(Ecofin Agency) – According to the Zimbabwe Independent, the Zimbabwean government has taken control of the mobile operator Telecel. The state bought a 60% share in the company VimpelCom for $40 million. The acquisition was carried out by the public company ZARNET, ISP, which has received financial support from the National Social Security Authority (NSSA).
The terms of the agreement between ZARNET and NSSA included a repayable loan over 10 years at 7% interest per year, with a two-year moratorium. If ZARNET fails to meet its commitments on time, the 60% share of VimpelCom that was acquired by the Zimbabwean government, will go directly to the NSSA. The Zimbabwean government had been asking the Telecom Group to comply with its indigenization law (which does not allow foreign investors own more than half of a company in the country). Through this acquisition, the Zimbabwe government once and for all put an end to its feud with VimpelCom about this law.
This acquisition puts an end to VimpelCom’s presence in Africa. In October 2014, the Amsterdam-based Telecom group had already sold its subsidiaries in Central and Econet Wireless Burundi. Zimbabwe remained the last market where it planned to stay. However, the strife with the government in March 2014, about the cancellation of its telecom license for failure of pattern renewal, led to a series of sanctions that undermined the sustainability of the company in the country. Some local telecom players have analyzed the woes of Telecel Zimbabwe as manifestations of the government’s desire to monopolize the business.
It is also possible that the government is trying to purchase the 40% share that is held by local investors via the vehicle Empowerment Corporation
