Safaricom Ethiopia Open to Listing on Ethiopian Securities Exchange

Safaricom has expressed openness to listing Safaricom Ethiopia on the Ethiopian Securities Exchange in the future.

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Peter Ndegwa, CEO of Safaricom, who made the remark today, May 9, 2024, at a media briefing, stated Safaricom Ethiopia’s intention is to set up a business that is Ethiopian. And part of that in the future is to consider further integrating Ethiopian participation into their business model.

“We are aware of the Ethiopian government’s efforts to establish frameworks for companies to issue equity and bonds. As these frameworks mature, we will assess when to take advantage of them,” said Peter.

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Safaricom is the majority shareholder in Safaricom Ethiopia, with 25% of the company listed on the Kenyan Exchange. “All our other partners [in Safaricom Ethiopia] have a lot of experience with listings,” stated Peter.

“Currently, we rely primarily on capital from our key shareholder to operate our Ethiopian business. However, as the markets and frameworks mature, we will explore options for local investor participation through corporate bonds or equity offerings,” the CEO added.

The state-owned telecom operator, Ethio Telecom, is slated for a 10% listing on the upcoming Ethiopian Securities Exchange (ESX) this year. This initial public offering (IPO) is expected to be a key launchpad for the exchange.

Last week, Ethiopian Investment Holdings selected five additional state-owned businesses to offer their shares on the ESX. These include Ethiopian Insurance Corporation, Ethiopian Shipping and Logistics, Ethiopian Tourist Trading Enterprise, and Educational Materials Production and Distribution Enterprise.

In April, Safaricom was handed a boost after the country’s telecommunications regulator cut mobile termination rates (MTR) by 25%, making it less costly to connect its customers’ calls with those of its rival Ethio Telecom. Following these, Safaricom is soon launching cheaper bundles.

Safaricom Ethiopia has emphasized that the operator’s focus in the upcoming financial year will be on data, voice, and M-Pesa. Additionally, M-Pesa has expanded its services to include electric utility payments and is now offering a 10% cashback incentive.