Hasanuddin Journal of International Affairs

Volume 4, No 2, August 2024

ISSN: 2774-7328 (PRINT) 2775-3336 (Online)

Ethio-Telecom Reform: An Assessment from the Perspective of

Homegrown Economic Reform and the Imperatives of Economic
Globalization

Diriba Adugna Tulu

Oromia Attorney General Bureau, Finfinne, Ethiopia
Email: [email protected]

Abstract
This article explores the Ethio-Telecom Reform within the context of the Ethiopian
government’s Homegrown Economic Reform (HGER) and the imperatives of economic
globalization. Its main objective is to analyze the extent to which the Ethio-Telecom reform
within the HGER agenda is genuinely homegrown and new by considering internal dynamics
and external influences. In order to achieve the intended aims, the article employed a
qualitative approach, which includes the analysis of existing work surveys and document
examination. To this end, the work has relied primarily on secondary data sources. The
article argues that the Ethiopian HGER, with a specific focus on the Ethio-Telecom sector
reform, reflects a mix of endogenous factors and external influences, with ongoing debates
regarding its originality and alignment with domestic priorities. Moving forward, it should
balance external support with local perspectives to avoid being perceived as a replication of
external models.
Keywords: Ethiopia, Homegrown Economic Reform (HGER), Ethio-Telecom, Deregulation,
Liberalization, Privatization, Globalization

1. INTRODUCTION
The pursuit of sustainable economic development has long been a priority for nations
worldwide, with various approaches and strategies employed to foster growth and prosperity.
One such approach that has gained prominence in recent years is the concept of homegrown
economic reform, which emphasizes the importance of domestically driven initiatives tailored
to local needs and priorities. This approach stands in contrast to externally imposed
development models and seeks to empower countries to take ownership of their economic
destinies.
In the Ethiopian context, the notion of homegrown economic reform has been a subject
of intense debate and scrutiny, particularly in light of the government’s initiatives such as the
HGER agenda. This agenda aims to address economic challenges and drive growth through
policies and reforms that are purportedly rooted in local realities and aspirations. However,
the originality of the HGER agenda as a truly homegrown initiative is under scrutiny, with
debates questioning its resemblance to standard International Monetary Fund (IMF)
programs rather than being indigenously developed.
Concerning Ethio-Telecom, Ethiopia has been the target of domestic and international
pressure to deregulate, liberalize, and privatize its telecommunications sector, but until
recently, it has maintained a highly centralized, vertically integrated, single service provider
form of state monopoly. However, Communications Service Proclamation No. 1148/2019, a
historic bill that deregulated, liberalized, and privatized Ethiopia’s telecom industry and
opened the door for both domestic and foreign businesses to invest in one of the world’s last
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state-controlled telecom markets, was passed by the Ethiopian House of Representatives in

2019.
Against this background, this article delves into the complexities of homegrown
economic reform in Ethiopia, with a specific focus on the Ethio-Telecom sector and its recent
reforms. By examining the various perspectives, debates, and assessments surrounding
homegrown development, this article aims to provide insights into the potential impact of
locally driven initiatives on economic transformation and sustainable growth. To do this, the
article employed a qualitative assessment of the Ethio-Telecom reform within the broader
framework of the HGER program, analyzing various viewpoints, arguments, and external
influences to provide a comprehensive evaluation of the reforms efforts in Ethiopia’s
telecommunications sector.
The structure of this article goes in the following manner: Following this first section, the
second section of the discussion try to conceptualize homegrown development and assess
the extent to which the HGER agenda is genuinely homegrown and new. The third section
discusses the historical background of Ethio-Telecom reform and its elements, as well as
navigating external oversight of the conditionalities of International Financial Institutions (IFIs)
and Ethio-Telecom Reform. Further, this section examines the extent to which the HGER
agenda is indeed homegrown within the context of Ethio-Telecom Reform. As usual, the
article ends with a conclusion and recommendations.

