a 'major step toward modernising the country's financial sector'. Brokers and dealers are now able to apply for licences. The delay in launching the ESX may have been because the sale of a 10% stake in Ethio Telecom was scheduled to close on 3 January, which would have enabled it to join the exchange. The Ethio Telecom shares are being sold exclusively to Ethiopian citizens via the company's TeleBirr mobile money platform. However, the opening of the ESX came and went without any mention of the domestic telecoms giant, apparently because it had failed to secure sufficient interest in its 10% stake by that date, with the deadline extended until at least 14 February. In addition to the delayed listing, the government failed to attract a foreign investor for a 45% stake in Ethio Telecom last year, with potential suitors perhaps deterred because the deal would still have left the government with a controlling share. However, once the 10% IPO com- pletes, buying a 45% stake may seem more attractive to foreign operators because it would end the government's majority stake. Ethio Telecom is one of the coun- try's more profitable parastatals, record- ing a profit of 21.8bn birr ($184m) for the year to July 2024. In a statement, the ESX said that it would be 'a key component of Ethiopia's financial sector reform, aimed at foster- ing economic growth and development by enabling companies to raise capital and offering investment opportunities to the public'. The government hopes that the ESX will support privatisation plans and rebal- ance the economy more in favour of the private sector. Yet while Ethio Telecom is expected to join Wegagen Bank sooner or later, it must be joined by many more other companies before the new exchange is considered a success. Which companies will be listed? The big question is how many of the 27 state-owned companies that have been under the stewardship of EIH since De- cember 2021 will actually be listed. As the new EIH chief executive Brook Taye explains on page 20, his company is fo- cusing on reforming state-owned enter- prises in the short term to make more of them commercially viable. However, this is likely aimed at preparing many of them for listing, as the EIH has been tasked with attracting foreign investment. Officials have said that some companies will be wholly privatised, while minority stakes will be sold in others. Ethiopian Airlines is the jewel in the crown and would undoubtedly attract huge investor interest but it is already profitable and a national success story, so the government may decide to keep it entirely under state ownership. Even if it is partly privatised, the government will be keen to time the sale to secure the best price. Ethiopian Insurance Corporation, Ethi- opian Shipping and Logistics Services Enterprise and Berhanena Selam Printing were named as founding members of the exchange at its launch. Although they are not yet listed, they are expected to be among the first state-owned companies to seek a listing. Stakes could also be sold in loss-mak- ing companies in the power, transport and food sectors to help put them on a more commercial footing but they are likely to be of less interest to potential investors. The government sees many of them as providing a public service rather than solely as commercial enterprises, and may be reluctant to turn them over to the private sector. Their profitability is unknown but it seems likely that many are currently generating losses rather than profits, particularly while having to operate in subsidised sectors. Economic context The launch of the ESX has followed the pattern of general government economic policy since Prime Minister Abiy Ahmed came to power in 2018. There has been a gradual process of economic liberalisa- tion, including in the telecoms and finan- cial services sectors, with Kenya's Safa- ricom winning the country's first private telecoms licence in 2021. Yet the pace of change has been slow and subject to huge shocks, including the Covid-19 pandemic, the 2020-22 war in Tigray and armed conflict elsewhere in the country. These factors contributed towards a sovereign debt crisis that culminated in the suspension of debt repayments to China in August 2023 and then default on Ethiopia's $1bn Eurobond after it missed a $33m payment. However, Addis Ababa reached an agreement with the IMF to implement further economic reforms, including allowing the birr to float in July 2024, in return for $3.4bn of IMF financ- ing that allowed the country to begin re- structuring its debt. The four-year IMF programme will also require reforms in monetary policy, the management of state-owned en- terprises, tax structures and financial services' regulations. The sale of stakes in parastatals would further help Ad- dis Ababa strengthen its finances but it must time any IPOs carefully in order to secure the most revenue. Waiting until its economic position improves and putting more distance between the debt crisis and any sales could help increase valuations. Ethiopia's position as one of the world's fastest-growing economies, with average annual economic growth of almost 10% between 2004 and 2020, should make it an attractive investment destination. At the same time, its population of 130m is set to increase to 225m by 2050, providing a huge market for potential investors. Yet a change in corporate culture and regula- tory requirements would greatly help to attract investment and interest in the ESX, as some Ethiopian companies currently fail to offer the financial transparency common in other markets. It will be interesting to see how many other companies are listed over the course of this year but privatising state owned companies, even in part, is not a panacea for economic improvement. The govern- ment needs to instil more confidence in investors if it is to attract sufficient inter- est in Ethiopian companies. It is therefore understandable that the EIH is reluctant to sell off assets too quickly because a rushed process could undervalue them. Yet a stock exchange with a single component, or even just a handful of companies, will hardly be a ringing en- dorsement of Ethiopia's attractiveness as an investment destination. n The big question is which of the 27 state-owned companies under EIH's stewardship will be listed. EIH is likely preparing many for the process. © Copyright IC Publications 2022 Provided by SyndiGate Media Inc. (
TimesLIVE
28-04-2025
- Business
- TimesLIVE
Ethio Telecoms sells just 10.7% of shares in IPO
Ethiopia's state-owned Ethio Telecom sold only 10.7% of the shares in its initial public offering in which the government sought to trim its equity in the firm. The IPO is part of the government of Prime Minister Abiy Ahmed's broader plan to expand private investment in the Horn of Africa economy. During the IPO, which commenced on October 16 and closed on February 14, Ethio Telecom sold 10.7-million shares out of 100-million on offer, CEO Frehiwot Tamiru said at a press conference in the capital Addis Ababa. The sale generated 3.2-billion Ethiopian Birr (R448.19m) from 47,377 investors who took part in the IPO. Frehiwot said the relatively low uptake was partly because the company restricted the sale to only Ethiopian citizens. Ethiopians who had acquired foreign citizenship were not allowed to participate. "It is because of those restrictions we put on," Frehiwot said, explaining the low uptake. She added some investors were also put off by the 1-million Birr (R140,000) limit of shares that any individual investor could buy.
