Forex shortage leaves Ethio Telecom in limbo
- Shortage expected to linger: NBE governor
Ethio Telecom, one of the largest state monopolies, has been able neither to undertake its main projects that it set out to perform during this budget year nor to pay its debts due to hard currency shortages in the country, CEO Andualem Admassie (PhD) said.
The 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.
Noting that his company is not an exception in the forex saga, he said that he did not expect the problem to be resolved in short order even though as a strategic institution, Ethio Telecom enjoys preferential treatment by the government.
In addition to forex-related issues, Andualem told MPs that his company was trying hard not to be outwitted by fraudsters who engage in illegal importing of VSATs (Very Small Aperture Terminals) and other telecom gadgets that bypass the company’s satellite network.
“We have already developed our technological capability to neutralize fraudsters’ illegal equipment like SIM boxes. Now we are able to deny service to substandard phones and any other illegal equipment. However, we have not yet been able to succeed in controlling fraudsters as they keep changing their addresses, techniques and technological devices that go parallel to our progress,” he said.
He added: “We are basically in a hide-and-seek game with fraudsters.”
He further explained that in the past two months alone, over 2.5 million phones have been registered before taking action against possible illegal practices.
Meanwhile, addressing MPs the same day, Teklewold Atnafu, governor of the National Bank of Ethiopia (NBE), declared that he does not foresee the forex shortage resolved anytime soon.