Africa’s 2nd most populous country, with over 110 million citizens, has issued out a new telecommunication license to a consortium of telecom companies led by East Africa’s giant Safaricom, and Japan’s Sumitomo. The landmark deal represents the single largest Foreign Direct Investment into the country and is expected to create 1.5 million new jobs while injecting $8.5 billion into the economy over the next 10 years (inclusive of the license fee).
It has now been established that the government received two offers. The Safaricom-led consortium submitted an $850 million offer while the MTN Group Ltd that included Silk Road Fund (Chinese investment group) offered $600 million. The decision to opt for the Global Partnership on Ethiopia was unanimous from the council of ministers who were impressed by its solid investment case.
Ethiopia President Abiy Ahmed shared the news on a Twitter post, affirming his administration’s desire to take the country fully digital. He went further to describe the process as “very transparent and effective. As part of the agreement, the company will roll out 4G internet across the country by 2023. Among the conditions required for the auction were the phone companies to use state-owned telecom towers and an initial block on the issuance of mobile money licenses.
Bloomberg reports that Abiy’s government called off the sale on a second permit to instead make a shift towards international wireless carriers after a few policy changes. This was revealed by Brook Taye, a senior adviser at the Finance Ministry.
The Council of Ministers has unanimously made a historic decision today allowing Ethiopian Communications Authority to grant a new nationwide telecom license to the Global Partnership for Ethiopia which offered the highest licensing fee and a very solid investment case. 1/2 pic.twitter.com/Ht6z95BHzZ
— Abiy Ahmed Ali 🇪🇹 (@AbiyAhmedAli) May 22, 2021