Kenya will continue to dream about Ethiopia's market

Geza Ulole

JF-Expert Member
Joined
Oct 31, 2009
Posts
65,136
Reaction score
91,917
Ethiopia not ready for foreign investment in telecoms, banking — president
TUESDAY APRIL 24 2018

Polish President Andrzej Duda (L) and his Ethiopian counterpart Mulatu Teshome Wirtu inspect an honour guard during a welcoming ceremony at the presidential palace in Warsaw, Poland, on April 24, 2018. AFP PHOTO | JANEK SKARZYNSKI

In Summary
  • The country, which has one of the last state telecoms monopolies on the continent, has let foreign companies including fashion chain H&M set up factories in a decade-long push to change the economic focus from agriculture to manufacturing.

By REUTERS
More by this Author
Ethiopia is not yet ready for foreign investments in its telecoms and banking sectors, but is interested in developing its manufacturing, Ethiopian President Mulatu Teshome Wirtu said on Tuesday.

The country, which has one of the last state telecoms monopolies on the continent, has let foreign companies including fashion chain H&M set up factories in a decade-long push to change the economic focus from agriculture to manufacturing.

“Ethiopia is not ready yet for accepting investments in telecoms and finance,” Mulatu said during a joint news conference with his Polish counterpart Andrzej Duda.

“Our priority is manufacturing sector. Ethiopia opens door broadly for investments in manufacturing sectors such as textiles, skin products, pharmaceuticals, food processing, and agriculture,” Mulatu said.

Ethiopia not ready for foreign investment in telecoms, banking —
 

Is Safaricom entering the Ethiopian market?
Ethio Telecom offers slow, expensive, and unreliable phone and Internet services.




Safaricom Limited's headquarters, Nairobi. The Kenyan telco had been said to be gearing up for its first venture abroad. PHOTO FILE | NMG

By JAMES ANYANZWA

More by this Author

IN SUMMARY

  • The Kenyan telco had been said to be gearing up for its first venture abroad, with reports that it was in negotiations with the Ethiopian government for a stake in state-owned monopoly Ethio Telecom.
  • Ethiopian media reported last week that the government had opened discussions with Safaricom on the sale of half of the shares of Ethio Telecom.
  • Speculation about Safaricom’s moves in Africa has intensified since May, when Vodafone Group consolidated its 35 per cent ownership of Safaricom to its African subsidiary Vodacom Group.

Safaricom has denied reports of the company entering into the Ethiopian market.

The Kenyan telco had been said to be gearing up for its first venture abroad, with reports that it was in negotiations with the Ethiopian government for a stake in state-owned monopoly Ethio Telecom.

“We wish to categorically state that we are not engaged in any conversations with Ethio Telecom on this matter. Any information to the contrary is completely inaccurate,” CEO Bob Collymore told The EastAfrican.

Ethiopian media reported last week that the government had opened discussions with Safaricom on the sale of half of the shares of Ethio Telecom.

Other reports indicated that Safaricom was discussing a mobile money partnership with an Ethiopian bank.

Ethio Telecom offers slow, expensive, and unreliable phone and Internet services.

Kenya’s Principal Secretary in-charge of ICT Victor Kyalo said he had seen a tweet about the transaction.

“It is not clear whether it is Safaricom or Vodacom. I tried to check, but nobody seems to know any information. If they have, they seem to be guarding it,” Mr Kyalo told The EastAfrican. The Kenyan government owns 40 per cent of Safaricom.

Last week, Ethiopian satellite broadcaster Esat reported that both the sale of Ethio Telecom shares to Safaricom and the sale of the Addis Ababa Hilton Hotel to Ethiopian-born Saudi tycoon Sheikh Mohamnmed Hussien Alamoudi, the 159th richest man in the world according to Forbes, were part of the authorities efforts to ease the forex crunch in the country and tackle indebtedness.

READ: Vodacom, the largest share of telcom sector in EA

Foreign currency crisis

Esat said that National Bank Governor Teklewold Atnafu had recommended devaluation of the birr, to invigorate foreign trade and inflows of hard currency.

