What's the opposite of a bidding war?

and a diplomatic blunder of Herculean proportions

Nov 20, 2023

Hi,

Welcome to Sifter, a weekly newsletter that brings you the top 5 stories of the week in Ethiopia. Last week’s news cycle was busier than most and it was harder to get the stories down to five.

For instance, I didn’t include an update on the security situation in Ethiopia’s Amhara region nor on developments related to the foreign debt situation. There’ll likely be more news on both ends soon enough and I’ll be sure to include it then. If you can’t wait until then though, go here for security and here for foreign debt updates.

If you’re looking to widen your reading horizons, please check out Priti’s Reframing Disability; last week’s edition was on how to make music accessible for deaf and hard-of-hearing individuals.

I’m Maya Misikir, and I’m the freelance reporter who runs this newsletter from Addis Abeba. I’ll be including a year-end survey in the coming editions (it’s going to be a year guys!!) but for now, the news.

Telecom: third license on pause

There are two telecom service providers in Ethiopia. Ethiotelecom is the state-owned telecom provider and has had an uncontested reign for over 100 years in the country, due to tight laws that did not allow for foreign players in the sector.

Safaricom Ethiopia became the new telecom provider when it officially launched its services last year. The process for Safaricom to enter this market took its time. The decision to liberalize (and privatize) the telecom market came in 2018 when Prime Minister Abiy Ahmed came to power. But it took about two more years after that decision was made public to actually put out a tender for interested companies.

During that time, a telecom regulatory body was established in the country and laws that would govern the operation of multiple players in the sector (like dispute resolution) were put in place.

Once Safaricom Ethiopia was announced a winner in 2021 (at 850 million U.S. dollars for the license alone!), it took more than a year for the company to officially roll out its services.

But Safaricom Ethiopia was one of many bidders at the time. The original plan by the government was to give out two licenses at once, but the second-best bid came in at 600 million U.S. dollars (by MTN) and it wasn’t quite cutting it for the government. So it was postponed until June of this year when the second tender process was restarted.

But it looks like another attempt to get telecom companies interested may have gone bust, according to a new report by Bloomberg.

Here’s an excerpt from the story:

“Ethiopia’s plan to lure investors is being stymied by concerns about instability in several regions of the most-populated nation in Africa after Nigeria, a year after it emerged from a civil war.”

But the government’s regulatory body says the issue is not a lack of interested bidders, it’s just that the potentially interested investors have concerns that need addressing according to another report by local outlet The Reporter. These concerns include, ‘investment environment and fears regarding roll-out targets.’ The government is just taking time to address it, the story adds.

But in another story by Reuters, the state Minister of Finance is quoted as saying that the submissions of interest the government received were not, ‘the kind of quality and quantity that we have expected.’

It’s looking like that 600 million U.S. dollars from MTN might have been the one that got away.

On a related note, in its most recent profit reports, Vodacom, the telecom company that co-owns Safaricom Ethiopia, also took a hit because its investment in Ethiopia has not yet made returns.

The investment necessary for Safaricom Ethiopia to start operations was 1.6 billion U.S. dollars. They’re expecting to hit breakeven in its fourth year.

The full story on Bloomberg here, and The Reporter here.

Law: immunity, just another word

The Ethiopian police force is notorious for roughing up ordinary citizens for real and imagined law-breaking. Their defiance has gotten so out of hand that parliamentarians questioned the head of the Federal Police in May on why the police force was failing to follow even court-mandated orders. You can go here to refresh your memory on that.

Last week, news broke on the unlawful arrest, detention, and physical assault of two African Development Bank Group officials by the police, cementing the fact that no one is safe from their abuse, not even high-level diplomats.

The Bank, which lodged a formal complaint, says that the Prime Minister intervened to get the officials released and that he, ‘promised to order an immediate investigation into the incident.’

