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Uganda: Museveni insists MTN must sell shares to Ugandans

President Museveni has said MTN must allow Ugandans to buy into the telecom through the stock exchange to mitigate capital flight.

The President, in a series of tweets on his Twitter handle, said it was unfair for MTN to repatriate 100 percent of its profits “yet there is little value-addition and wealth creation for Ugandans”.

“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 [per cent] of your profits yet there is little value-addition and wealth creation for Ugandans is unfair,” Mr Museveni said indicating that he had brought this to the attention of the MTN Group chief executive officer, Mr Rob Shuter on the sidelines of the World Economic Forum in Davos, Switzerland.

He said he had also advised MTN Uganda to work towards floating shares on the Uganda Stock Exchange so that Ugandans can partly own the company.

This is not the first time the President has publically spoken about telecoms listing on the stock exchange.

The President has previously indicated that it was important for telecoms to sell shares for Ugandans to share into their profits.

Telcoms are some of the most profitable companies in Uganda.
Local listing for all telecoms is outlined in the National Broadband Policy that Cabinet endorsed in September 2018.

The policy makes it mandatory for all telecoms to open up to local ownership through either private placement, public offering or listing by introduction.

This, according to government, will among others, increase tax collection due to improved transparency in public financial reporting standards, reduce pressure on the shilling against the dollar, as well as help growth of Uganda’s stock markets.

Currently, the Uganda Securities Exchange has only 17 listed companies eight of which are cross-listings from Kenya.

What MTN says

Last year, Mr Charles Mbire, the MTN Uganda chairman, said they had been considering government’s proposal and would after studying it see how best they would harmonize to ensure local ownership.

He said the process would be carefully done to avoid rewarding ‘thieves’ that would “bring in stolen money to contaminate the company”.

“I think we should reward people [by selling shares] who have toiled for their money. I am talking about people in pension funds, nurses and teachers who I trust their sources of money,” he said, noting that if the process is not carefully planned, “you will end up getting stolen money” to buy into the telecom.

The President also said, he had told Mr Shuter that telecoms should not under declare call volumes to cheat “our government of revenue”.

“We have bought machines to track these calls but it is still important that the companies do not engage in this vice,” he said.

The President has previously said that some telecoms, which he did not name, have been under-declaring call volumes with the view of paying less taxes.

By Daily Nation

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