Ethiopia to allow privatisation of Ethiopian Airlines, telecoms

Ethiopia to allow privatisation of Ethiopian Airlines, telecoms

Ethiopia will open its national carrier Ethiopian Airlines and state-owned telecom company to investors for the first time by selling minority stakes in the two firms.

The move is part of a wider effort by Ethiopia’s new Prime Minister Abiy Ahmed to reform East Africa’s fastest growing economy, which is dominated by the state. Ahmed, in power since March 2018, has already reduced the role of Ethiopia’s powerful military in construction and similar projects, and lifted a state of emergency introduced after anti-government protests threatened to engulf the nation.

The news will excite private domestic and foreign investors who have long targeted the East African country of more than 100m people for major investment. Ethiopian Airlines is Africa’s largest and most profitable large-scale airline serving almost 70 cities worldwide from the capital, Addis Ababa, and it recently reached a fleet of 100 aircraft.

The government will also dispose of equity in the carrier, along with Ethio Telecom, Ethiopian Electric Power, and the Ethiopian Shipping & Logistics Services Enterprise. 

Political Reform

The ruling Ethiopian People’s Revolutionary Democratic Front (EPRDF) coalition, in power since 1991, has long supported deep state involvement in the economy, but the EPRDF said that Ethiopia needed economic reforms to sustain rapid growth and boost its exports. The changes in the East African country have come following nearly four years of political unrest triggered by government plans to expand the boundaries of Addis Ababa into the Oromia region, which is home to the Oromo, Ethiopia’s largest ethno-national group.

The Oromo protesters expanded into calls for greater political reforms including the release of political prisoners and socioeconomic rights for the Oromo, who make up more than 34% of the population, and the Amhara, Ethiopia’s second-largest ethnic group. Both ethnic groups have long complained that they have been marginalised by the Tigrayans who, despite only accounting for 6% of the population, hold most influential positions in the government, economy and security.   

The protests eventually led to the resignation of former Prime Minister Hailemariam Desalegn. Ahmed, who belongs to the Oromo ethnic group, has vowed to enact reforms to make the economy more inclusive and he has also released some political prisoners. The opening up of the airline and telecoms industry is another step towards achieving his stated goals. 


Rate this article

Author Thumbnail
Written by African Business Magazine

African Business and its award-winning team is widely respected for its editorial excellence. We provide the all important tools enabling you to maintain a critical edge in a continent that is changing the world. Our special reports profile a wide range of sectors and industries including Energy, Oil and Gas, Aviation, Agriculture to name but a few.

Related Posts

  • Kenya’s budget woes

    In September, the Kenyan government passed the country’s biggest ever budget. The rise in taxes is leading to a squeeze that is provoking discontent among citizens and corporates …

  • Namibia moves towards land expropriation

    Land reform is a pressing issue in Namibia. President Hage Geingob has called for expropriation without compensation, a move that many landowners oppose. With the 2019 election drawing …

  • Ride-hailing apps takeover Lagos

    Ride-hailing apps are slowly taking over the motorcycle taxi market in Lagos, Nigeria.   Smallholder farmer Mohammed Abubakar knew he had few chances of earning a …

  • South Africa’s tourism sector aims high

    South Africa’s tourism industry has great untapped potential. The government’s tourist agency plans to boost visitor numbers by over 40% by 2021. Perched above Johannesburg’s tough inner …

Join our mailing list

If you would like Independent, Informative and Invaluable news analysis on the African continent, delivered straight to your inbox, join our mailing list.

Help us deliver better content