Why Uganda says telecoms operators must list on local bourse

KAMPALA (Reuters) – Uganda has ordered telecoms operators in the country to list on the local bourse, part of a move to encourage local ownership of the sector, the regulator said on Wednesday.

The country’s operators, which are nearly all foreign-owned, have been given two years to list at least 20% of their shares. Firms include a local unit of South Africa’s telecoms giant MTN Group and a subsidiary of India’s Bharti Airtel.

President Yoweri Museveni has said the move could conserve the country’s scarce foreign exchange as a portion of the firms’ dividend payouts would remain in the country.

Ibrahim Bbosa, spokesman for the regulator Uganda Communications Commission (UCC), said they are now using a new licensing policy and existing operators would be issued with fresh licences with new conditions.

“In 60 days we want to have issued new licenses and then two years from then all the players should have listed at least 20% of their shares on the Uganda Stock Exchange (USE),” he said.

Under the new conditions, companies will have to share infrastructure such as fibre optic cables, which the regulator says will eliminate duplication and lower the cost of the internet and other services.

Uganda’s information and telecommunications sector has expanded rapidly over the last decade, fuelled by favourable policies and a young population hungry for online services.

The sector’s potential has drawn interest from American giants Google and Facebook who have both laid cables in the country.

Statistics from UCC show the country of 43 million now boasts an estimated 24 million mobile subscribers and 21.6 million internet users.

Bbosa said some telecoms firms were worried the local bourse might not be able to absorb a large volume of shares so rapidly.

“We told them they should discuss that with the exchange and see whether there’s a solution for that,” he said.

MTN Uganda has previously indicated it would prefer to sell a stake directly to a local pensions fund to meet local ownership demands rather than having to list shares.

USE is a small bourse of 18 companies and had its most recent listing in September last year after going six years without a single IPO.

“Considering especially MTN and Airtel are highly profitable companies … they would draw more than sufficient interest from both retail and institutional investors in an IPO,” said Enock Twinoburyo, a Ugandan economist based in Kigali, Rwanda.

Reporting by Elias Biryabarema; Editing by Omar Mohammed and Alexandra Hudson

Related Content

Ethiopia deploys military as Hachalu Hundessa protests turn deadly

Ethiopia continues to suffer unrest after the killing of a popular musician on Monday sparked protests that have claimed over 80 lives. Political and Economic Analyst, Mikael Arage joins CNBC Africa for more.

Tanzania reaches middle income status

Tanzanian President John Magufuli yesterday tweets about the country’s World Bank middle income status; the Bank of Tanzania’s monthly review for May shows promise for exports and optimism for a speedy economic recovery post Covid-19. Bankable Partner, Ivan Tarimo joins CNBC Africa for more.

COVID-19: How the disruption in global supply chains is impacting FDI in developing countries

COVID-19 has not only been a health crisis but also an economic one. With supply chains distorted and massive capital flight experienced the economic effects for many African countries is massive, Richard Bolwijn, Head of Investment Research, Division on Investment & Enterprise United Nations Conference on Trade and Development, UNCTAD joins CNBC Africa for more.

Kenya looks to protect key sectors & firms in Kenya-US FTA negotiations

Kenya looks to protect key firms and sectors in Kenya-US Free Trade Agreement negotiations; President Kenyatta hints at the country's inter-county lock-down being lifted and the Central Bank of Kenya predicts a strong economic recovery post-pandemic. These are the stories making headlines in Kenya, and CNBC Africa spoke to Journalist, Joseph Bonyo for more.

Subscribe to our newsletter

Sign up for free newsletters and get more CNBC AFRICA delivered to your inbox

More from CNBC Africa

Kenya announces phased re-opening of the country from coronavirus lockdown

NAIROBI (Reuters) - Kenya’s President Uhuru Kenyatta announced on Monday a phased re-opening of the country from a lockdown imposed to curb...

Australia’s Prospect Resources picks advisor for sale of Zimbabwe lithium mine

HARARE (Reuters) - Australian-listed Prospect Resources said on Monday it had picked Renaissance Securities Capital as its exclusive financial advisor for the...

This crowdfunding initiative is helping vulnerable Lagosians during COVID-19

A new private sector-led initiative is looking to crowd source funds from Nigerians to help about two million Lagosians whose livelihoods have been severely impacted by the Covid-19 pandemic. Yomi Adedeji, CEO of Softcom and Convener of the HelpNow Initiative joins CNBC Africa for more.

How COVID-19 has impacted the progress of Dangote Refinery

Despite the Covid-19 pandemic, work is still on-going at the 650 000 barrels per day Dangote Refinery, which is expected to be commissioned in January next year. The company’s Group Executive Director Devakumar Edwin joins CNBC Africa to share some insight on the progress.

Partner Content

Maktech’s Godwin Makyao: Now Is A Time of Entrepreneurial Opportunity in East Africa

As an executive decision-maker in both the telecommunications and tourism industries, Godwin Makyao could not have experienced a more diverse set of...

Sanlam launches urgent job-preservation initiative in response to COVID-19

Sanlam Investments is responding to the COVID-19 pandemic through large-scale support of the recovery of South African companies, from small enterprises to...

Trending Now

Morocco’s economy to contract 13.8% in Q2, 4.6% in Q3 – planning agency

Rabat (Reuters) - Morocco’s economy is expected to contract by 13.8% in the second quarter under the impact of the coronavirus lockdown,...

What’s Next For The U.S. Economy: Gary Shilling

Financial analyst Gary Shilling says the stock market could be set for a big pullback similar to the decline in the 1930s during the Great Depression. He explains how the coronavirus pandemic will result in long-term structural changes in the economy

Nigerian equities dip further

The NSE All Share Index was the lone laggard among the African bourses last week shedding 1.99 per cent. What can we expect from the Lagos bourse this week? Ayodeji Ebo, Managing Director of Afrinvest Securities joins CNBC Africa for more....

Naira Outlook: CBN working on gradual unification of exchange rates

No doubt Nigeria's currency has come under pressure in recent months; the Central Bank of Nigeria says it is working towards the gradual unification of exchange rates. But what does the CBN's recent move in asking lenders to bid for dollars at 5 per cent above the official rate mean for the markets going forward? Victor Aluyi, Head of Portfolio Management at Comercio Partners joins CNBC Africa for more.
- Advertisement -