Ethiopia is facing a foreign currency crisis as a result of the poor performance of its exports sector and ballooning expenditure on infrastructure projects.

Speculation about Safaricom’s moves in Africa has intensified since May, when Vodafone Group consolidated its 35 per cent ownership of Safaricom to its African subsidiary Vodacom Group.

At Safaricom’s annual general meeting two weeks ago, Mr Collymore said that the ownership changes at the top allowed the company to set up shop in underserved areas in the region.

“These changes have freed Safaricom to take the over-the-top services into other markets,” he said at the meeting.

According to Mike McCaffrey, an independent financial technology advisor the deal benefits Vodacom by diversifying its portfolio as two of its biggest countries of operation, South Africa and DRC Congo, face serious economic and political instability.

Earlier this month, Mr Collymore was reported by the Financial Times as saying that the firm planned to expand outside Kenya, with eastern Africa and West Africa on the radar.

“In two to three years’ time we will be in four to five African countries. I don’t think we will step out of Africa because that’s too far and you have lots of other challenges,” Mr Collymore told FT.

When Ethiopian prime minister Hailemariam Desalegn visited Safaricom’s headquarters in 2012, he asked for a partnership between Safaricom and Ethiopia in growing the ICT sector.

Mr Desalegn said that Ethiopia was looking to Kenya, Brazil and Pakistan to develop its mobile telephony market and leverage off the benefits of mobile technology.

At the time, Ethiopia’s Prime Minister was accompanied by Kenya’s then ICT permanent secretary Bitange Ndemo, who now sits on the board of Safaricom.

Is Safaricom entering the Ethiopian market?

 
What of Tanzanians do they have access
 
KCB, CFC Stanbic get approval to open shop in Ethiopia
KCB and Standard Bank, the largest banks in Kenya and South Africa by assets respectively.


Customers at a KCB branch in Nairobi. PHOTO | FILE
BY RAWLINGS OTINI, rotini@ke.nationmedia.com



IN SUMMARY

  • KCB and Standard Bank, the largest banks in Kenya and South Africa by assets respectively said on Thursday they received licenses to open representative offices in Ethiopia, boosting plans to enter more markets in the region.
  • KCB also operates in Tanzania, Burundi, Uganda, South Sudan and Rwanda while CFC Stanbic has afootprint in 20 African countries.

Kenya Commercial Bank and Standard Bank Group which trades under the CFC Stanbicbrand in Kenya are eyeing a share of the fast growing Ethiopian economy with new offices.

KCB and Standard Bank, the largest banks in Kenya and South Africa by assets respectively said on Thursday they received licenses to open representative offices in Ethiopia, boosting plans to enter more markets in the region.

"KCB received the license to open a representative office in Ethiopia on Oct. 14, opening up the bank to opportunities in Africa's second-largest market by population," KCB said in a statement.

Ethiopia is the second-most populous country in Sub-Saharan Africa with a population of 96.5 million with its economic growth averaging 10 per cent in the last 10 years, it is also one of world's poorest economies.

Facilitate trade

KCB also operates in Tanzania, Burundi, Uganda, South Sudan and Rwanda while CFC Stanbic has a footprint in 20 African countries.

"The bank hopes to use its presence in Ethiopia to facilitate trade between Ethiopia and other East African countries while playing part in driving economic expansion in the country," Standard Bank chief executive, Ben Kruger said.

KCB also has annouced a 10 per cent growth in net profit helped by a significant increase in interest income.

The second top tier bank to release its quarter three results after Equity Bank’s announcement on Monday, said its net earnings to September 30, was Sh13.7 billion compared Sh12.48 billion posted during a similar period last year.


KCB, CFC Stanbic get approval to open shop in Ethiopia
 
COLLOH-MZII RELOADED said:
What of Tanzanians do they have access
Click to expand...


I love the fact Ethiopia's decision gives Kenya no room to do a sell out n short-change other members in EAC with her protectionism thinking it will have another neighbor to go for incase of retaliation from EAC members. Now u have to open up urban market for fair competition.

