ECA - Afrikan Heroes

Ethiopia To Welcome New Telecom Entrants February

January 2, 2023

Balcha Reba, director-general at the Ethiopian Communications Authority

The Ethiopian Communication Authority (ECA) is planning to release an expression of interest for a third telecom provider in early February 2023, according to the authority’s Director General.

This follows the authority’s publication of a call for stakeholder engagement for the third telecoms operating licence on November 16, 2022.

“ECA has now resumed the licensing process for a third license or the second new full-service nationwide telecommunications license,” said Balcha Reba, ECA Director General, indicating that the country has huge potential to serve an additional telecom operator. “We have invited different international consultation companies to evaluate the document,” he added.

As stated by Balcha, “Preparations are underway to float an expression of Interest to bring potential investors who can acquire the third licence or the second new full-service licence.” The regulator has been keen to invite potential bidders and any interested parties to participate in a consultation process.

The licence will be granted through a competitive procurement procedure, per the stakeholder consultation paper, and it will happen in the first quarter of 2023.

Similar to this, it will post an expression of interest in early February that will remain up for a month after evaluating the coverage of all answers from stakeholders for the upcoming month. Regarding other financial endeavours, it is claimed that after meeting the National Bank of Ethiopia’s conditions, the prospective new entrant will be permitted to offer mobile financial services.

In order to advance the implementation of the government’s economic reform agenda and to increase competition in the telecommunications sector in the context of bettering market conditions, the government announced its decision to move forward with the reform of Ethiopia’s telecommunications sector in October 2018.

In June 2020, the government put out a request for proposals for two extra telecom licences, and after only one new operator was chosen, the ECA cancelled the B bid for the other licence.

Following the cancellation, on September 28, 2021, ECA released a Request for Proposal (RFP) for the second brand-new full-service countrywide Telecommunications Service License, and the bidding process was still active at that time. However, the procedure came to an end in December 2021 after ECA announced that the bidders had temporarily withdrawn their bids. In a message to the industry, ECA stated that it had received “concerns and requests from multiple prospective bidders to delay the process” regarding the follow-up.

After failing twice, the bid is now refloated for a third time.

On May 31, 2021, the ECA granted the Global Partnership for Ethiopia (“License A”), a private partnership made up of Safaricom (Kenya), Vodafone Group (UK), Vodacom Group (South Africa), CDC Group (UK), and Sumitomo Corporation (Japan), now doing business as Safaricom Telecommunications Ethiopia, Ethiopia’s first-ever competitively-tendered Unified Telecommunications Operator License.

The government is currently selling a 40% interest in the publicly traded Ethio Telecom.

Ethiopia telecom Ethiopia telecom

DFC And Mastercard To Provide $50M To Drive Digitalization And Financial Inclusion In Africa

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert.
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard

Ethiopia Says There is No Shortlist Yet for Telecoms Bidding for Licences

February 24, 2021

The Ethiopian Communication Authority (ECA) has said that contrary to media reports, it has not shortlisted the names of bidders for the licenses. The ECA said it is currently receiving proposals from global telcos interested in operating in the Ethiopian telecommunication industry currently under the stronghold of Ethiopian Telecommunication Corporation (Ethio Telecom).The regulator said through its Twitter handle that the request for proposals (RFP) process, which started in November 27, 2020 is still ongoing, and the proposal submission deadline is April 5, this year.

“We wish to clarify that to date no bidder has been shortlisted, and none excluded or disqualified from responding to the RFP. There is no shortlist. It is an open competitive bidding process,” said an ECA statement.

The ECA has opened up the Ethiopian telecom market to competition by awarding two full-service licences to multinational mobile phone operators to break the monopoly enjoyed by the state-owned telco. Liberalisation of Ethiopia’s telecoms sector is part of the government’s 2019 Home Grown Economic Reform Agenda which underscores the role of the private sector in driving sustained growth and creating jobs.

According to the authority the latest step in the liberalisation process was the RFP launch on November 27, 2020 after 12 firms had made Expressions of Interest (EoIs) on the country’s two new telecoms licences, in June 2020. These firms included a consortium consisting Kenya’s Safaricom, Vodafone and Vodacom branded as Global Partnership for Ethiopia. Others are Madagascar’s Axian, South Africa’s MTN Group and Telkom SA, France’s Orange Group, Saudi Arabia’s stc, the United Arab Emirates’ Etisalat, Pan-African group Liquid Telecom and the Chinese mobile virtual network operator (MVNO) Snail Mobile.