Mint
27-04-2025
- Business
- Mint
Ethiopia Sells 10% in Its Maiden IPO That Was Open for 121 Days
(Bloomberg) -- Ethiopia raised 3.2 billion birr ($24 million) after selling 10% of the shares on offer in its maiden initial public offering that was open for more than four months. The nation sold 10.7 million shares in state-run Ethio Telecom for 300 birr each, the company said in a statement Friday. Ethiopia Investment Holdings, which controls 40 state-run companies including the telecom firm, planned to sell 100 million shares in a bid to raise 30 billion birr from the sale. The offer failed to raise the targeted amount because the Ethiopian diaspora and institutional investors weren't allowed to bid in the IPO, according to Ethio Telecom Chief Executive Officer Frehiwot Tamru. Still, the sale paves the way for the operationalization of the Ethiopian Securities Exchange, a key step that Prime Minister Abiy Ahmed's government has taken to open up the economy. The nation last year ended half a century of control of its currency and is easing rules of doing business to lure investment 'Regarding shares that are not subscribed, we will notify when we will be doing a second round IPO,'Tamru said. Ethio Telecom had about 81 million users by January and reported revenue of 61.9 billion birr in the six months through Jan. 7. The nation had a stock market for 14 years until 1974, when the military overthrew Emperor Haile Selassie and banned share trading. The new bourse is targeting to list as many as 50 companies over five years, some through the so-called listing by introduction — which does not involve an IPO. --With assistance from Monique Vanek. More stories like this are available on First Published: 27 Apr 2025, 04:32 PM IST
Time of India
26-04-2025
- Business
- Time of India
Ethio Telecoms sells just 10.7% of shares in IPO
By Dawit Endeshaw ADDIS ABABA: Ethiopia's state-owned Ethio Telecom sold only 10.7% of the shares in its initial public offering in which the government sought to trim its equity in the firm. The IPO is part of the government of Prime Minister Abiy Ahmed's broader plan to expand private investment in the Horn of Africa economy. During the IPO, which commenced on October 16 and closed on February 14, Ethio Telecom sold 10.7 million shares out of 100 million on offer, Chief Executive Officer Frehiwot Tamiru said at a press conference in the capital Addis Ababa. The sale generated 3.2 billion Ethiopian Birr ($24.50 million) from 47,377 investors who took part in the IPO. Frehiwot said the relatively low uptake was partly because the company restricted the sale to only Ethiopian citizens. Ethiopians who had acquired foreign citizenship were not allowed to participate. "It is because of those restrictions we put on," Frehiwot said, explaining the low uptake. She added some investors were also put off by the 1 million Birr limit of shares that any individual investor could buy.
Yahoo
31-03-2025
- Automotive
- Yahoo
Small nation launches new technology that will revolutionize the automobile industry: 'How cool is that?'
Kigali, Rwanda, recently received its first ultra-fast EV charging hub, which has nearly one-third greater power capacity than existing local stations. As CleanTechnica reported, the electric mobility company Kabisa launched the new facility with six charging bays for private EVs and commercial fleets of vans, buses, and trucks. Meanwhile, Ethiopia's EV charging infrastructure recently also got a significant boost. Ethio Telecom, an Ethiopian telecom provider, launched a new ultra-fast charging station on both sides of a road in Addis Ababa. This state-of-the-art hub can charge up to 32 EVs, with eight chargers delivering up to 600 kilowatts each and 12 chargers delivering up to 500 kW each. The addition in Ethiopia also stands out for its smart pole chargers integrated into the city's infrastructure for emergency charging along various routes. These two new additions contribute to the growing EV landscape in East Africa. The high-tech EV charging hubs integrate some of the most promising technology, such as 24/7 operation, AI optimization, easy pay options, and real-time tracking for efficient monitoring. Ethiopia was the first country worldwide to ban internal combustion engine vehicle imports. Therefore, tens of thousands of EVs have been coming into the region lately. Adding new, high-powered charging stations is breaking down barriers and leading to greater EV adoption in East Africa and globally. Meanwhile, improved battery technology is helping EVs last much longer between charges. EV range anxiety is a genuine concern among drivers, regardless of where they live. Therefore, providers like Ethio Telecom are entering the EV charging business to support the country's growing number of electric vehicles. If you were going to purchase an EV, which of these factors would be most important to you? Cost Battery range Power and speed The way it looks Click your choice to see results and speak your mind. CleanTechnica commented on Ethiopia's recent EV progress: "The Ministry of Transport and Logistics recently said that this target of over 100,000 electric vehicles has already been met in just the first two years of this plan! How cool is that?" The recent examples in Rwanda and Ethiopia are inspiring because they show the high potential of modern charging hubs. They also demonstrate how nations can move away from gas-guzzling vehicles that release toxic fumes to embrace cleaner, greener car ownership. "A great example of how a small country can leap ahead of big nations," one CleanTechnica reader commented on the news. Someone else wrote, "If Africa jumps immediately to renewables and EVs they'll probably catch up a lot quickly to Western countries in quality of life of their populations without all the pollution drawbacks." Join our free newsletter for good news and useful tips, and don't miss this cool list of easy ways to help yourself while helping the planet.