As for I don't fear Mozambique since Tanzanian companies r already there n logistic will be a nightmare to Kenyan companies if they r to avoid TanzanIan infrastructure. Therefore u will remain dependent on might Tanzania for movement of urgency goods for a lonew time to come. BTW Lamu to Bagamoyo road will cement that unwavering dominant position for Tanzania.
 
Kwaivo unakiri mnatutaka Ila mnaplay hard 2 get😀😀😀😀
 
It also doesn't allow Tanzania so you gain nothing in the run.
 
Why would someone celebrate when his friend fails to marry a beautiful girl yet he himself is not in a position to get the same girl...cc Geza
 
Bottas said:
Kwaivo unakiri mnatutaka Ila mnaplay hard 2 get😀😀😀😀
Click to expand...
We want u to stop being protectionist n ur kiburi will screw u up! Imagine transporting goods by trucks then train then shipping probably by Tanzanian Azamlink ferries then sgr then truck all in the name of avoiding urban nightmare Tanzania. My friend Open up those legs to get screwed before ur goods fail to compete at the destination.
 
Jay456watt said:
I can see an obsessed buffoon
Click to expand...
just wanted to show how most of u lack reasoning. U will probably stop mentioning Ethiopia as they have openly rejected ur companies to access their market another reason to know LAPSSET will be a big white elephant if agreement is reached among partners Dubai World Ethiopia Somalia n Somaliland. It will be a second port n closest to Addis ababa after that of Djibouti.
 

EABL hit by Diageo’s bid for Ethiopian brewer
WEDNESDAY, APRIL 6, 2011 0:00
BY MUGAMBI MUTEGI |





UK brewer Diageo, which owns a majority stake in East Africa Breweries Ltd (EABL), has made a direct bid for a state-owned brewer in Ethiopia, dashing the Kenyan-based firm’s hopes of entering the market.

Diageo, which owns 50.03 per cent of EABL, has taken part in a public auction of the Ethiopian brewer, Meta Abo, as it eyes rising incomes in Africa’s emerging markets and a larger stake in East Africa.

The transaction not only marks a shift in strategy for the multinational brewer, which has preferred to use EABL as its vehicle in the East Africa region, but also locks out the firm from getting a piece of the Ethiopian market.

EABL has in recent years expressed interest in buying Meta Abo.

Analysts say bidding by the parent company has quashed EABL’s ambitions of having representation across the seven eastern African nations.

On Tuesday, EABL refused to comment on its plans for the Ethiopian market.

“The response is no comment,” Ms Brenda Mbathi, the Corporate Relations director at the regional brewer said in response to the Business Daily’s inquiry.

It’s not clear why Diageo decided to go for the deal, but the UK multinational has been racing to get a larger stake in East Africa, expressing intention to buy additional shares in firms owned by EABL.

Ethiopia’s Privatisation and Public Enterprise Supervising Agency says Diageo is one of three multinational brewers, including its rivals Heineken and SABMiller, that have placed bids to acquire the brewer.

Top brewers

The world’s top three brewers’ interest in the firm is set to add impetus to the ongoing battle for control of the global beer market, with protagonists increasingly looking for new demand in emerging markets.

The East African market is increasingly becoming a battle zone between SABMiller and Diageo as both firm’s race to grow their regional footprint.

Already, a vicious battle for market dominance is under way in Uganda between Uganda Breweries, owned 98.2 per cent by EABL, and Nile Breweries, which SABMiller owns 60 per cent.

In Tanzania the two firms, which last year broke an eight year partnership that saw both run Tanzania Breweries Ltd (TBL), are in the cusp of a vicious battle for control of the market.

SABMiller holds 52.83 per cent in TBL, while EABL has bought a 51 per cent stake in Serengeti Breweries — setting off another market share war between the two.

The remaining 49 per cent stake in Serengeti will be bought by Diageo Plc between February 2014 and July 2014, signalling the UK brewer’s intention to gain a larger stake compared to that held by other EABL shareholders whose holding in the Tanzanian unit will shrink to 25 per cent.

In Sudan, EABL is planning to open a plant that will see it engage in a head-to-head battle with SAB Miller, which opened a Sh2.9 billion plant in southern Sudan in April.