2. ANALITICAL FRAMEWORK
a. Conceptualizing Homegrown Development
Underdeveloped countries are showing that externally driven development models are
not effective in promoting socioeconomic progress (Morgan, J., Lambe, W., & Freyer, A.,
2009). Instead, homegrown development—an endogenously generated strategy that
integrates basic development principles with local characteristics and imperatives—is needed
(Agupusi, P., 2012).
Homegrown development can be defined differently by different individuals. First,
Easterly,W. (2006), a prominent scholar, advocates for homegrown initiatives, criticizing the
World Bank’s ‘one-size-fits-all’ approach. He argues that homegrown development, based on
the dynamism of individuals and firms in free markets, can lift countries from poverty in the
long run. Easterly cites the four Asian Tigers as examples of successful homegrown
strategies. However, he does not define Homegrown Development (HGD) but suggests it
involves self-reliant exploratory efforts and borrowing ideas, institutions, and technology from
the West when necessary.
Second, Morgan, J., Lambe, W., & Freyer, A (2009) also discuss rural America’s
adoption of a homegrown strategy to address global economic uncertainty. They define
homegrown as an alternative to industrial recruitment, focusing on local assets rather than
external investment. Growing from within provides a foundation for building local assets. The
Organisation for Economic Co-operation and Development (OECD) Policy Insight
perspective suggests that homegrown solutions can only be produced from locally generated
and context-specific knowledge and policies (Datta, A. & Young, J., 2011). However, the
authors do not provide a qualitative description or conceptual analysis of homegrown
development.
Third, Stiglitz, J.E.(1998), a renowned economist and Nobel laureate, advocated for
homegrown development as a solution to economic problems. He criticized the Washington
Consensus for its narrow focus on Gross Domestic Product (GDP) growth and universal
technical solutions. Stiglitz proposed a new paradigm for development, inclusive economic
development, emphasizing broader participation and a shift from the Washington Consensus.
Fourth, according to Rahman, M.M. (2012), homegrown development strategy “is the
people’s analysis of development, strengthened through parliament’s direct involvement and
con-text-specific policies, without donor intrusion or loan conditionality.”

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It has been evident from the above that different people may define homegrown
development in different ways. Morgan’s et al definition emphasizes leveraging local assets
with external investment, while Datta and Young focus on local knowledge generation and
development policy. Stiglitz emphasizes inclusiveness and a participatory nature. Easterly
suggests self-reliant exploratory efforts and Western adaptation from local entrepreneurs,
while Rahman emphasizes national parliaments and the absence of loan conditionality from
international lending agencies. In general, this approach is a work in progress, but its exact
meaning and implications remain unclear.
Ethiopia’s HGER was launched under the administration of Prime Minister Abiy Ahmed
in 2019. This reform program aims to unlock the country’s development potential and propel
Ethiopia into becoming an African icon of prosperity by 2030 (Mihretu, M., 2020). The
program aims to overcome structural and institutional hurdles through macroeconomic,
structural, and sectoral reforms. The ultimate goal is to propel Ethiopia towards sustainable
growth, create jobs, maintain economic stability, reduce poverty, and create a path to
prosperity in line with global economic trends (Lemu, A. A., 2019).
The ten-year plan of Ethiopia (2021-2030) boldly uses the term homegrown but its exact
meaning and implications are not explicitly stated (Wazza, M.T., 2022). According to the
Planning and Development Commission (2020), the rapid growth was primarily driven by
aggregate demand and government-funded infrastructure developments, which were
financed through debt and external aid. Thus, it is unclear how the vague homegrown can
quickly remove such significant fundamental issues (Wazza, M.T., 2022).
In the context of the above discussions, homegrown development refers to policies and
reforms that are primarily driven by domestic actors based on local needs and priorities. It
signifies a sense of ownership and autonomy in decision-making processes that are not
solely dictated by external influences but rather reflect indigenous perspectives and
aspirations.

b. Ethiopian Homegrown Economic Reform: To what extent is it Homegrown and New?