Here’s an excerpt from the Bank’s official statement on the response from the government:

For their part, the government has formally acknowledged our complaint, recognised the gravity of the incident, and reassured us that all those involved in breaking the law will be thoroughly investigated and brought to justice, ensuring transparency and full accountability.”

Speculations are circulating on social media on why this happened and who was behind this order and I will be sure to include updates on this in coming editions.

The full statement from the African Development Bank Group here.

Peace: about the rebels in western Ethiopia

In what is generally considered good news, a rebel group operating in yet another region in Ethiopia has laid down arms. The region is Benishangul-Gumuz and the source of this news is the region’s communication bureau which said that the rebel group, which had responded to a call for peace, was welcomed by the community last week.

The rebel group is known as the Gumuz People's Democratic Movement and for those of you who have been reading this newsletter long enough, I wrote an update about this back in July when they had staged an attack in the region leading to the death of eight people.

This is also not the first time there has been an announcement of a peaceful agreement between the regional government and the rebel group. The two had signed an agreement to resolve differences through peaceful dialogue in October last year.

So why an attack in July? At the time, the Ethiopian Human Rights Commission had shared a report saying that despite the peace agreement, the group had not been disarmed. In fact, it looked like they had just been told to remain in one area of the region, and were terrorizing residents.

Part of the problem reported was that members of the rebel group were promised land and other resources to help integrate them back into normal life, which hadn’t happened.

The regional government of Benishangul-Gumuz announced that part of this latest peace agreement included giving the rebels employment opportunities in the agriculture sector.

The Benishangul-Gumuz regional government statement here in Amharic, and the English post by local outlet Addis Standard here.

Climate change: severe floods follow severe drought

There have been heavy floods recorded across five regions in Ethiopia. This has caused a humanitarian crisis affecting over 600,000 people in the country’s Somali region alone. A lot of areas remain inaccessible because the floods have blocked roads or washed away bridges according to a report by a UN agency. Other areas affected by flash floods are Afar, Oromia, Gambella, and South Ethiopia region.

Here's an excerpt from the report:

Floods since rains started in October, have affected at least 763,100 people across several regions and 33 lives lost (in Somali Region alone) and immense damage brought to health, transportation, school infrastructure and livelihoods.

The UN agency says that the response has not been as needed. Only 8 percent of the people affected in Somali region have been reached.

But this is not just happening in Ethiopia. Other countries in the Horn of Africa, like Somalia and Kenya, have also been seriously affected. ‘Relentless heavy downpours’ across all three countries have displaced hundreds of thousands of people who are now at the mercy of aid providers.

This flooding comes after a record drought of 40 years in the Horn of Africa, leaving the African continent, once again, to face the consequence of everyone else’s colossal mess up.

The full report on Ethiopia by UN-OCHA here and on Save the Children’s report on the Horn of Africa here.

Aid: USAID resumes support

USAID paused food aid in Ethiopia in May of this year. This was because an investigation had revealed that it was being subverted and sold off in the markets instead of going to those who needed it. Following the war in Ethiopia’s Tigray region, the number of people who need food aid stands at 20 million in the country.

In October, this food aid was resumed but only to refugees in the country, where it hit the hardest according to a report by the Ethiopian Human Rights Commission.

Now, after nearly five months, USAID has decided to resume this support fully, after making what it says are, ‘comprehensive reforms’. One of these reforms is that the list of people who get this food support is drawn up by both the USAID and the Ethiopian government. Formerly, it was left to the Ethiopian government.

Here’s an excerpt from the Washington Post on what other changes have been made:

“Under the new agreement, the government will no longer be responsible for securing warehouses — which will be placed under aid agency control — or drawing up lists of the needy, an aid official said. Third-party monitoring will be expanded. One person will also no longer be allowed to collect food for a larger group of families, and each household has a new photographic identity card that is scanned when they collect their rations.”

The USAID in a statement said that this new rollout will be tested out for a year’s time, during which they’ll closely monitor how the food is being distributed.

The full story on the Washington Post here, and the statement by USAID here.

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Sifter