The number three global brewer, Heineken, has been a late entrant into the African market but is racing to build its stake after clinching deals in Nigeria, Rwanda, and South Africa in recent months.

“With its large, growing population, political stability, improving economy and rapidly growing beer market, Ethiopia is a promising, long-term growth market for Heineken in Africa,” Heineken said in an interview with Reuters.

Low consumption

Ethiopia’s population of about 85 million people and its low consumption per capita compared to its regional counterparts is what has sparked a scramble among multinationals for a piece of the market.

The Ethiopian government is selling its stakes in three breweries including Meta Abo, Harar, and Bedele, which have a combined market share of 38 per cent.

French controlled BGI Ethiopia has a 42 per cent stake with the remaining 22 per cent controlled by Dashen.

But Diageo’s planned market entry is set to hurt EABL’s ambitions of tapping this market and reducing further its reliance on the Kenyan market that has been showing signs of maturity.

Last year, the Kenyan market generated 83 per cent of EABL’s profits and 70 per cent of its revenues

mmutegi@ke.nationmedia.com

EABL hit by Diageo’s bid for Ethiopian brewer

MY TAKE
Here ur fantasy was short changed! Jay456watt
 
Tanzania fines EABL over Serengeti acquisition
August 2, 2017 Food Business Africa

TANZANIA – Tanzania’s antitrust agency has fined East African Breweries Ltd an undisclosed amount over failure to meet the terms attached to the deal when the company acquired a controlling stake in Serengeti Breweries.

The firm was hit with the financial penalty to settle the dispute in which the Fair Competition Commission had accused the brewer of not making good on the promises made when it obtained approval for the deal in 2010

EABL group finance director György Geiszl declined to reveal the size of the fine, saying the matter was “confidential information” and was immaterial to the financial performance.

“The cost of settlement was already provided for in the fiscal year 2016, so there was no impact on the year to June 2017 financials,” said Dr Geiszl at an investor briefing on Friday.

EABL’s contingent liabilities marked as “pending legal cases” nearly tripled to Sh793.7 million in June 2016 from Sh298.8 million the previous year, according to the brewer’s latest annual report.

In July 2015, Tanzanian authorities threatened to revoke the Sh4.9 billion deal, citing breach of takeover conditions in terms of growing Serengeti’s sales, market share, and making capital investments.

“It was observed that, based on the rationale of the approval, the performance of Serengeti Breweries Ltd was not as per expectations of the commission,” FCC said.

EABL, controlled by UK’s Diageo, sold its 20 per cent stake in Tanzania Breweries in 2010 and moved to buy a 51 per cent stake in the loss-making Serengeti.

Dr Geiszl said following settlement of the dispute, EABL plans to restructure Serengeti’s balance sheet by conversion of loan to equity, but its stake will remain unchanged at 51 per cent.

“We have an agreement with class B shareholders to complete capital restructuring of Serengeti, to restore equity position and statutory profitability,” he said.

EABL net earnings for the year to June 2017 dropped 17 per cent to Sh8.5 billion, blamed on the absence of gains from asset disposals received in the previous year.

July 28, 2017: Daily Nation

Tanzania fines EABL over Serengeti acquisition
 
COLLOH-MZII RELOADED said:
Why would someone celebrate when his friend fails to marry a beautiful girl yet he himself is not in a position to get the same girl...cc Geza
Click to expand...
We never wanted that girl! Never showed even an interest at the first place.
 
you guy ur sick...no kidding
 
Ethiopia has protectionist trade policies since time immemorial and it's clear about it unlike Tz that pretends to allow free movement within EAC then backtracks when it sees Kenyans!

Your post on Ethiopia towards cross boarder trade is not news to us! I bet you just learnt about it and want us to see how you are an ardent tracker of anything mentioning Kenya!
 
wrong I wanted to show how many of u here r stupid to not know u r cornered as a country n u can't play protectionism under JPM.
 
You must log in or register to reply here.
Menu
Log in
Register
Cookies are required to use this site. You must accept them to continue using the site. Learn more…