In the 1980s, during the Derg regime, there was an emphasis on reducing dependency
on foreign countries and promoting self-sufficiency (Wazza, M.T., 2022). One of the
components of this self-sufficiency was the encouragement to wear domestically
manufactured kaki dresses and consume domestic products (Lemu, A. A., 2019). After three
decades and a half, however, under the Prosperity Party, the idea of homegrown came back.
Hitherto, this suggests that history is about to repeat itself in Ethiopia.
Remarkably, even though the Ethiopian government’s HGER aims to tackle economic
issues over the past decade, there are fierce debates as to what extent these reforms are
homegrown and new. Geda, A. (2019) argues that the policy doesn’t appear as genuinely
homegrown as claimed. Instead, it closely resembles a typical IMF program for re-forming
developing countries. The policy seems to have been copied from IMF templates. According
to Geda, A (2019), the starting point for any homegrown policy should be a deep under-
standing of the real economic problems within the country. However, Geda, A (2019)
believes that the diagnosis in this policy is based on IMF templates rather than addressing
the actual issues on the ground. In the same vein, Samaro, Z. (2019) also criticizes the
HGER government initiative as neither homegrown nor a path to prosperity, arguing that it
shares similarities with the disastrous structural adjustment programs (SAPs) imposed on
African countries in the 1980s by international institutions like the World Bank and IMF.
These programs included fiscal austerity, liberalization of external trade, investment, and
finance, deregulation, devaluation, and privatization of state-owned enterprises. He suggests
focusing on identifying homegrown ideas instead of imported ones (Samaro, Z., 2019).
Conversely, Brook Taye, the then Senior Advisor at the Ministry of Finance, argues that
Ethiopian HGER is based on a pragmatic approach and has an inward-looking agenda
(Fikade, B., 2019). Taye advocates for a pragmatic approach to Ethiopia’s issues, focusing

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on the country’s current needs rather than prescribing specific principles, which he believes
will resolve issues and enhance the country’s economic situation (Fikade, B., 2019).
Despite the government of Ethiopia’s claims that HGERs are homegrown, this is not
entirely true. While Ethiopian HGER exhibits elements of both endogenous development and
external influences, a balanced approach that combines local ownership with external
expertise can maximize the reform’s impact and relevance. By fostering collaboration,
innovation, and inclusivity, Ethiopia can navigate the complexities of economic reform
effectively and achieve sustainable development outcomes that reflect a harmonious mix of
homegrown solutions and global insights.

3. RESULT AND DISCUSSION

a. Historical Background of Ethio-Telecom Reform in Ethiopia
Ethiopia’s telecommunications industry has a rich history that dates back to the late
19th century.
Early Beginnings (1894-1942 G.C.): Telecommunications service was introduced in
Ethiopia by Emperor Menelik II in 1894 when the construction of the telephone line from
Harar to the capital city, Addis Ababa, began (Tewodros, W. W., 2014). The interurban
network expanded in various directions from the capital, connecting important centers within
the empire. Operators at intermediate stations acted as verbal human repeaters, facilitating
long-distance communication (https://www.ethiotelecom.et/history/).
Post-Ethio-Italy War Restoration (1942–1952 G.C.): After the Italians’ left Ethiopia, the
reestablished Ministry of Post, Telegraph, and Telephone (PTT) took over telephone,
telegraph, and radio communications. The network was rehabilitated across the entire
country during this period (https://www.ethiotelecom.et/history/).
Under the Imperial Regime (1952-1975 G.C.): The Imperial Board of
Telecommunications of Ethiopia (IBTE) was established in 1952. Its purpose was to
rehabilitate, extend, repair, and maintain the country’s telecommunication facilities. During
this time, Ethiopia looked after operational matters in central Ethiopia, and a dedicated
regional office was created in Addis Ababa (https://www.ethiotelecom.et/history/).
Dergue Regime(1975-1996 G.C.): Under the Dergue regime, Ethiopian
telecommunications underwent several name changes. In October 1975, it was renamed
“The Provisional Military Government of Socialist Ethiopia Telecommunication Services
(https://www.ethiotelecom.et/history/).” In 1976, the Ethiopian Telecommunications Authority
(ETA) Establishment Proclamation No.181/1976 was enacted, which established a monopoly
provider known as the Ethiopian Electric Power and Telecommunications Corporation
(EEPTC). This corporation held exclusive rights to provide telecommunications services in
Ethiopia during that period (Tewodros, W. W., 2014). Later, in January 1981, it became the
ETA, retaining this name until November 1996. Significant technological changes occurred
during this period, transitioning from automatic to digital technology.
Under the Federal Democratic Republic of Ethiopia (1991 G.C.-Present): Ethiopian
telecom reform began in 1996 with the establishment of ETA as an independent agency and
Ethiopian Telecommunications Corporation (ETC) as a public enterprise (Proclamation No.
49/1996). The monopoly operator has control over telecommunication services, prohibiting
the use of other technologies that bypass local networks. Private operators are not allowed to
sell or resell telecommunication services, and voice over internet protocol and call back
services are illegal in Ethiopia (Baron, D., 2010).
In 1998, the Ethiopian government amended Investment Proclamation No. 57/1996 to
allow private operators to participate in the telecommunications industry. Amended
Proclamation No. 116/1998 allowed investors to engage in partnerships with the government
in the telecommunications sector. The Ethiopian Privatization Agency invited international
investors to gain a 30% stake and management control in ETC. However, this plan was taken
off the agenda in mid-2005.

