IsEthiopia’s telcolicence awinoraflop?


Ethiopia has awarded a telecommunications licence to a consortium of foreign investors in what the government has repeatedly hailed as the ‘deal of the century.’ As the country struggles with internal stability, external analysts question howpivotal the contract will be. The finance ministry and the

Ethiopian Communications Authority (ECA) handed the new telecomoperating licence to a consortium led by Kenya’s Safaricom on May 22, putting an end to more than a century of state monopoly in the sector. The consortium includes UK’s

Vodafone and CDC Group, South Africa’s Vodacom and Japan’s Sumitomo Corporation. It will set up a new operating company to start providing services to the 112 million- strong market from 2022, Safaricom said in a statement on May 24. Safaricom and its partners bid

$850m for the licencing fee, senior adviser to the finance ministry, Brook Taye, told the news agency AFP. Overall, they are expected to invest over $8bn over the next 10 years. “This will be the single largest foreign direct investment (FDI) into Ethiopia to date,” prime minister Abiy Ahmed wrote on Twitter on May 22. Thiscommitment “makes

commercial sense,” says Ed Hobey- Hamsher, senior Africa analyst at risk intelligence firmVerisk Maplecroft, but doubts remain over how successful the whole initiative will be. This deal has been at the crux of

Mr Ahmed’s economic liberalisation agenda. “With the liberalisation of the telecom market through a fair and transparent process, the government enables every Ethiopian to access quality services at an affordable price,” finance


Amazon’s new AfricanHQ

Amazonhaswonapproval to build its African headquarters (HQ) in Cape Townand is expected to bring thousands of jobs to the aspiring tech hub. But the firmis keeping its plans quiet, sparking speculation over what it will do with the space. The company has been on the

continent for 17 years, but hasn’t entered the local e-commerce market. This has sparked speculation about whether the firmintends to grow the presence of its cloud computing arm, AmazonWeb Services, or if it will launch an online retail business. On April 19, the city of Cape

Townissued a statement approving the R4bn ($276m) River Club project, a multi-use development in which the “US retail giant, Amazon, will be the anchor tenant, opening a base of operations on the African continent.” “I’m delighted they are

High hopes: Ethiopia expects the liberalisation of the telecom sector to improve the lives of its citizens

minister Ahmed Shide said following the announcement. However, the tendering process

has been far from frictionless. Despite the hype, the government failed to lure offers from multiple international companies as it originally expected, with Safaricom’s and another bid by South African MTN being the only ones on the table. “Telecommunications companies

were unnerved by the lack of prior notification they received,” says Mr Hobey-Hamsher. “The ECAmoved the goalposts several times, especially over pricing and the package of services being tendered.” The nowtwice-delayed Ethiopian

national elections approaching in June have also raised eyebrows over the timing of the whole operation. “The timing of the licence award

was almost certainly due to electoral considerations,’’ says Mr Hobey- Hamsher. “The liberalisation of the telecoms sector is central to Mr Ahmed’s economic reform programme, but little demonstrable progress has since been made.”■ NAOMIGALLAGHER

expanding…to theirHQfor Africa,” Cape Townmayoral committee member and alderman James Vos said on public radio, two days after the statement was released.■ DANIELLEMYLES

Guineasigns solarcontract

UK-based InfraCo Africa and France-based Solvéo Energie have signed a 25-year power purchase agreement (PPA) with Guinea’s national power utility, Electricité de Guinée, ahead of the country’s first on-grid photovoltaic plant being built. InfraCo Africa and Solvéo Energie

are developing the40MW Khoumagueli solar project, which is set to be Guinea’s first grid-connected solar plant. The PPA signing follows a concession agreement for the project, signed in February 2019. InfraCo Africa has committed $2.8m to the project and expects the plant to go online by early 2023. Gilles Vaes, chief executive of

InfraCo Africa, said in a statement that the signing is a “key milestone for the Khoumagueli solar project, which will deliver reliable, affordable power to Guinea’s homes and businesses”.■ SETHO’FARRELL June/July 2021



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