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In anticipation of the launch of its security exchange, the Ethiopian government has been selling shares to citizens for the first time in the state-owned Ethio Telecom.
The shares are being offered through TeleBirr, the telecom’s mobile money platform with approximately 50 million subscribers awaiting the opening of a new securities exchange. Ethio Telecom is trying to sell 10% stake in the company which it values at around $2.5 billion. It comes after the government failed in a previous attempt to privatize the company in 2022 after lukewarm interest from international bidders.
With more than 78 million customers, the company commands a large majority share of the local market in Ethiopia. Its main rival, Safaricom, entered the market in 2022 but it has been an uphill battle to gain market share for the Kenyan company given the incumbent’s dominance.
The Ethiopian Securities Exchange is a $1 billion public private partnership spearheaded by the Ethiopian government which was originally scheduled to launch in mid-2024. It will be the country’s primary securities exchange. Ethiopia hasn’t had a stock exchange since the nationalization of financial institutions and major companies in 1974. A quarter of the seed capital, $250 million, was provided by Ethiopian Investment Holdings (EIH), the country’s sovereign wealth fund. Four state-owned enterprises, including Ethio Telecom and Ethiopian Insurance Corporation, signed a founding agreement a year ago and will contribute portions of the 25% under the EIH umbrella.
— Samuel Getachew in Addis Ababa