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Ethiopia’s government, following a five-year plan focusing on education, health, and

agriculture, has shifted its focus to improving telecommunication services. Ethiopia Telecom
was established on November 29, 2010, with ambitious objectives for 2015, as part of the
Growth Transformation Plan (GTP) to support Ethiopia’s steady growth (Tewodros, W. W.,
2014). Until recent years, Ethiopia remained largely disconnected in terms of communication
technologies. The sector was monopolized by the state-owned Ethio-Telecom, hindering
competition and innovation. However, efforts are being made to revolutionize connectivity
and improve access to communication services (Atinafu, L., 2024).
In October 2018, the Government of Ethiopia announced its decision to proceed with
the reform of the Ethiopian telecommunications sector. Central to the reform agenda is to
attract investment into the sector while also laying the groundwork for more competition,
which ensures improvements in service provision and the transformation of the sector. As a
result, Ethiopian Communication Service Proclamation No. 1148/2019 has been adopted by
the Ethiopian Parliament. The most important aspect of the proclamation is that it has
liberalized the sector, which has been monopolized by the government for many decades. It
allows foreign companies to engage in the provision of telecom services in Ethiopia.

b. Elements of Ethio-Telecom Reform in Ethiopia

The four key elements or components recommended in the telecommunications
reform initiatives are as follows (Feleke, B., 2014): i) privatizing the monopoly state-owned
provider; (ii) liberalizing or introducing competition; (iii) deregulating controls imposed by the
government on the operation of a market; and (iv) setting up a separate regulatory body.
These four components can be used in a variety of ways, with varying degrees of
implementation.

Privatization
Privatization is a system of introducing private capital and management into the
telecommunications sector through the sale of state companies or the award of new licenses
to private operators (Ify, I.P., 2017).
Historically, Ethio-Telecom has been the state-owned telecommunications company in
Ethiopia. It has held a monopoly over the telecom sector. However, recent HGER campaigns
aim to change this by opening up the market to private and foreign investors (Abitew, F.,
2020). Markedly, Ethio-Telecom was the first major enterprise that started privatization, with
Communication Service Proclamation No.1148/2019 establishing a new regulatory
framework for transparency and consistency. With the passage of this law, the market was
opened up to foreign communication companies for the first time. Its primary objective is to
promote high-quality, efficient, reliable, and affordable communication services across the
nation, foster a competitive market for these goals, and ensure universal access to these
services for all citizens (Proclamation No. 1148/2019). Interestingly, Ethiopia has granted
telecom licenses to private companies, including the Safaricom-Led Consortium, for $850
million, ending the state's monopoly in the sector (Al Jazeera & News Agencies, 2021). By
opening up the market, the government aims to attract foreign investment and technical
expertise, improve operational efficiency, drive innovation, and foster competition in the
telecom sector (Njenga, N & Phiri, T.K., 2021).
The debate over the privatization of Ethio-Telecom is multifaceted, with various
viewpoints and considerations. While some see it as an opportunity, others remain cautious
about the potential consequences. Ghenna, K. (2019), in an August opinion piece, opposes
the privatization of Ethio-Telecom, arguing it is unnecessary and against Ethiopia’s best
interests. He believes the government should not sell any portion of Ethio-Telecom, which is
often viewed as a cash cow, until it has built market capacity and moved beyond the direct
government monopoly. Ghenna, K. (2019), criticizes the government for not providing a clear
rationale for privatization, arguing that official justifications are insufficient. He advocates for a
balance between markets and collective deliberation.

