Uhuru says Safaricom deal good for “mutual prosperity with Ethiopia

President Uhuru Kenyatta on Tuesday said the award of an operating licence to a consortium led by Safaricom in Ethiopia will help improve both countries’ economies.

In a speech in Addis Ababa, where the company formally signed an agreement to provide services in Ethiopia, the President said the deal is part of “our cherished journey for mutual prosperity”.

“Today’s event builds on mutual commitments made by our respective governments,” the President said, referring to a March 2019 visit to Ethiopia, as well as a 2012 Special Status Agreement.

They both encourage investments into the territories and improved relations through cross-border trade, tourism, energy, infrastructure and culture, under a safer environment.

“It is a fact that in reality, we are not two peoples but rather one people connected by history, culture, development aspirations, and many more.”

Read: Safaricom unveils its entry plan into Ethiopia 

Also read: Kenyan firms eye Ethiopia as new investment hub

The President spoke after witnessing the signing of an operational agreement between the Global Partnership for Ethiopia Consortium and the Ethiopian government.

With a majority stake by Safaricom, the consortium includes Vodafone and Vodacom, UK’s CDC Group and Japan’s Sumitomo Corporation.

The official award of the licence and the formal signing of an agreement mean Safaricom and its partners can start rolling out telecom services, becoming the first foreign entity to provide such services in Ethiopia.

It also means that business ties between the countries will continue, even as Ethiopia fights global pressure to address a humanitarian situation in Tigray, north of the country where national forces have been pursuing the Tigray People’s Liberation Front (TPLF).

Read: UN report claims Somali troops ‘fought’ in Tigray war

Ethiopian Prime Minister Abiy Ahmed described the occasion as “a monumental moment for Ethiopia”.

President Kenyatta, who was accompanied by Foreign Affairs Cabinet Secretaries Raychelle Omamo (Foreign Affairs) and Joe Mucheru of ICT, could see another nut on commercial relations between the two countries fixed.

The consortium won and Sh91.8 billion ($850 million) licence bid to operate in Ethiopia, defeating MTN of Mauritius who bid $600 million (Sh64.7 billion). It has offered to invest $8 billion in Ethiopia over the coming 10 years.

It was declared winners on May 22 and Safaricom paid up the licence fee last Wednesday, earning permission to provide services across the country.

There had been 12 prequalified firms in the bid when it was opened last November.

The licence will be valid for 15 years with a possible renewal at a fee.

Officials say formal roll-out of services should be expected early in 2022. The services will include voice, text, and data, and fixed-line telephony.

During the ceremony, President Kenyatta asked the Ethiopian government to consider allowing the entrants to operate mobile money payments, giving the success of M-Pesa in Kenya as a possible solution to tap into the unbanked.

“Mobile financial services are also key in addressing various societal disparities, in particular gender related disparities,” he said.

“Women, have particularly been empowered by these services, and are now able to participate meaningfully in the economy, alongside men.  This is an area we must devote our collective efforts as we usher in the digital economy.”

The President said the investments, as well as the continues infrastructure establishment, including border crossings and the Lamu port, will help improve the two countries’ relations beyond their traditional security cooperation to trade.

On Tuesday, the Moyale one-stop-border crossing formally opened to the public, becoming the first formal border point between the two countries where immigration, customs and security checks are done under one roof to improve efficiency.   BY DAILY NATION