MTN Uganda CEO deported, what you need to know

PUBLISHED: Fri, 15 Feb 2019 13:03:33 GMT

By Jared Jeffery, Political analyst, NKC African Economists

The CEO of South African multinational telecommunications company MTN in Uganda, Wim Vanhelleput, was deported on Thursday evening, February 14.

He becomes the fourth employee of the company to be deported in the last month as the government piles pressure on MTN to list on the local bourse and renegotiates its operating licence after 20 years.

Authorities have not given clear reasons for the deportations.

Prior to markets opening in Johannesburg on Friday, February 15, MTN issued a statement saying it had not been notified of the grounds for the move.

The company’s group CEO, Rob Shuter, met with President Yoweri Museveni on the sidelines of the World Economic Forum in Davos in January. Not much was revealed about what they spoke about, but The East African quoted the president as having said: “It is important that you float shares on the local stock exchange to allow for local ownership now that the licence has been renewed.”

The newspaper also reports that the presidency issued a statement on January 23 stating that the dispute over the renewal of the licence had been resolved and MTN had agreed to “spread its ownership to more Ugandans through a share placement with the National Social Security Fund”. However, this statement was not available on the State House website to confirm it and matters have clearly not been resolved.

It appears Mr Museveni is taking a leaf out of Tanzanian President John Magufuli’s book by forcing international companies to list on the stock exchange and playing hardball with the renegotiation of agreements. However, the rhetoric around events in Uganda is distinct from what we have seen in Tanzania.

MTN has been characterised as a ‘security threat’ whereas in Tanzania multinationals are characterised as greedy companies that hinder development.

These different narratives speak to the sources of legitimacy for the leaders in each country – in Tanzania Mr Magufuli gets his legitimacy from being clean and bringing development, so his enemies must be greedy and hinder that aim.

In Uganda, Mr Museveni draws his legitimacy from having brought stability and security, so his enemies must want incitement to violence and instability.

In July last year, MTN’s data centre was raided, reportedly by intelligence services, an employee was taken and held for four hours and four of its servers were disconnected. MTN subsequently laid a case of illegal intrusion against those involved, but there has been no news of the case since.

In a letter on the incident, MTN wrote: “We are yet to determine the extent of interruption to our network activities and the financial impact. It is also possible that some data have been tempered with or illegally accessed and taken from the premise (sic). The intrusion into the data was properly captured by our closed-circuit television (CCTV cameras),” – so it seems they would have solid evidence to support their case.

Local newspaper The Observer reported that one of the recent deportees, Italian Elsa Mussolini (former general manager for mobile finance services), stated that she was ejected from the country for inciting violence and funding opposition member of Parliament (MP) Robert Kyagulanyi (Bobi Wine). The funding reportedly took place during the campaign against the proposed social media tax that the MP led.

There is clearly a lot going on between MTN and the Ugandan government: licence renewals, stock exchange listings, data centre raids, opposition politician funding, incitement to violence allegations, social media and mobile money taxes, and possibly access to data on citizens.

Aggressive moves against multinationals on the continent are not a new phenomenon – MTN has had its fair share of difficulties lately in Nigeria too.

Taking on international companies makes leaders look good, at least in the eyes of some local citizens, but we also may be seeing a more regional phenomenon with Mr Magufuli’s approach emboldening his neighbours.

The events do not bode well. With Mr Museveni facing mounting challenges to his over three-decade rule in the run-up to elections in 2021, we could see more erratic policies and fiery rhetoric over the next couple years.

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