Safaricom PLC is a listed Kenyan mobile network operator headquartered in Nairobi, Kenya. It is indeed the largest telecommunications provider in Kenya and one of the most profitable companies in East and Central Africa. The company offers mobile telephony, mobile money transfer, consumer electronics, e-commerce, cloud computing, data, music streaming, and fibre optic services. Safaricom controls approximately 64.5% of the Kenyan market as of 2020 with a subscriber base estimated at approximately 35.6 million. The telecommunication corporation also has a subsidiary located in Addis Ababa Ethiopia.
The private investment branch of the World Bank has pledged more support for the first private telecoms operator in Ethiopia, Safaricom Ethiopia. Indeed, in September, the International Finance Corporation (IFC) said that it planned to inject up to $160 million in equity, but in a statement dated June 8, the World Bank Group said that the IFC’s equity would be $157 million and that it would also provide a $100 million loan.
Following the deal, IFC will hold a minority stake in Safaricom Ethiopia. “IFC is delighted to announce its support to Safaricom Ethiopia, the first private sector-led telecoms operator in the country, and its parent company the Global Partnership for Ethiopia,” said Mohamed Gouled, Vice President of Industries at IFC.
The Multilateral Investment Guarantee Agency (MIGA) will provide 10-year guarantees of $1 billion to cover the equity investments of Safaricom Ethiopia’s shareholders: Vodafone Group, Vodacom, Safaricom, and British International Investment. A portion of the MIGA guarantees that $76 million will come from the MIGA Guarantee Facility, part of the International Development Association’s Private Sector Window.
Ethiopia is Africa’s second most populous country, with a population of approximately 120 million. The investment and guarantees will help Safaricom Ethiopia roll out and operate 4G and 5G mobile networks across the country—including in rural and urban areas. Mohamed Gouled asserted that “The Ethiopian telecommunications market—as well as the country’s economy and society—will benefit substantially from equitable, high-quality internet access and improved financial inclusion, advancing the country on a path to a more prosperous future.”
By increasing access to digital services, the project has the potential to help create up to 1.5 million direct and indirect jobs in Ethiopia, contribute to the country’s sustainable future growth, and increase both and social inclusion for Ethiopians. The project follows more than four years of World Bank Group engagements in Ethiopia aimed at opening the telecoms sector to private sector investment and supporting market liberalization.
Safaricom Ethiopia launched its first services in 2022, becoming the country’s first private mobile operator and providing competition to state-owned Ethio Telecom. Authorities are expected to reignite the search for a third player for the market later this year, alongside potentially selling s stake in the incumbent.