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Corruption in the Telecommunications Sector in Ethiopia: A Preliminary Overview 333
no obligation to make financial information available to the public.
Such a lack of transparency can contribute to a lack of accountability
and an associated risk of corruption.
The Context: The Ethiopian Telecoms Sector
Historical Overview
Ethiopia boasts the oldest functioning telephone system in Africa. In
1894, just 17 years after the invention of the telephone, work began on
the provision of telephone and telegram communication between Addis
Ababa and Harar, a distance of some 477 kilometers. This open-wire system
was then extended to link the capital with all of the major administrative
centers in the country.
The private company responsible for this development was placed
under palace control at the beginning of the 20th century, in time falling
under the auspices of the Ministry of Post and Communications. Severe
damage to the network was sustained during the period of Italian occupation.
In 1952, telecommunications services were separated from the postal
administration and structured under the Ministry of Transport and
Communication (MTC). Supported by a combination of domestic finance
and World Bank loans, the resulting Imperial Board of Telecommunications
of Ethiopia (IBTE) had financial and administrative autonomy in fulfilling
its mandate of expanding and maintaining telecommunications facilities in
Ethiopia. In 1981, the IBTE became the Ethiopian Telecommunications
Authority (ETA), maintaining responsibility for both the regulation and
the operation of telecoms services.
With the regime change marking the end of the Derg era in 1991,
the government included telecommunications in its efforts to update
Ethiopia’s legislative environment. This resulted in a fundamental revision
to the laws and procedures relating to the telecoms sector, intended
at the time to pave the way for an eventual opening of the market to
outside investors. It also marked the beginnings of a renewed expansion
of the network. In 1996, the functions of regulation and operation
were separated through the establishment of the Ethiopian
Telecommunications Agency (ETA) as regulator and the setting up, by
the Council of Ministers, of the ETC as a government-owned telecoms
operator. The ETA became operational in 1997 with the appointment
of its general manager.
In the 10 years that followed its establishment, the ETC invested
some US$14 billion in infrastructure development. The government is