The licences are expected to generate around $1 billion in revenue and will have an initial validity of 15 years, with options for renewal. The beneficiaries of the licences will be required to commit to reasonable pricing structures as well as meeting agreed coverage quotas for geographies, population, universal access and tele-density. Safaricom, has reportedly signed an agreement to borrow up to $500 million from America’s sovereign wealth fund United States International Development Finance Corporation to fund the Ethiopia expansion.

Ethiopia’s telecoms industry is considered a lucrative market due to its more than 100 million people market. The country is pushing on with the sale of the two licences and sale of a 45 percent stake in state monopoly Ethio Telecoms.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

EU Urged to Target Development Aid to Kenya for Better Impact

September 8, 2020

The European Commission and External Action Service (EEAS) have not demonstrated that European Development Fund (EDF) aid to Kenya between 2014 and 2020 addressed the country’s development obstacles and focused on reducing poverty, according to a new report by the European Court of Auditors (ECA). Projects funded under the previous 2008-2013 EDF delivered outcomes as expected, but have not had a visible impact on Kenya’s overall economic development. The auditors now call on the EU to rethink its approach to allocating development aid.

EU development aid is aimed at reducing and ultimately eradicating poverty in the supported countries by incentivising good governance and sustainable economic growth. The EDF is Kenya’s main source of EU funding. The aid received by the country under the 11th EDF, between 2014 and 2020, amounted to €435 million, around 0.6 % of its tax revenue. The auditors examined whether the Commission and the EEAS had targeted it effectively towards where it could contribute most to reducing poverty.

“We did not see sufficient evidence that aid under the 11th EDF is channeled to where it can do most to reduce poverty,” said Juhan Parts, the ECA Member responsible for the report. “Job creation is the most effective and sustainable way to reduce poverty, so EU funds should primarily be focused on economic development.”

The auditors found that the process of allocating EDF aid does not allow it to be linked to a country’s performance, its governance, or its commitment to structural reforms or fighting corruption. The Commission and the EEAS allocated around 90 % of Kenya’s 2014-2020 funding from the EDF using a standard formula for the African, Caribbean and Pacific (ACP) countries, which does not address their specific development obstacles or the funding gap. The country allocations also did not take into accounts other donors’ grants or loans.

The aid covered only a small fraction of Kenya’s development needs and was spread across many areas, including agriculture, drought emergencies, energy and transport infrastructure, elections, public financial management and the justice system. Spreading funding over so many areas increases the risk of not reaching the necessary critical mass to achieve significant results in any single sector, warn the auditors. Furthermore, the reasoning behind the selection of sectors is not clear enough: the Commission and the EEAS did not carry out their own specific assessment of the country’s development obstacles and objectives, and did not explain how and why the supported sectors would assist most in reducing poverty.

The auditors found no reason why the Commission and the EEAS had chosen not to directly support the manufacturing sector, a sector which has great potential to create jobs. Most funding went to food security and climate resilience (€228.5 million), where it is likely to improve the living standard of the rural communities and small farmers, particularly in dry areas, but does not help progress towards farming commercialisation and the expansion of agro-processing. Conversely, the funding provided for energy and transport infrastructure (€175 million) is too limited to achieve the very ambitious objectives agreed with the Kenyan authorities and to make a significant impact. Considering the perception of widespread corruption in the country, the auditors also argue that the EU’s direct support for measures against corruption was limited.

The auditors recommend that the Commission and the EEAS: examine the EU’s method for allocating funding between ACP countries and make it conditional upon the recipient country’s performance and commitment to reforms; assess critical mass when selecting focal sectors in Kenya, and prioritise the country’s sustainable economic development and the rule of law.

The EDF is made up of contributions from EU Member States outside the EU budget. Each EDF generally lasts from five to seven years. Under the 11th EDF, 75 ACP countries received a total of €15 billion. The allocation was based on five indicators: population, GNI per capita, Human Asset Index, Economic Vulnerability Index, and Worldwide Governance Indicators. Countries with large populations such as Kenya received proportionally less funding. The legal framework for EU development aid to ACP countries is the Cotonou Agreement, which expired in February 2020, with transitional measures in place until December 2020. Discussions on a successor agreement are ongoing.

Kenya’s population of 47 million in 2016 is projected to reach about 85 million by 2050. The country’s urbanisation rate is rising rapidly, creating more demand for jobs in cities. In 2016, 36 % of Kenya’s population was below the poverty line, living on less than $1.90 a day, and over 20 % suffered from undernourishment. Kenya’s economy still rests on agriculture, which makes up a third of its GDP, while manufacturing remains at only 10 %, the same proportion as 40 years ago. From 2003 to 2018, Kenya’s GDP growth has been below the regional average. Transparency International’s Corruption Perception Index 2018 ranks it 144th out of 180 countries.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry