In a historic move, Ethio Telecom is set to become the first company to list on Ethiopia’s newly established stock exchange, marking a significant milestone in the country’s economic reforms. Next week, the government will float 10% of the telecom giant, opening the door to private investment in one of the nation’s most lucrative sectors.

This initial sale is just the beginning, with the government planning to divest a further 45% of Ethio Telecom in the future. The valuation of the company will become clearer after this first flotation, according to Brook Taye, CEO of Ethiopia Investment Holdings, which oversees state assets.

A Game-Changer for Ethiopia’s Economy

The move is part of Prime Minister Abiy Ahmed’s broader strategy to liberalize the economy, attracting foreign and private investments to state-owned enterprises. Ethio Telecom, which had a monopoly in the country’s telecoms industry until 2022, serves a population of around 120 million people. Its monopoly was first challenged when a consortium led by Kenya’s Safaricom won Ethiopia’s first private telecom license and began commercial operations two years ago.

Brook emphasized the vast potential of the Ethiopian telecom market, citing the need for multiple operators to meet the country’s demand. “We still think that this is a three-operator market, especially when you add the B2B and B2C sectors and broadband services to homes and offices. It’s a huge opportunity,” he stated.

Opening the Financial Sector

Beyond the telecoms sector, Ethiopia is also preparing to open its financial market to international banks. A new proclamation that aims to deregulate the banking sector is currently being reviewed by parliament and is expected to pass in the coming months. Once enacted, Ethiopia could see major continental and international banks entering its growing financial market, further boosting economic prospects.

“We’re seeing interest from banks in North and West Africa as well as from our neighboring countries,” Brook revealed. “The market is big enough to absorb several foreign banks.”

With the upcoming flotation and other reforms, Ethiopia is poised to become an attractive destination for investors, reshaping its economy for years to come.