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Oppositely, Brook Taye argues that the argument against the partial privatization of
Ethio-Telecom is unnecessary and flawed. He argues that Ethio-Telecom’s partial
privatization overlooks the primary goal of becoming the dominant player in East Africa’s
market, where the market is characterized by two operators (Fikade, B., 2019). Indeed, Ethio-
Telecom is not a cash cow, but rather a company that spends billions in hard currency on
expensive equipment and services, exacerbating the currency shortage and generating
almost no revenue in dollars despite poor services. The government is also not capable of
running complex services like modern telecom due to institutional capacity, talent retention,
technology, and knowledge (Davison, W., 2019). Henceforth, partial selling Ethio-Telecom to
private telecom companies could benefit Ethiopians and help the economy, allowing for more
modern businesses to operate.
To settle differences, policymakers must carefully consider the implications of
privatization within the Ethiopian context. A transparent and well-regulated privatization
process, coupled with safeguards to protect consumer interests and ensure equitable access
to services, can help mitigate potential risks while harnessing the benefits of private sector
participation. Additionally, mechanisms for monitoring and evaluating the impact of
privatization on service quality, affordability, and market competition are essential to ensuring
that the reform aligns with the broader goals of the HGER and contributes to sustainable
development.

Liberalization
This refers to the opening up and removal of monopolies in the economy for fair
competition among participating investors (Dires, M., 2017). Liberalization can take place via
unilateral or multilateral arrangements. Unilateral liberalization is initiated by a given country
without any external influence (Oyejide, A. & Bankole, A., 2001). On the other hand,
multilateral liberalization is when external government(s) or international institution(s) exert
pressure on a given country to reform trade or social regulations. The multilateral approach is
superior to the unilateral approach because it assists countries to lock in or sustain reforms
and enhances their predictability and stability, as well as transparency (Oyejide, A. &
Bankole, A., 2001).
For the purpose of this article, liberalization of telecommunications is defined as
increased market access in different sub-sectors by suppliers of telecommunications
services, implying the introduction of some degree of competition and modification of the
sector’s regulatory framework (Ospina,S., 2002).
As mentioned above, Ethiopia has a monopolistic telecommunication system, with
state-owned operator Ethio-Telecom managing fixed-line, mobile, and internet services.
However, recent developments have led to a shift towards telecom liberalization, aiming to
introduce competition and improve connectivity. Thus, Ethiopian Communication Service
Proclamation No.1148/2019 has been adopted by the Ethiopian Parliament. The
proclamation has liberalized the telecom sector, which has been monopolized by the
government for decades. Article 54 of Proclamation No.1148/2019, which has far-reaching
implications for the telecom sector: “The telecom sector should be open without limitation to
private investors, including both domestic and foreign investors.” This means that foreign
companies can now engage in the provision of telecom services in Ethiopia, marking a
significant shift in the industry landscape (Directive No. 8/2020).
In May 2021, Ethiopia’s telecommunications regulator awarded the country’s first
private-use license in the sector, signaling a shift towards liberalization (Telecom Review
Africa.com, 2021). Two new telecom licenses were issued, allowing private companies to
establish and operate networks (Al Jazeera & News Agencies, 2021). Speaking at the license
agreement signing ceremony between Ethiopia and the Global Partnership for Ethiopia,
Prime Minister Abiy Ahmed stated that the liberalization of the telecom sector will positively
impact every sector of the economy (New Business Ethiopia, 2021). He highlights that this
liberalization will encourage multiple operators to offer better services, lower prices, and

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improved connectivity. According to him, the new operators will invest in infrastructure,
expand network coverage, and introduce modern technologies, benefiting sectors like
agriculture, healthcare, education, and e-commerce. Further, he states that expanding
telecom services is crucial for digital inclusion, providing reliable communication networks to
rural and underserved areas. Improved connectivity will empower citizens, businesses, and
government services, enabling e-learning, telemedicine, and efficient logistics. The Ethiopian
government expects revenue from license fees, spectrum auctions, and operational fees to
be reinvested in critical infrastructure and public services. However, it also presents
challenges, such as infrastructure investment, regulatory frameworks, and effective
competition. The transition from a monopoly to a competitive market requires careful planning
and coordination (Njenga, N & Phiri, T.K., 2021).

