When will MTN sell shares to Ugandans?

By Kavuma-Kaggwa

MTN makes huge amounts of revenue from Uganda annually and almost the whole of it goes to South Africa

The giant telecom MTN of South Africa recently marked 14 years of operation in Uganda. In a congratulatory message on the occasion, the MTN Board Chairman, Charles Mbire, said he was  “ proud to be  associated with a company  and brand  that has brought employment to thousands  of  Ugandans and  has  and remains  the biggest tax payer in the country, making  it a top  corporate citizen that has  continuously been selected as the most respected company in Uganda by  the Price-Waterhouse East Africa survey”.

According to a New Vision Oct.29 article, he thanked the government and the people of Uganda for their continued support.  He said – “We shall endeavor to continue bringing better communication services to the country to contribute to the development of Uganda”.

All that is good; paying taxes, offering employment and bringing better communication services to the country. But there is one extremely important factor to the ordinary people of Uganda which MTN has all along completely ignored and does not seem to care about for all these 14 years they have operated in Uganda.

MTN has refused to sell shares to the people of Uganda as it is in Tanzania and South Africa where MTN is quoted on the Dar es Salaam stock exchange, and Johannesburg stock exchange respectively.

The people of Uganda are asking one very important question – when will the telecom giant MTN sell shares to the people of Uganda? Why is it that they have not done so in the last 14 years of their operations in Uganda?  Why is it that President Yower Museveni, the government and the Uganda Capital Market Authority have not forced them to sell shares to the people of Uganda?  We need a clear answer from Mr. Mbiire to these questions, if possible before the end of the year.

Some of our Members of Parliament who understand the economic importance of stocks and shares should bring up this matter for a serious debate in Parliament instead of being complacent all the time.

MTN is a South African Telecommunication company which has been operating in Uganda for 14 years and makes huge amounts of revenue from Uganda annually and almost the whole of it goes to South Africa.  If we get it listed on the Uganda Stock Exchange then Ugandans will earn dividends every year.  The Initial Public Offer (IPO) should be between 20 to 50 shillings per share so that the ordinary people buy very many shares.

I remember in 2009 MTN wanted a big amount of money – US$100 million- to enable it “expand its operations in Uganda” and MTN acquired that money from a number of banks in form of a loan instead of raising that money through floating shares on the stock exchange.

My major interest here is for the people in the villages to know the importance of buying or owning shares in a big company.

Buying shares on an IPO (Initial Public Offer) or on secondary market, the buyer becomes a part owner of that company so that he or she has that attachment to the company unlike other means of raising capital by the company, in form of bonds or loan facilities.

Those who give you money through bonds and loans are creditors to the company and their interest to the company is as far as the credit they have given to the company and no more.

If MTN provided an IPO to the public there will be that bond and a win-win situation to the company and the public who buy a stake in the company through the IPO.

The Government of Uganda, as well as the Uganda Investment Authority and Capital Markets Authority, when negotiating with these investors at the initial stages, should incorporate a clause in the Agreement, for long term public interests. (In case of MTN and all foreign telecom companies, listing on the local bourse was part of the deal –editor).

The investors should know it right from the beginning that at one time, after operating for two or three years, that company will have to open an IPO so that the people buy shares in that company.

Recently President Museveni announced that within the next 50 years Uganda will be among “the first world countries”. Uganda cannot be a “first world country” if the citizens are not given the opportunity to buy shares in big companies like MTN.

Kavuma-Kaggwa is an elder from Kyaggwe