Ethiopia: Commentary - Beyond Safaricom: Foreign Direct Investment, Diversity and Miscalculated Decisions

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Beyond Safaricom - Foreign Direct Investment, Diversity and Miscalculated Decisions addisstandard: Ethiopia

Addis Abeba — No sooner than when Safaricom arrived in Addis Abeba did it encounter turbulence. It seems Safaricom's managers did not consider the differences between the business environments in Ethiopia and Kenya.

In this piece, I will argue that the Safaricom incident is just the tip of the iceberg. I will begin by highlighting the Safaricom incident and then proceed to deeper policy issues regarding the privatization of public enterprises, specifically that of Ethio-telecom.Safaricom managers apparently sought assistance from local business entities for conducting preliminary tasks in terms of recruitment and the overall process of setting up shop.

The public relations campaign proved to be as troublesome as the recruitment process. It is a known fact that Ethiopia is a multilingual country, nominally and legally, Amharic is the federal working language, but the largest proportion of Ethiopians by far are Afaan Oromo speakers.

Eventually, Safaricom did come to the realization that they shot themselves in the foot. On the 16th of August, 2022, the companythe following:"We met with representatives of a recent social media campaign, yesterday, and listened closely to their concerns. We assured them that we are building a company that represents all of Ethiopia without any biases or prejudice and are available for discussions anytime.

For instance, the persistent Oromo protests, which ended up with ousting by the Ethiopian People's Revolutionary Democratic Front government in 2018, were essentially fuelled by the eviction of hundreds of thousands of Oromo farmers from their ancestral lands in and around Addis Ababa. In the course of the social movement, a good number of foreign companies have gone bankrupt.

 

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