A civil society organisation, The Uganda Debt Network (UDN), has urged the government of Uganda to increase its stake in MTN Uganda from the current 5 percent instead of selling out the same.
“Government of Uganda should increase from the 5 per cent shares, rather than sell-out her level of business investment in MTN telecom (MTN Uganda), whose net profit portfolio has been growing each financial year over the last twenty years and it appears to be the company with the highest turnover in the country,” UND said in its latest update, adding that in some cases, the public sector should be leveraged over the private sector actors.
UND pointed out Kenya Government’s 30 per cent investment in Safaricom, saying it enables the country with dividend that becomes key input into national budget, further stating this should be studied in context of Uganda. “Other lessons from India, China government or elsewhere could draw inspiration for Uganda,” the brief said.
“How much would government of Uganda have generated over the last decade if it had a stake of about 30 per cent? Moreover, an initial public offer by the MTN would attract hundreds of institutional and individual retail actors including the current portfolio of data service users, mobile money agents, dealers and other subscribers (already in millions). The learning therein would be used by other companies,” the brief continued.
Basing on the above, UND said the Bretton Woods policies that were imposed on Uganda in 1980s through the 1990s require reconsideration. “A number of these policies are not only outdated but also been proven ineffective and harmful in many countries,” it said.
UDN said a new approach to “structural reform” is necessary, where labour markets, trade and privatization policies do not impede, but strengthen efforts to reduce inequality, poverty and gender inequities and spur growth.
“Government cannot just be a spectator in direct revenue generation modalities and simply a tax collector. For that reason, a policy-shift of modest Government co- (investment) should be placed in direct revenue generation entities that are also strategic to improving the country’s competitiveness,” it said.
UND’s recommendation comes at the time when MTN Uganda and government are is involved in a commercial dispute relating to revenue earned by the company and renewal of its licence for the next 10 years. Government recently deported the company’s senior staff on for allegedly comprising Uganda’s national security.