Airtel Tanzania issues Sh33 billion dividend to government

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.

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.