- Ethiopia’s first IPO marks the start of its new stock exchange.
- The launch follows economic reforms aimed at boosting private sector growth.
What happened: Ethio telecom launches IPO to kickstart stock exchange
Ethiopia will launch its first stock exchange later this year, with Ethio Telecom’s IPO playing a key role. On 17 October, the state-owned telecom company began selling 10% of its shares to the public, marking an important milestone in the country’s economic transformation.
The shares are sold exclusively to Ethiopian citizens through the TeleBirr mobile payment service. The offer includes 100 million ordinary shares priced at 300 birr each, aiming to raise 30 billion birr ($250 million). The IPO runs until 3 January, after which Ethio Telecom plans to list its shares on the new Ethiopian Securities Exchange (ESX), set to open by mid-November.
With 78.3 million customers, Ethio Telecom is undergoing privatisation as part of wider economic reforms. The government plans to sell 45% of the company to both local and foreign investors, while keeping 45% of the shares. The ESX, with other potential listings in the pipeline, aims to expand investment opportunities in Ethiopia’s rapidly transforming economy.
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Why it’s important
The launch of Ethio Telecom’s IPO and the upcoming Ethiopian Securities Exchange mark key moments in Ethiopia’s economic transformation. These events are part of the government’s strategy to move the country towards a private-sector-driven growth model. By offering shares to the public, the IPO aims to engage local investors, while the broader privatisation efforts aim to boost investment, competition, and overall economic growth.
The creation of the ESX is particularly important, as it will provide a formal platform for businesses to raise capital and attract investment. This is crucial not only for large companies but also for smaller ones seeking to grow. The IPO and the upcoming stock exchange launch are vital to the government’s plan to open up capital markets, with potential listings of other state-owned enterprises like Ethiopian Shipping and Logistics Services and Ethiopian Insurance Corporation.
With support from international organisations such as the World Bank, Ethiopia aims to attract foreign portfolio investments. These efforts are designed to increase foreign exchange reserves, reduce reliance on external aid, and drive long-term economic growth.
