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Tanzania government claims ownership of Airtel

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The management of Tanzania Telecommunication company Limited (TTCL) have started a move to repossess a local mobile firm Airtel.

This follows a directive by the country’s president John Pombe Magufuli to the finance minister to make a close follow-up on the ownership of Airtel in Tanzania.

According to Dr. Magufuli, Airtel is fully owned by the state company, arguing that there was an irregularity in switching the shares of TTCL to Airtel in 2001 when the firm was operating as Celtel Tanzania.

Speaking to journalists today, TTCL Chief Executive Officer clarified that at the moment, Airtel does not belong to TTCL.

“We want to retain our company (Airtel) of which its shares were shifted to the government many years ago ,”he emphasized

According to available information, 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 TTCL were 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 percent.

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.

Proponents of the TTCL takeover of Airtel argue that Tanzania was ‘shortchanged’ in these transactions and that Celtel’s investment wasn’t commensurate with the returns over the years.

The President accused some officials of ‘dirty games’ of changing/selling the shares at ‘throw away’ prices, at the expense of national interest.

Parliament in Tanzania recently passed a new law that saw the previously privatised TTCLrevert into a fully public owned corporation with an added role to play in the telecommunications sector.

TTCL plans to improve the company’s operations and extend services to reach remote areas. To achieve this plan, TTCL needs more funding from the government and the plan now is to do it after gaining 100% ownership.

Currently Airtel Tanzania is owned by the government of Tanzania through TTCL (40%) and Celtel Tanzania BV, an affiliate of Zain Africa BV which was acquired by Bharti Airtel International in November 2010.

Bharti Airtel recently denied rumours it was planning to exit its unprofitable markets of Kenya, Rwanda and Tanzania.

It has since entered into a definitive agreement with Millicom International Cellular S.A. to acquire 100 per cent equity stake in its Rwanda operation, Tigo Rwanda.

The acquisition is consistent with the company’s recent statement which denied the exit rumours and said ‘we are open to consolidation opportunities either through acquisitions or mergers, to create a viable business in these three (Kenya, Rwanda and Tanzania) markets.’

Operating in 15 countries across Africa, Airtel says it is committed to profitably serving its customers on the continent.

“We are also committed to the long term viability of our operations in two other countries i.e. Kenya and Tanzania, to ensure that in 2018 all our 15 operations in Africa start contributing positive margins and cash flows towards a healthy and profitable Airtel Africa,” Bharti Airtel Chairman, Sunil Bharti Mittal said.

The company is yet to issue a statement on the latest developments in Tanzania.

Business

Import route block throws Ethiopia into fuel scarcity.

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The Ethiopian capital Addis Ababa has been hit by a severe fuel shortage as at Tuesday (January 15), multiple local media outlets have reported.

Unusually long queues have been formed outside fuel stations that have supplies with many motorists waiting for hours to buy fuel. Government has yet to respond to the development.



The shortage is largely blamed on a current blockage on the road that links Ethiopia and Djibouti. Ethiopia, a regional economic giant imports most of its supplies through the Djiboutian ports.

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The blockage is staged by young people in the Afar region who are protesting against violent incidents reportedly perpetrated by an ethnic group of Somali extraction.

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The blockage was specifically in the cities of Semera and Awash with pictures showing people sitting right in the middle of the road with loaded trucks parked on either side.

A local portal said protesters were unhappy about a move that saw the federal government withdraw the region’s special forces from areas where the violence happened.

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South Africa Stands 77th in global economic freedom index.

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South Africa has been ranked 77th out of 100 world countries in economic freedom by the Heritage Foundation.



In terms of economic freedom, the Heritage Foundation indicates that with a world rank of 77/180, South Africa is 4th in the African region. The country’s over-all economic freedom score improved with 0.7 in 2017.

General Manager for Research for Brand South Africa, Dr Petrus de Kock, said the index provides some insight into dimensions of the South African economic environment as the country continues to grapple with historical challenges, and the need to spur on entrepreneurship and innovation.

“Notable improvements for South Africa in 2018 include the improvement in the area of investment freedom, and judicial effectiveness. The latter is significant coming in a year where the administration of President Ramaphosa made investment a key focal area of its work,” said de Kock.

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South Africa’s improvement in the rankings comes as a result of advancements in the areas of property rights which is up from 67.6 in 2017 to 67.7 for 2018; judicial effectiveness increased from 59.7 in 2017 to 65.9; fiscal health sees an improvement of +4.6 from 70.7 in 2017; business freedom advanced by +3.1 points from 62.0 in 2017; labour freedom improved by +1.2 in 2018 from 58.9 in 2017; and investment freedom significantly improved by +10.0 from 40.0 in 2017. Notable is South Africa ranks higher than two European nations, being – Italy (79/180), and Greece (115/180).

On the global front based on the measurements of this index, the Heritage Foundation finds that the global average economic freedom score is 61.1, the highest score since inception of the index 24 years ago.

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At an aggregate level, of the 180 economies measured by the index in 2018 – 102 scored better, while the economic freedom scores of 75 got worse. In the case of South Africa it can be noted that the country is one of the 102 that improved its economic freedom score.

Released on an annual basis by the Heritage Foundation, the Index of Economic Freedom provides insight into the extent to which governments enable an open and unrestricted economic environment for citizens and businesses to operate in.

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