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Safaricom evacuates staff from Ethiopia amid war

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Demonstrators take part in a rally in Addis Ababa, Ethiopia, on November 7, 2021, in support of the national defense forces. PHOTO | EDUARDO SOTERAS | AFP

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Summary

  • Safaricom, whose consortium aims to start operations in Ethiopia next year, got the employees out of the country on Wednesday and Friday.
  • The telco has seconded its staff to run Ethiopia operations for products and network development that will help it gain market share that is in the hands of State-owned Ethio Telecom.
  • Prime Minister Abiy Ahmed’s government, which has been embroiled in a year-long war against the Tigrayan forces, has promised to keep fighting despite calls for a ceasefire.

Safaricom #ticker:SCOM has evacuated some of its employees from Ethiopia because of armed conflict and civil unrest in what could disrupt the firm’s operations in the populous nation.

Safaricom, whose consortium aims to start operations in Ethiopia next year, got the employees out of the country on Wednesday and Friday.

A number of nations, including the United States, Denmark and Italy, have asked their citizens in Ethiopia to leave while commercial flights were still available, as Tigrayan rebel forces and their allies advanced towards the capital Addis Ababa.

Prime Minister Abiy Ahmed’s government, which has been embroiled in a year-long war against the Tigrayan forces, has promised to keep fighting despite calls for a ceasefire from African nations, Western states and the UN Security Council.

"All our staff are safe. A number have been evacuated from Ethiopia on a temporary basis whilst we assess the situation," said a top official at Safaricom, who sought anonymity.

Separate sources told the Business Daily that the Safaricom staff were evacuated to Nairobi via commercial flights in batches.

"They were evacuated on Wednesday and others on Friday last week," said another source based in Addis. Safaricom has not publicly commented on the impact of the conflict on its operations in Ethiopia.

The telco has seconded its staff to run Ethiopia operations for products and network development that will help it gain market share that is in the hands of State-owned Ethio Telecom.

The firm, which alongside other partners is seeking to start operations next year, will then gradually reduce Kenyan expertise and build the local workforce as the business grows.

Safaricom’s operations in the Horn of Africa country will be through an operating company that will have its own CEO and a full management team.

It appointed Vodacom DRC managing director Anwar Soussa as the boss of the new telco in Ethiopia effective July 1, 2021.

The 12-member management team has four Kenyans, including Charles Wanjohi (chief consumer business officer), Stanley Njoroge (chief finance officer), Mokaya Mokaya (chief human resource officer) and Paul Kavavu (chief financial services officer).

"Incidents of civil unrest and ethnic violence are occurring without warning. The situation may escalate further and may cause supply chain shortages, communications blackouts, and travel disruptions," the US Embassy said on its website.

Municipal authorities in Addis Ababa ordered residents who own firearms to register their weapons this week to bolster defences in case the city is attacked.

Addis Ababa has registered more than 10,000 weapons, Yonas Zewde, a spokesperson for the city administration, told state broadcaster EBC on Saturday.

Abiy’s government declared a national state of emergency last week, saying it was locked in an "existential war" with forces from the northern Tigray region and their allies.

The conflict in the north of Ethiopia started a year ago when forces loyal to the Tigray People’s Liberation Front (TPLF) seized military bases in the Tigray region. In response, Abiy sent troops, who initially drove the TPLF out of the regional capital but have faced a sharp reversal since June this year.

The TPLF and their allies told Reuters last week they were now in the town of Kemise in Amhara state, 325 km from the capital.

The government accuses the group of exaggerating its territorial gains.

The conflict has killed thousands of people, forced more than two million more from their homes and left 400,000 people in Tigray facing famine.

Social media companies Facebook and Twitter have taken action to limit what they call violations of their policies by Ethiopian accounts, including removing a post by Abiy’s official Facebook account.

The war is threatening the stability of Ethiopia, Africa’s second-most populous country seen by Kenyan major companies, including Safaricom, as a promising frontier for investment.

The conflict has kept investors on edge, even as it triggered a hunger crisis, leaving millions of people in need of humanitarian aid.

The Safaricom consortium, which also includes British development finance agency CDC Group and Japan’s Sumitomo Corporation, won the licence with a bid of $850 million (Sh91.75 billion) and aims to start operations in Ethiopia next year.

Ethiopia’s award of a new telecoms licence paves the way to open the market of more than 110 million people to international investors for the first time, a key part of Prime Minister Abiy’s economic strategy.

The licence has been awarded for an initial period of 15 years. Safaricom owns a majority stake in the consortium.

The government is also looking to sell a minority stake in the State monopoly Ethio Telecom.

The transactions are part of economic liberalisation policies by a country which is seen as presenting major growth opportunities.

Players like Safaricom are attracted by the growth potential in that market whose 110 million people means the country offers a penetration rate of 46 percent.

By contrast, Kenya’s 52.2 million mobile phone subscribers give it penetration of 118 percent.

Safaricom is betting that the Ethiopian market will open up further in the coming days to allow for a mobile money licence.

Ethiopia has indicated that it will allow a mobile money licence in about 12 months, a development that has excited Safaricom.

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