Mobile network operators in Uganda given one year to sell 20% of shares to locals

UGANDA –  Mobile phone operators in Uganda have been directed to list on the local bourse Uganda Stock Exchange (USE) within 12 months beginning June 2021.

According to authorities, listing on Uganda Stock Exchange will encourage local ownership of the telecommunications industry.

Chairperson of the Capital Markets Authority (CMA) Jacqueline Kobusingye said there was no turning back on the issue of listing after years of engagement with operators.

The chairman said despite the engagement, operators have been largely unwilling to list, however, listing is now mandatory and a prerequisite to renew operating licences.

He also noted that all telecoms were in sync with the new arrangement, saying  they had organised sufficiently for the listings, which are expected to be within a space of nine months of each other to avoid under subscription.

Under the country’s National Broadband Policy, all foreign telecommunications companies are required to list 20% of their shares on USE for Ugandans to buy.

According to the recently launched realigned CMA Strategic Development Plan for 2021 to 2025, failure to list the 20% shares will result in penalties.

According to the recently launched realigned CMA Strategic Development Plan for 2021 to 2025, failure to list the 20% shares will result in penalties.

“Under the country’s National Broadband Policy, all foreign telecommunications companies are required to list 20% of their shares on USE for Ugandans to buy”

Uganda Capital Markets Authority Chief Executive Officer  Keith Kalyegira said listings are expected to grow market capitalisation of the country’s stock exchange by US$991 million.

MTN, Uganda, Airtel Uganda, Smile Telecom Limited and Africell Uganda are among several foreign telecommunication operators trading in the country.

MTN Uganda, the country’s largest operator, did not respond to an inquiry by The Independent Uganda on when it is expected to list following the directive by CMA.

In March 2021, Kalyegira told the Finance Committee of Parliament that his organisation expects to reap non-tax revenue of US$325,474 from the listing of MTN on USE.

Initial public offering (IPO) was one of the conditions for the renewal of MTN Uganda’s operating licence.

The Uganda Securities Exchange has over the years been starved of regular listings, taking as many as 10 years without any listing. 
In 2017, Cipla, which is still the last listing, floated shares on the USE after 10 years in which Umeme had been the last listing.

The Uganda Securities Exchange has 17 listings, with at least eight cross-listings from Kenya. 

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