Opposition Party Decries Ethio Telecom Privatisation

The Ethiopian Citizens for Social Justice Party, widely known as Ezema, has put out a statement decrying the decision of the government to continue with the partial privatisation of state-owned Ethio telecom.

Released on June 25, 2020, the statement urges the government to re-evaluate the decision to sell shares of the company citing how drastically the economy has changed since the process began. Ezema denounced the ruling party‘s decision further since it considers Ethio telecom to be merely a common information exchange tool when it should be treated as an entity that has greater value and wider implications for the country.

"Telecom is a strategic sector that can also determine the growth of other sectors," said Nathanael Feleqe, the party's public relations head. "At a time when countries are looking toward solutions that make them self-sufficient, the country needs to pay more attention and take time to assess the comparative advantage of relinquishing shares of the company."

The statement went on to underline the importance of telecommunication as the blood vessel of media outlets, its role in national and military information correspondence, and as a source of national security data.

"Telecommunication is the main infrastructure with which national security information is not only exchanged but stored as well," said Nathanael. "This applies in a similar way to financial institutions. In a world where cases of cyber attacks are increasing, it will put the public interest at stake."

The party said that the government had privatised 230 companies in the past and attested that this method does not guarantee profitability and efficiency based on their trajectory. The statement gave Ethiopian Airlines as a prime example of a government-owned corporation excelling in a very competitive market.

"The airline has shown that government ownership doesn't exclude it from being successful if we take the mode of operation of the airlines as a model to follow," added Nathanael.

Comparing Ethiopian Airlines with Ethio telecom is not advisable due to the different nature of their playing fields, according to Tadele Ferede (PhD), assistant professor of economics at Addis Abeba University.

"Ethiopian Airlines is in the global market with international competitors," he said. "It has to stay on top of everything and use state-of-the-art technology to be relevant. With what is Ethio telecom competing?"

After the ruling party has decided to partially privatise the company, Ethio telecom hired KPMG to conduct an asset valuation. And the Ministry of Finance is in the final stage of hiring a transaction advisory firm for the privatisation process.