(Ecofin Agency) - The Ethiopian government announced last year it has started the process to open part of the capital of the incumbent Ethio Telecom to private investors. However, the government now says it has to reschedule the process. The new decision was made public last March 18 via a tweet by the Ministry of Finance.

"Given the recent developments and fast-moving macroeconomic changes, both globally and from a country perspective, the government of Ethiopia has chosen to postpone the privatization process," the tweet reads, stressing that “the Government believes that taking time to accommodate the improved macroeconomic situation as well as continually improving the financial performance of Ethio Telecom will result in better value for all the parties involved.”

In June 2021, the Ethiopian government had launched a bidding process for the sale of 40% of the incumbent's capital to an international company. This privatization is part of a national economic reform program that began in December 2019. The process was supposed to be in its final phase, but the security crisis that sparked in the northern part of the country since November 2020 has thwarted the authorities' plans.

For the Ethiopian government, the postponement of Ethio Telecom's privatization will allow it to take time to adjust to the prevailing macroeconomic situation and to continuously improve the operator's financial performance.

According to Frehiwot Tamiru (pictured), the state-owned company's CEO, Ethio Telecom has missed its financial targets for the H1 2021 by 13.6%. The telecom company recorded a revenue of 28 billion birr ($565 million), still growing by 6.7% compared to the same period in 2020.

Isaac K. Kassouwi