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Museveni warns telecoms on milking the economy

 

The MTN Group Chief Executive Officer Rob Shuter (left) met President Museveni in Davos yesterday. PPU PHOTO

President to MTN, ‘Float shares on local stock exchange to correct trade deficit’

Davos, Switzerland | THE INDEPENDENT | President Yoweri Museveni has said government and business leaders must have a win-win formula devoid of exploitation of the local people to avoid grievances between locals and foreign investors.

“We had issues of people cheating our taxes and under declaring calls. We bought our own machines and were able to see all this. It is important that you float shares on the local stock exchange to allow for local ownership now that the license has been renewed,” he said.

The President was today meeting the MTN Group Chief Executive Officer Rob Shuter at the sidelines of the ongoing World Economic Forum in Davos, Switzerland.

The President was particularly irked by the fact that telecom firms are milking vulnerable Ugandans by not adding value to their products but instead extending ‘talking’ services that have led to severe leakage of the country’s forex.

‘Pay attention to this issue. IT penetration in Africa can end up being a problem. If you are providing a service for people to just talk without creating wealth. Telecommunications then get dollars which they take out, leaking even the little money that the country earns from its exports. You should foresee these trade deficits. More locally owned companies should be allowed to earn money so that most of it remains here,” he said.

The President reiterated government’s commitment to ban foreign betting companies, which he says have accumulated a lot of money that is taken out of the country because of governments open policy.

“We should find smart ways of handling this and ensure that at least 70% including taxes stay in the country so that its not a point of grievances between locals and foreigners,” he said.

The President said the issue of local ownership and taxes needs to be resolved by all the operators. He said telecom companies have made it easy to pull money from the rural areas and the crucial point is how to share it with the locals.

Shuter said Uganda has only 5% share holding in MTN and that they are in the process of negotiating about disposing shares to NSSF.

He acknowledged that disguised calls that led to less taxes are a shared problem and that his company was committed to resolving this and complying with the laws of Uganda. He said they were open to any investigations to resolve the issues raised and thanked government for renewing their license.

The meeting in Davos comes two days after Ugandan police said they had deported a French national and a Rwandan employee of the MTN Uganda telecom firm, claiming they were a threat to national security.

Olivier Prentout from France and Annie Bilenge-Tabura from Rwanda had been using their positions to “compromise national security”, police spokeswoman Polly Namaye said in a statement.

“We strongly believe that the deportation of the two foreigners, who were using their employment as tools to achieve their ill motives, has enabled us (to) disrupt their intended plans of compromising our national security,” she said.

MTN’s Uganda branch said in a statement that Prentout, their marketing chief, was arrested at Entebbe airport after returning to Uganda while Tabura, who heads sales and distribution, was detained at their office in the capital Kampala.

“Both Mr Prentout and Mrs Bilenge have been deported from Uganda to their home countries, France and Rwanda respectively,” MTN said in a statement.

“MTN Uganda, together with all its employees, remains fully committed to operating within and respecting the laws of the country,” it added.

Based in South Africa, MTN is one of the largest telecom operators on the continent.

This incident is not its first brush with Ugandan authorities.

Last July, MTN said armed men claiming to be from Uganda’s Internal Security Organisation “kidnapped” two of its contractors and forced them to open up the company’s main data centre, where they made an unsuccessful attempt to access servers.

MTN Uganda said at the time that it took the “criminal incident” seriously and had reported it to the authorities, while adding it didn’t believe it was under investigation.

 

 

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