Dodoma — Airtel
Tanzania Plc yesterday gave Sh32.9 billion as a dividend to the
government, adhering to last year's pact between the government and
Bharti Airtel.
Last year, the
government and Bharti Airtel agreed that the latter would pay the former
Sh60 billion over a period of five years to settle an ownership
dispute.
Bharti Airtel
chairman Sunil Mittal said in June last year that Airtel would pay the
government Sh1 billion every month for sixty months starting April 2019.
He said the company would also pay the government a special dividend at
end of 2019.
The payments were
part of a January deal in which Bharti agreed to reduce its stake in
Airtel Tanzania to 51 percent from 60 percent to boost the state's
ownership of the company to 49 percent.
The dispute
emanated from a government inquiry which ruled in 2018 that
privatisation of Tanzania Telecommunications Corporation in 2005 - which
partly contributed to the formation of Celtel, later Zain before it was
acquired by Bharti Airtel in 2010 - was illegal.
Other terms of the
agreement were that the company would write off a debt of $407 million
which Tanzania owed it - and that the state would appoint the it's
chairman, a government official said.
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Out of the Sh32.9
billion that was issued to the government yesterday, Sh18.9 billion was
in the form of a dividend, while Sh14 billion was what was termed as
'the firm's contribution to Tanzania's development endeavours'.
Presenting a Sh32.9
billion dummy cheque to the Treasury Permanent Secretary, Mr Doto
James, yesterday, Airtel Tanzania Plc's board chairman, Mr Gabriel
Malata, said the telecommunications firm has managed to achieve the
requirements of the agreement between the government and Bharti Airtel
by up to 90 percent within the past few months. Airtel had a total of
13.4 million voice subscribers as of March this year, Tanzania
Communications Regulatory Authority (TCRA) figures show: meaning Airtel
had a 27 percent share of the market where eight players are battling it
out for 48.939 million active Sim cards.
Mr James said the
government was finalising a plan to up its stake in some companies,
including Udart, Keko Pharmaceutical Industries (1997) and Mecco
Construction Company.
In Udart - which
operates the Bus Rapid Transit (BRT) system in Dar es Salaam - the
government currently has a 49 percent stake, and now wants to raise it
to 85 percent.
In Keko
Pharmaceutical Industries, the government plans to raise its stake from
the current 40 percent to 70 percent, while in the Mecco Construction
company, its two percent share-holding will rise to 25.
Treasury Registrar
Athumani Mbuttuka said various initiatives undertaken by the government
in the past few years have resulted in a rise in dividends and other
contributions by companies in which the government has a stake.
He said during the
2014/15 financial year, the government collected Sh161.04 billion in the
form of dividends from companies and revenue-generating public
institutions - noting that the amount rose to Sh1.05 trillion in the
2018/19 financial year.
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