Fortune News | Apr 26,2019
Jul 3 , 2023
Ethiopia's state-run telecommunications giant, Ethio telecom, has its executives voicing concerns over the proposed public procurement legislation that aims to rope in public enterprises. The bill was tabled before the Standing Committee of Planning, Budget & Finance Affairs, led by Desalegn Wodajo.
The authors of the proposed bill underscore the government's drive for more transparency, fair competition, and optimized efficiency in public enterprises. However, it also brings to the fore the inherent tensions between regulation and flexibility, particularly in sectors transitioning from monopolistic control to competitive environments. The aftermath of the bill's implementation, dependent on various factors like the specifics of the legislation and the company's adaptability, will be a crucial determinant in the trajectory of Ethiopia's telecommunications sector.
Robel Tarekegn, the head of Contract & Agreement at Ethio telecom, articulated the Corporation's apprehensions about the potential regulatory constraints. In a market that is opening up to competition and fostering innovation, Robel asserted the importance of flexibility in procurement. He argued that directors of the Board previously held the authority to approve procurement decisions, even during the company's monopolistic reign over Ethiopia's telecom sector.
These regulatory concerns are surfacing in the midst of Ethiopia's attempts to liberalise its telecommunication sector. The Ethiopian Communications Authority (ECA) is granting a second nationwide telecom operator license, the first of which was acquired by Kenya's Safaricom last year. This ended Ethio telecom's more than century-long monopoly, marking a significant milestone in the country's telecom history.
Haji Ibsa, the director general of the Public Procurement & Property Authority (PPPA), delivered a resolute response to Ethio telecom executives' concerns. He affirmed the Corporation's fate as sealed, with further instructions tailored to each sector to be issued in due course.
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