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Ethio Telecom Faces Currency Shortages, Unable to Pay Debt

Ethio Telecom Faces Currency Shortages

Ethio Telecom disclosed that it is unable to undertake planned projects for the budget year or pay its debts due to hard currency shortages in the country, CEO Andualem Admassie (PhD) said. The Ethiopian telecom CEO announced this earlier this week while presenting a report on the company’s first quarter performance to the House of People’s Representatives (HPR).

At the session, MPs questioned Andualem why, at mere 15 percent, the company’s first-quarter capital expenditure fell far short of plan.

Andualem was straight in his response: “Yes, our expenditure is too low to achieve what we were supposed to. We are functioning at the barest minimum due to shortage of hard currency.”

He told MPs that, “We normally source our supplies from overseas. For that, we need hard currency. Granted the challenge is nationwide, we are not able to secure letter of credit (LC) even though documents for most of the equipment on which we have placed orders have been awaiting decision by the bank for a year or two.”

We are practically not making any purchases,” the CEO told MPs, adding that the 15 percent purchase mentioned in his report is sourcing done locally.

According to Andualem, major purchases supposed to be undertaken in the first quarter included those of UPS devices, batteries, computers, generators and other telecom equipment.

The CEO further noted that the chronic dearth of hard currency has also prevented the state-owned monopoly from repaying its debts.

EthioTelecom holds sole monopoly on telecommunication services in Ethiopia, including all mobile and internet services. According to many reports, Ethiopians pay one of the highest rates for internet and mobile services.

Source: Reporter

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