The Ethiopian government has announced a proposed bid for the privatization of a government-owned telecommunications company known as ‘Ethio Telecom’.
The authorities of the East African country had part of the bidding process invited private investors to acquire a 40 percent stake in the country’s official Telcom service provider.
Ethiopia Finance Ministry, in the forefront of the bidding process, has delivered a ‘Request For Proposal’ (RFP) for partial privatization of ‘EthioTelecom’, a move that is designed to attract investments from interested firms and private entities that can “add value to the company by bringing in best practice in terms operations, infrastructure management, and next-generation technological capabilities,” according to the ministry’s statement.
Partial privatization of a government-owned institution, a known method of giving some certain percentage of equity to private firms is a common practice adopted in countries of Central and East Europe, a method that allows a more or less large number of residual shareholdings to still be in the purview of the government. It also has a remarkable constructive effect on the profitability of enterprises, their productivity, and subsequent investment.
