(Bloomberg) -- Ethiopia’s parliament approved a draft law that enables foreign companies to invest in the telecommunications industry of Africa’s second-most populous nation.

The legislation establishes an independent communications regulator, accountable to the prime minister, that will be responsible for promoting competition.

Lawmakers Thursday “approved into law the Ethiopian Communication Regulatory Proclamation,” Innovation and Technology Minister Getahun Mekuria said in a tweet. “This is a huge step in reforming the telecom sector.”

Key Insights

  • The legislation is the latest in a series of sweeping reforms Prime Minister Abiy Ahmed has implemented since he became leader two years ago, as he seeks to loosen state control of the economy. He’s pledged to split the government-owned monopoly, Ethiopia Telecommunications Corp., and sell shares in the two new entities piecemeal to international operators.
  • Ethiopia offers a rare opportunity for foreign investors to access one of the continent’s biggest markets. With one of Africa’s fastest-growing economies and more than 100 million people, it’s coveted by firms including MTN Group Ltd. and Vodacom Group Ltd., the continent’s largest mobile-phone companies.
  • Vodacom unit Safaricom Plc, Kenya’s biggest company by market value, is already providing Ethiopia Telecommunications with fiber connectivity and other services. The partnership has potential to be expanded, according to Safaricom Chief Executive Officer Bob Collymore.

Get More

  • Ethiopia Premier Sees State-Asset Sales Boosting Economic Growth
  • MTN Eyes Ethiopia Entry as Country Prepares to Open Market
  • Ethiopia Draws Record Inflows in Abiy’s First Year in Office

To contact the reporters on this story: Eric Ombok in Nairobi at eombok@bloomberg.net;Renee Bonorchis in Johannesburg at rbonorchis@bloomberg.net

To contact the editors responsible for this story: David Malingha at dmalingha@bloomberg.net, Paul Richardson, Liezel Hill

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