Deregulation
Deregulation is the process of removing restrictions on prices, product standards and
types, and entry conditions (Ikpe, E. H., & Idiong, N. S., 2011). It has been introduced where
the existing regulation is thought to cause a barrier to entry into a market, thereby reducing
competition.
In the context of this article, deregulation of the telecommunications industry is defined
as the introduction of competition through private participation through clearly defined laws,
rules, and policies (Ikpe, E. H., & Idiong, N. S., 2011). Deregulating the telecom sector is an
avenue to increase the affordability, quality, and reach of telecommunication services
(Bortolotti, B., et al., 2002). Thus, it has a positive correlation with growth and development in
a developing country (Frempong, G.K. & Aturba, W.H., 2001).
As repeatedly stated above, the Ethiopian Communication Service Proclamation
No.1148/2019 is significant legislation that has significantly impacted the telecommunications
sector in Ethiopia. Prior to this proclamation, the Ethiopian telecommunications market had
been largely closed to foreign companies for nearly half a century. However, with the
passage of this law, the market was opened up to foreign communication companies for the
first time. Indeed, Ethiopia has also introduced New Investment Regulation No.474/2020,
allowing foreign companies to invest in the telecommunications sector, thereby making it
more accessible to private sector investment. As a result, Ethiopia has granted telecom
licenses to private companies, including the Safaricom-Led Consortium, for $850 million,
ending the state’s monopoly in the sector (Al Jazeera & News Agencies, 2021). Therefore,
the move towards telecom deregulation is expected to transform Ethiopia's digital landscape
and boost economic growth.

Independent Regulatory Authority

While the term regulation has many definitions, I used Ndukwe’s, E. (2005) definition
in this instance, which is the creation of an agency in the telecommunications sector with the
goal of promoting and overseeing a competitive market while also defending the interests of
consumers in compliance with laws. Ethiopia has established the Ethiopian Communications
Authority (ECA) as an independent regulatory body to regulate the telecommunications and
postal sectors of Ethiopia as per Proclamation No.1148/2019. Its primary objective is to
promote the development of high quality, efficient, reliable, and affordable communications
services in Ethiopia.
ECA’s main responsibilities include licensing and spectrum management, consumer
protection, competition regulation, infrastructure development, policy formulation, and
universal access (Proclamation No.1148/2019). It issues licenses to operators, ensures
compliance with regulations, protects consumer rights, promotes healthy competition,
encourages investment in communication infrastructure, and formulates policies to guide the
sector’s growth and technological advancements (Proclamation No.1148/2019).

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c. Navigating External Oversight: International Financial Institutions’ Conditionalities

and Ethio-Telecom Reform
Contemporary economic globalization is characterized by liberalization, deregulation,
and privatization policies aimed at integrating national economies into the global marketplace
(Kapur, R., 2023). These policies are often promoted by IFIs as part of SAPs (Faundez, J &
Tan, C. (eds.), 2010). IFIs provide financial assistance to countries undergoing economic
reforms but often attach conditionalities to ensure policy coherence and sustainability.
Typically, it sets conditionalities as part of their lending arrangements to ensure that borrower
countries implement necessary reforms to address economic vulnerabilities and improve
their policy frameworks. These conditionalities can be either ex post, imposed after the
disbursement of funds, or ex ante, required before accessing financial assistance (Faundez,
J & Tan, C. (eds.), 2010).
Ex post conditionalities are conditions imposed by IFIs after the disbursement of funds
or financial assistance (Faundez, J & Tan, C. (eds.), 2010). These conditionalities are often
tied to the achievement of specific policy targets or milestones. Conversely, ex ante
conditionalities are conditions that must be met by borrower countries before accessing
financial assistance from IFIs (Faundez, J & Tan, C.(eds.), 2010). These conditionalities are
often specified in policy documents or agreements negotiated between the borrower and the
lender.
As part of the HGER, the Ethiopian government embarked on a process of
liberalization, privatization, and regulation of key economic sectors, including
telecommunications. In doing so, it has been seeking IFIs support to implement telecom
reforms under its HGER program agenda (IMF News, 2019). As a result of this, IFIs provided
technical assistance, expertise, and financial support to aid in the restructuring of Ethiopia’s
telecom sector (IMF News, 2022). These external entities often came with their own
intentions and conditionalities, which included promoting competition, enhancing regulatory
frameworks, fostering innovation, and ensuring transparency in the sector. Chiefly, before
Ethiopia can access IFIs support (financial assistance and loans) for the implementation of
telecommunications reforms under its HGER program agenda, certain conditionalities may
need to be fulfilled.
In the first place, IFIs may set ex ante conditionalities related to regulatory framework
improvements, privatizing state-owned telecom companies, market liberalization measures,
infrastructure development, reducing barriers to entry, tariff reforms, universal access,
governance improvements, and other key areas essential for enhancing the efficiency and
competitiveness of the telecom sector. In contrast, IFIs may set ex post conditionalities that
include requirements for transparency in decision-making processes, regular reporting on
reform progress, compliance with inter-national standards, and effective governance
mechanisms to prevent corruption and mismanagement only under certain circumstances.
Significantly, Ethio-Telecom is experiencing rapid growth, with government investments
in infrastructure and regulatory reforms in recent years. Though privatization, liberalization,
and regulation have advanced in Ethiopia, the country might spur more competition and
innovation by opening up its telecom sector (Dione, O., 2021).
In my view, the Ethiopian government should navigate external oversight and
conditionalities imposed by IFIs in shaping its telecommunications reform. This involves
aligning reform initiatives with Ethiopia’s economic goals, engaging in dialogue with IFIs,
implementing reforms in a phased manner, customizing them to the local context, engaging
with stakeholders, investing in capacity building and strengthening, and safeguarding
national sovereignty. By adopting a collaborative and pragmatic approach, Ethio-Telecom
can navigate IFI conditionalities effectively while advancing Ethiopia’s HGER agenda and
contributing to the sustainable development of the telecommunications sector.

