Djibouti to sell minority stake in state-owned telco

DJIBOUTI – The government of Djibouti has launched a tender process to partly privatise state-owned carrier Djibouti Telecom, part of a plan to modernise the economy and revamp government firms.

“The state will offer a minority and significant portion of its shareholding to a first-rate strategic partner,” the government said in a statement after a cabinet meeting to approve the plan.

The telco, one of the last state-owned national monopolies on the continent, has about 410,000 mobile subscribers, according to 2019 World Bank data.

It was not known how much the government in the strategic Horn of Africa state planned to earn from the sale.

With Djibouti boasting 12 high-capacity undersea cables, the government said investors would be “strategically positioned” to connect the region, the continent and the rest of the world.

The country is the latest in the Horn of Africa to open up its monopolistic telecoms sector.

Neighbouring Ethiopia last month began selling a 40 percent stake in state-owned carrier Ethio Telecom and granted a licence to a consortium of private telecommunication operators.

Djibouti’s veteran ruler Ismail Omar Guelleh said the government hoped to accelerate the pace of reforms concerning public sector companies, “to better cope with international and regional competition”.

The tiny but strategic country of about one million people has remained stable in a volatile neighbourhood and enjoys a GDP per capita income higher than much of sub-Saharan Africa.

However, around 20 percent of its population lives in extreme poverty and 26 percent are unemployed, according to the World Bank.

Djibouti’s economy shrank one percent in 2020, but is expected to grow seven percent this year, the International Monetary Fund says.

The privatisation of the carrier “should result in direct positive consequences for Djiboutian citizens and businesses”, the government said, adding it was aiming to “rapidly develop an entire ecosystem linked to the digital economy”.

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