Tanzania: Airtel Soon to Go Public

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AN alleged ‘raw’ deal shrouding ownership of Airtel Tanzania Limited could soon be resolved following intervention from President John Magufuli, who has since instructed Finance and Planning Minister, Dr Philip Mpango to institute measures that would enable the government acquire its rightful shares.

The president’s move on the controversial ownership of the telecom firm comes amid mounting concerns that the deal was both ‘dubious and unfair.’ Terming the sale of the telecom’s shares ‘a raw deal’, the Head of State, said: “I want this deal to be amicably put to rest.”

This came just a day after revelation – by an English daily – that the stateowned telecom firm, TTCL, would soon lay claim to full ownership of Airtel Tanzania Limited. Available information indicates that during the privatisation of Tanzania Telecommunications Company Limited (TTCL), Celtel International was in partnership with Detecon of Germany and the two companies invested an initial $60 million into TTCL in February 2001 for a 35-per cent stake.

In the new partnership with TTCL, Celtel International agreed to be bound by independent ‘Expert Determination’ in the aftermath of a poor financial performance of TTCL. Based on this, Celtel International made an additional $4.96 million payment.

In early August 2005, Celtel Tanzania and TTCLwere legally separated, allowing each to administer its own financial and business operations. In this new (duly signed) agreement between the Tanzanian Government and Celtel Tanzania, TTCL’s shareholding structure remained unchanged, with the government of Tanzania holding 65 per cent and Celtel International the remaining 35 per cent.

 In the aftermath, Celtel Tanzania’s structure was changed so as to follow the government’s decision to sell a 25 per cent stake to Celtel International for $28 million. Commenting, a University of Dar es Salaam senior lecturer, Dr Benson Bana said a directive to the finance and planning minister should be supported by all Tanzanians.

“There have been several dubious deals perpetrated by mobile phone companies and hotels through name changes, something that casts doubts they might be trying to evade tax,” he said. Dr Bana says the President has various instruments that submit information to him and thus, the directive he issued to the minister was valid.

 Other economics pundits chose to reserve comments until the minister accomplishes his task, adding that because the issue was based on contracts and agreements, it’s time Tanzanians observed tolerance until the minister releases the outcomes of his investigations.

Dr Magufuli said that based on a report now under his custody, the telecom firm that once traded as Celtel Tanzania was fully owned by TTCL, only that its shares were changed dubiously through unfair deals. President Magufuli gave the directives in Dodoma yesterday at a ceremony to lay the foundation stone for the National Bureau of Statistics (NBS) Headquarters building, and whose construction is described as “85 per cent” ready.

The President accused some officials of ‘dirty games’ of changing/selling the shares at ‘throw away’ prices, at the expense of national interest. “The minister for finance and planning should make follow- up on this issue… I want you to make sure this deal is cleared out,” the president insisted.

He further explained that under such circumstances people who were benefiting from unfair deals would continue complaining of a “tight economy.” He also called upon the public to ignore such people – all because they were “used to earn income through illegal sources.”

He said that the country’s economy was stable, and assured that the nation “has sufficient foreign exchange reserves … worth $5.82 billion to sustain businesses for at least five months. Meanwhile, President Magufuli reminded the Ministry of Finance and Planning and Bank of Tanzania (BoT) to strengthen supervision of commercial banks and other financial institutions and the use of USD in purchase of goods and services.

Has also directed Dr Mpango to ensure that commercial banks and telecommunications firms were registered with the country’s electronic system for revenue collection before the end of this year. The President also directed other government institutions to ensure they were duly connected to the data centre for electronic revenue collection.

“… when we launched the centre in June this year I directed all institutions to use the data centre instead of each one establishing their own databases …” which might render data collection near-impossible with so “many data collection centres … unless they are used as backup,” he said.


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