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d. Evaluation of Ethio-Telecom’s Reform within the Context of Homegrown Economic

Reform
In evaluating the extent to which the HGER agenda is indeed homegrown in Ethio-
telecom reform, it is essential to consider both internal dynamics and external influences. In
the framework for evaluating whether the reform has been homegrown, we may ask the
following questions: Did the reform originate within the country? Is the reform a result of
domestic effort or expertise? Is the reform in keeping with national traditions and cultural
values? If the answers to these questions are in the affirmative, it may be deduced that the
reform is homegrown. Contrary to this, if the conclusion of the HGER program is a result of
agenda-setting by an outside actor, it may be said to have been imposed and not
homegrown. Indeed, if the changes to institutions were a result of structural adjustment, they
are likely to have been imposed from the outside and not endogenous.
As I briefly discussed above, it’s not totally true, despite what the Ethiopian
government says, that the HGERs are domestically developed. Hence, rather than being
endogenous, it is viewed in many respects as a replica of the IMF’s reform project. The
HGER encompasses disastrous SAPs imposed on African countries in the 1980s by IFIs,
such as liberalization, deregulation, and privatization. In the Ethiopian telecom sector, which
has historically been characterized by state control and limited competition, recent reforms
have aimed to liberalize the market, partially privatize it, attract foreign investment, and
enhance service quality. This can be evidenced by the fact that the Ethiopian government
has made regulatory reforms in such a way as to privatize and liberalize the telecom sector
(Proclamation No.1148/2019).
One can argue that Ethiopia is a latecomer to the deregulation, privatization, and
liberalization of telecom, driven mostly by the need to satisfy the IFI’s prescriptions through
its SAPs to borrow loans. Because of the country’s high price inflation and increased debt
levels, the government might be forced to accept donor conditionalities. If not carried out with
great care, policies like market liberalization, deregulation, and fiscal austerity measures
might inadvertently harm regional economies and jeopardize Ethiopia’s economic
sovereignty.
To strike a balance, Ethiopia needs to adopt a comprehensive and inclusive approach
to Ethio-Telecom’s reform within the HGER framework. This includes engaging with a wide
range of stakeholders, including employees, consumers, private investors, and regulatory
bodies, to address concerns, gather feedback, and ensure transparency throughout the
reform process. Implementing robust regulatory mechanisms, monitoring performance
indicators, and evaluating the social and economic impact of the reform are essential steps to
safeguard against potential risks and maximize the benefits of the reform for Ethiopia’s
overall development goals.

4. CONCLUSION AND RECOMMENDATIONS

The Ethiopian HGER is a commendable effort to address internal economic
challenges and prioritize local ownership and autonomy in shaping development policies. It
emphasizes leveraging domestic resources, engaging local stakeholders, and tailoring
strategies to Ethiopia’s unique context. However, it is crucial to acknowledge the influence of
external factors and global economic trends on the reform agenda, specifically Ethio-
Telecom. External assistance can provide valuable insights and re-sources, but it can also be
perceived as a replication of externally imposed models. To strike a balance, Ethiopian
government must balance leveraging external support with maintaining a strong focus on
endogenous factors. By combining best practices from global experiences with locally-driven
solutions, the reform can create a robust and sustainable economic development framework
that reflects Ethiopia’s priorities and aspirations. Therefore, a balanced approach that
integrates both national interests and global economic trends will be crucial in achieving

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sustainable and inclusive growth in Ethiopia’s telecommunications sector and broader

economy.

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