Ethiopia’s sale of two telecoms licences, billed by the government as the “deal of the century”, has flopped, dealing a blow to the push to market capitalism championed by Abiy Ahmed, the prime minister.

Two bidders put in offers for telecoms operating licences in the fast-growing but politically unstable east African country of 110m people, the biggest remaining telecoms monopoly in the world, the finance ministry said. The sale was supposed to be the centrepiece of the country’s privatisation drive.

“The telecoms bid is monumental in showing Prime Minister Abiy Ahmed has remained consistent in the past three years in his vision of driving economic growth through technology,” said Billene Seyoum, Abiy’s spokesperson.

But potential participants from Europe, the Gulf, India and China stayed away. Some complained about the opacity and restrictive nature of a process that banned new participants from offering mobile-money services or bringing in specialised telecoms tower operators to build new infrastructure.

MTN, the South African operator, and a consortium of Kenya’s Safaricom, Vodafone and Vodacom bid for licences. The amount they offered is expected to be disclosed later this month.

Other companies that had shown initial interest, including Etisalat, Orange, Saudi Telecom Company, Axian and Telkom SA, did not bid for licences that the government had said could raise billions of dollars.

As well as economic concerns associated with an overvalued currency and difficulty of repatriating profits, some potential bidders were thought to be concerned about political risk. The government is fighting a protracted conflict in the northern Tigray region and Abiy faces an election in June amid insecurity in much of the country.

Ethiopia has shown further signs of strain by asking for debt restructuring under a G20 framework to help countries battered by the Covid-19 pandemic.

“Two licences, two bidders. This is not a tender,” said one frustrated potential investor. Asked if the meagre interest showed lack of confidence in the government’s liberalisation effort, the person said: “When nobody shows up how else do you interpret it? When you refuse to write a cheque, you’re making a statement.”

The government has indicated that, if financial offers fall short of expectations, it might retender the licences. Ethiopia also plans to sell a 40 per cent stake in Ethio Telecom, the state monopoly, later this year.

Eyob Tolina, the state minister of finance, told the Financial Times last year that the sale would be very competitive. “This is going to be the deal of the century. It is the last frontier as far as telecoms is concerned,” he said.

One adviser to a potential bidder complained that the Ethiopian government had been convinced it was selling “the last Coca-Cola in the desert”. But there were doubts on the terms and conditions of the leasing of towers and also over the level of control Ethio Telecom would exert in the market even after the licences are awarded.

Under its state-led model, engineered by former leader, the late Meles Zenawi, Ethiopia racked up years of double-digit growth through heavy investment. But it was left with chronic foreign exchange shortages and a state-run banking and telecoms sector technologically far behind those of more open economies such as Kenya, South Africa and Nigeria.

“When the plans were initially announced, we saw excitement across the board. But now the radical transformation of the country’s political and economic landscape is presenting a host of uncertainties,” said Margarita Dimova, head of intelligence at strategic advisory firm Africa Practice. “Those ready to commit to a long-termist view of success, and in the short-term — to sharing infrastructure with Ethio Tel — are unsurprisingly not many.”

One company that had considered a bid but ended up pulling out said the process had been opaque with little information on vital topics such as the price for accessing infrastructure. “You’re totally blind . . . you don’t know how you will invest, how you can take your cash out, and if you will have access to the foreign currency from the central bank,” he said.