On March 14, 2019, President Yoweri Museveni met with officials of the MTN Group from the headquarters in South Africa led by the Group CEO Rob Shuter, MTN Vice President for South Africa and East Africa Ebenezer Twum, the Group Regulatory Affairs Officer Felleng Sekha and MTN Uganda Chairman Charles Mbire.
The meeting in Munyonyo, Kampala, on the sidelines of the Africa Now Summit, was the second between President Museveni and Shuter. The first being in Davos, Switzerland at the World Economic Forum a few months earlier. Mr Museveni and Shuter then sought to resolve a long-standing disagreement between the leading telecommunications company in Uganda and the Government of Uganda.
At the time of the meetings, the government had earlier deported four top MTN Uganda officials, including the CEO, Wim Vanhelleputte, a South African national amidst accusations of clandestine anti-government activity, espionage, and sabotage. Alongside Wim, the government also deported then chief marketing officer, Olivier Prentout, a Belgian national general manager for Sales and Distribution, Annie Tabura, a Rwandan national and mobile money general manager Elsa Mussolini, an Italian.
Mr Museveni months later had a change of heart on the deportation of Wim, admitting he had acted on wrong information.
Also, at the time a standoff existed between government and the company regarding operating license fees that the company had to pay. It was weeks to the expiry of the teleco’s operating licence and yet government was adamant, refusing to renew the licence. There were accusations that MTN was underdeclaring profits and call volumes.
What the President did not have a change of heart towards though, was his demands that the company float shares on the market so that Ugandans can be allowed to buy a stake. He is quoted saying to Shuter in Davos; “Local ownership is important because it helps us stem capital flight which happens when the company is fully foreign-owned. The question of repatriating 100% of your profits yet there is little value-addition and wealth creation for Ugandans which is unfair.”
Local shareholding in MTN Uganda stood at 4% and Mr Museveni, while assuring the executives that he was not fighting the company, demanded that Uganda and MTN Group should reach a ground where both parties can mutually benefit from each other. “You are providing a service but note that we want Africa to develop, you will do more business in a prosperous, not one on the periphery,” Mr Museveni is quoted, saying that MTN should not be part of the hemorrhage of Africa. “You must be part of enabling production,” he added.
“MTN is an African company and I support it. However, let us not have lopsided development, with a modern telephone system but the rest of the economy is underdeveloped. The money must saturate properly in the economy, not just in a few sectors.”
Following a series of meetings, MTN Group stated that they agreed with Mr Museveni on increasing local shareholding of MTN Uganda from 4% to 20% which would bring local ownership up by 16%.
Two year later, Ugandans now own a 15% stake of MTN Uganda. This comes after a successful completion of the MTN Initial Public Offering (IPO) which culminated into the listing of the telecom on the Uganda Securities Exchange.
The listing is a regulatory obligation of the telecom in fulfillment of its second national telecom operator licence in accordance with the national broadband policy of 2018 which sought to increase local participation in the telecom sector.
The National Social Security Fund (NSSF), where millions of Ugandans save their money is now the second largest shareholder with a 8.84 percent stake in the company.
Other shareholders include Bank of Uganda and Uganda Revenue Authority Staff schemes to mention but a few.
Experts state that local ownership in the company presents enormous opportunities for shareholders and the economy at large, key among which is profit retention in the country, which was President Museveni’s biggest argument for the listing. Local shareholders holding a 15% stake in MTN Uganda will get to enjoy dividend payouts by the telecom subject to the company’s dividend policy.
Upon listing, the company embarked on a robust sensitization campaign not seen before on the local capital markets. The listing accrued in debate on the viability of Ugandans owning shares. This debate led to MTN extending its sensitization campaign to the furthest corner of the country.
When mtn was making abnormal profits it never thought of selling shares to Uganda. Now it’s losing grip of business, with network failures and hacking in mobile money, it’s selling share Uganda such that when it finally fails Uganda shoulders the fall. Uganda should be careful on this.