Ethiopia raised 3.2 billion birr ($24 million) by selling 10% of shares in its maiden IPO for state-run Ethio Telecom, marking a step toward opening the economy. Despite falling short of its target, this marks a significant moment for Ethiopia’s stock market, which had been dormant for decades.
Ethiopia successfully raised 3.2 billion birr ($24 million) after selling 10% of the shares on offer in its maiden initial public offering (IPO). This marks a significant milestone for the country’s economy, with the IPO open for a period of 121 days.
The IPO saw the sale of 10.7 million shares of Ethio Telecom, Ethiopia’s state-run telecom company, priced at 300 birr ($6) per share. The country had initially aimed to raise 30 billion birr by selling 100 million shares. However, the offer failed to meet its target due to restrictions that excluded the Ethiopian diaspora and institutional investors from bidding, according to Ethio Telecom’s CEO Frehiwot Tamru.
Despite the shortfall in the target amount, the successful sale represents an important step in Ethiopia’s ongoing economic reform process. It opens the door for the future operationalization of the Ethiopian Securities Exchange, a move that aligns with Prime Minister Abiy Ahmed’s government efforts to open up the country’s economy and attract foreign investment.
A New Chapter for Ethiopia’s Economy
The IPO marks a return to the country’s stock market, which was previously in operation for 14 years until 1974 when the military government overthrew Emperor Haile Selassie and banned share trading. Ethiopia’s recent economic reforms, including the decision to open the currency market and ease business regulations, have paved the way for this historic move.
Ethio Telecom, the largest telecommunications provider in the country, reported a customer base of approximately 81 million users by January. For the first half of FY25, the company posted revenue of 61.9 billion birr. Despite not reaching its IPO target, the Ethiopian government plans to introduce a second round of the IPO for the unsold shares.
Looking ahead, the Ethiopian Securities Exchange aims to list as many as 50 companies within the next five years, with some firms opting for listing by introduction, which bypasses the need for an IPO. This is seen as a critical step in Ethiopia’s transition to a more market-driven economy.
