Non-executive director Michael Joseph steps down after World Bank loan is finalised for expansion in Ethiopia
Michael Joseph has resigned as a director on the board of Safaricom. He was the founding CEO of Safaricom and had served in several exec roles since 2000 including as general manager, CEO, director, as well as chairman of the board.
He is also Vodafone’s strategic advisor appointed to the boards of Vodacom Group South Africa, Vodacom Tanzania and Vodacom Mozambique. Safaricom’s board indicated he had stepped down to focus on “other ventures” including his current role as chairman of Kenya Airways.
“Michael was the founding CEO of Safaricom Limited, steering the company from a subscriber base of less than 18,000 in 2000 to over 17 million subscribers by his retirement in November 2010 making it the most successful company in East Africa,” said the board in a statement. “He, together with the late Bob Collymore, launched the highly successful M-PESA Foundation Academy.”
Ethiopia in focus
Joseph was also chairman Safaricom Ethiopia which just formally concluded its agreement – announced in June – with the International Financial Corporation (IFC), a member of the World Bank Group, to make a $157.4 million equity investment in Global Partnership for Ethiopia BV (GPE) and a $100 million A-loan to its subsidiary, Safaricom Ethiopia. As a result, IFC now holds a minority position in Safaricom Ethiopia.
The loan will support the ongoing construction and operation of Safaricom Ethiopia’s greenfield telecommunications network across Ethiopia. The Multilateral Investment Guarantee Agency (MIGA) – also part of the World Bank – will provide 10-year guarantees of $1bn to cover the equity investments of Safaricom Ethiopia’s shareholders: Vodafone Group, Vodacom, Safaricom, and British International Investment.
“The progress Safaricom Ethiopia has achieved in such a short period is nothing short of remarkable,” said IFC VP of industries Mohamed Gouled, as reported in the Ethiopian Monitor. “With the highly anticipated launch of M-PESA, we are excited to witness the profound impact it will have not only on the telecommunications landscape but also on improving financial inclusion for all people across Ethiopia.”
In one of his last acts for Safaricom, Joseph said: “With IFC coming on board as an equity partner, they’re experience in global operations and the stature of their investment brings a lot of praise and respect to the board.”
The project follows more than four years of World Bank Group engagements in Ethiopia aimed at opening the telecommunications sector to private sector investment and supporting market liberalisation.
In 2020, IFC advised Ethiopia’s Ministry of Finance and the Ethiopian Communications Authority (ECA) in designing and tendering the nation’s first full-service telecom licences and associated spectrum. The licence was awarded in May 2021.
The successful IFC advisory mandate resulted in a $850m licence fee payment and will generate as much as $8bn in new investments over the next decade, making it one of the largest foreign direct investments in the country.
Ethiopia is Africa’s second most populous country, with a population of approximately 120 million. The investment and guarantees will help Safaricom Ethiopia roll out and operate 4G and 5G mobile networks across the country – including in rural and urban areas.
In May, Safaricom Ethiopia’s wholly owned subsidiary Safaricom M-PESA Mobile Financial Services received its licence from the National Bank of Ethiopia to offer mobile financial services.
The service has more than 51 million customers across seven countries in Africa, offering a safe, secure and affordable way to send and receive money, top-up airtime, make bill payments and get short-term loans. The telco plans to offer M-Pesa in the coming months.
In July, Ethiopia’s ECA has launched the tender for its second new nationwide telecommunications licence. Up to 45% of incumbent Ethio Telecom will be going up for sale as well.
Pictured: Safaricom Ethiopia interim CEO and CFO, Stanley Njoroge (left), IFC’s Mohamed Gouled (centre) and Safaricom’s Michael Joseph (right).