Unclear ICT future for Ethiopia following Zenawi's death
- Published on 21 August 2012
The death of Ethiopia’s Prime Minister Meles Zenawi comes at a time when the East African nation’s Information and Communications Technology (ICT) sector has slowly started showing signs of opening up. But a prominent analyst has mixed feelings about what future changes, if any, the end of Zenawi's two-decade rule could bring to the sector.
The 57-year-old Prime Minister Zenawi, in power for over twenty years, has died in hospital abroad, Ethiopia’s government confirmed today.
Zenawi had not been seen in public for two months and it had been widely reported that he had been sick in a Brussels hospital, although no details of his illness or exact location have been confirmed.
Zenawi was a former rebel fighter who came to power in 1991, after helping to overthrow the dictatorship of Mengistu Haile Mariam.
And following his death, Deputy Prime Minister Hailemariam Desalegn is to "act on behalf of the Prime Minister in his absence", according to the country’s government. The country has a President, in the form of Girma Wolde-Giorgis, but analysts say this position is largely symbolic, and that real power rested with Prime Minister Zenawi while he was alive.
Zenawi’s passing away, though, further comes at a time when Ethiopia’s monopolistic economy has slowly started opening up to foreign investment, with multinational telcos eyeing the potential of its ICT sector in particular.
According to the World Bank, the East African country has an estimated population of 82 million, making it the third largest country in Africa after Egypt and Nigeria. But Ethiopia only has 16.8 million mobile subscribers and a mobile penetration rate of 18.9%, according to Informa Telecoms & Media research.
The reason for the country’s low mobile take-up is due to the fact that state-owned operator, the Ethiopian Telecommunications Corporation (Ethio-Telecom), is the only organisation allowed to deliver telco services in the country. Also, Ethiopia is one of the poorest countries in the world, as the nation’s finance ministry officials last year said about 25 million of Ethiopia's approximately 80 million people live below the poverty line.
But this has not held back growth in the country’s telco sector, as research company BuddeComm released a report earlier this year that said Ethiopia recorded a 116% mobile market growth rate, the fastest of all countries on the continent as of mid-2011.
Danson Njue, an analyst with Informa Telecoms & Media focusing on East Africa, confirmed that the country has “seen a lot of changes” in the last two years in terms of its telco sector.
“Initially, it was very hard to buy SIM cards in the country, but nowadays you can go to any shop and buy,” he says.
He adds that obtaining postpaid products in the country has also become easier.
But he is unsure of what changes, if any, Zenawi’s death could bring to the telco sector, and Danson says many experts could adopt a “wait-and-see approach”.
He also adds that while Ethiopia has been opening up to companies such as mobile operator MTN (which has an office in the country but which cannot operate as a telco there), the country’s telecoms sector is still very much under government control.
“Inasmuch as they’re trying to liberalise, they’re not wanting to bring in competition,” says Njue.