MTN: 9,389 0 (0.00%)
Ethiopian telecoms sector requires 'huge' investments -minister
(In paragraph 4, corrects to show these were the aims of the
government and in paragraph 5 adds sourcing)
* Public investment has run out of steam-minister
* Attracting foreign investment is key
* Telecoms industry is a priority
By Maggie Fick
ADDIS ABABA, June 12 (Reuters) - Ethiopia could require as
much as $2.2 billion to modernise its creaking, overburdened
telecoms sector, a senior government official told Reuters on
"The need for (telecoms) infrastructure investment is huge,"
State Minister of Finance Eyob Tekalign Tolina said in an
interview. "We have said clearly that public investment has run
out of steam. We are not going to do unsustainable public
His comments mark a radical departure from the policies of
late Prime Minister Meles Zenawi, who insisted that the public,
not the private sector, must control the economy.
Decades of heavy, public investment aimed to set Ethiopia up
as a regional economic powerhouse.
But revenues from Ethiopia's fledgling manufacturing
industry and state-controlled sectors like power and sugar have
not grown as expected, necessitating reforms by Prime Minister
Abiy Ahmed to rebalance the economy, Eyob and new technocrats
appointed by Abiy argue.
Abiy's reforms aim to encourage competition and foreign
investment, and Eyob said the telecoms sector - long dominated
by state monopoly Ethio Telecom - must be the priority.
"Telecoms really affects all sectors. It's absolutely
critical. When you want to unlock potential that was locked, one
key enabler is that sector. So naturally we have to focus on
telecoms," he said.
Reuters reported on Wednesday that the government is aiming
to award telecom licences to multinational mobile companies by
December in hopes they will be up and running next year.
Efforts to create an environment conducive to private
investment are underway.
Parliament is due on Thursday to debate a law creating a new
telecoms regulator that could issue licences to multinationals.
"We need to establish a competent, independent regulatory
body ... That independent authority must ensure a level playing
field," the minister said.
The government has worked to make Ethio Telecom more
attractive because there are also plans potentially to sell off
a minority stake in the company.
Like most Ethiopian state-owned enterprises, Ethio Telecom
is struggling with debt. But Eyob said that over the past nine
months the authorities had cleared three years of arrears.
"Our vision is to see Ethio Telecom to start taking loans
without necessarily requiring the government sovereign guarantee
... (bringing) Ethio Telecoms to the level of Ethiopian Airlines
in terms of the credit rating," he said, referring to the
state-run carrier, which has become a major African success
(Writing by Joe Bavier. Editing by Jane Merriman)
First Published: 2019-06-12 18:28:03
Updated 2019-06-12 19:57:58
© 2019 Thomson Reuters. All rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. "Reuters" and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.