NSSA speaks on Telecel deal: It’s about the cashflow & mobile money for pensions

L.S.M Kabweza Avatar

In an update released yesterday by Zimbabwe’s social security firm, NSSA, the chairman, Robin Vela said they had found Telecel too attractive an investment to pass over given the “nature of the entity”. The chairman said “there
are some opportunities whose timing required immediate consideration” and Telecel had been one of them.

The cashflow generation capacity of Telecel Zimbabwe to supplement NSSA’s investment income; the entry price giving protection of capital value; and the strategic nature of the entity for elements such as offering new social security products and pension payments were too compelling for the Authority to pass over even given the current cash constraints of the Authority.”

The payments infrastructure he’s referring to is no doubt the mobile operator’s Telecash mobile money service. In fact he says earlier in the report that NSSA is already looking to use mobile money to pay pensioners so that they don’t have to travel long distances to get their money at banks. NSSA however, unlike other government companies (ZESA mainly) who have rejected integrating their services with privately owned mobile operators, seems to suggest they have approached mobile operators without discrimination.

The Board also recognises the need to be innovative and also embrace/ use mobile banking/
technology to pay pensions. Mobile operators have been engaged to provide use of their platforms for the payment of benefits at pensioners’ convenience and at reasonable transaction costs. It is hoped that the engagements with the mobile operators will remove the need for pensioners to travel long distances, at great cost, to collect their pensions.

Back to the acquisition of Telecel: the chairman also disclosed more on how they had acquired NSSA as well as the current confusion on whether Vimpelcom had been paid. Essentially, Vimpelcom has indeed not received its money yet because it’s sitting in a local trust account of a legal firm. The firm has been reported to be Honey & Blanckenberg which you will probably remember to be the firm that has represented Telecel Zimbabwe on some legal matters for a while now.

On who exactly bought Telecel between NSSA and ZARnet, the chairman says it’s “a quasi-equity participation funding which gives the equity control of Telecel International Limited to NSSA until certain conditions precedent are met by ZARNet.” He clarified however that NSSA would emerge with a significant share of Telecel, in all circumstances.

NSSA paid $30 million for a 60% stake in Telecel on behalf of ZARnet, a Zimbabwe government owned internet service provider.


  1. David

    NSSA paid $30 million for a 60% stake in Telecel on behalf of ZARnet, a Zimbabwe government owned internet service provider??

    My opinion is NSSA paid for all of that stake in Telecel on behalf of Zanu Pf.
    Why should NSSA funds be used to invest in non-core operations of its existence?

    Last time they lost a lot of money when they tried to save Rennaisance (Capital Bank)


  2. Hapana Hapana

    60% stake costs $30million and the licence costs $137million I can’t get the logic it’s like buying a TV set for $30 and paying $137 licence fees who is fooling who?

  3. MacdChip

    ”….. The firm has been reported to be Honey & Blanckenberg …..”

    Why has the firm been reported to Honey & Blanckenberg(Biti)?

    Unless the money is received into Vimpelcom account, it is not sold and Vimpelcom is still the the owner!

    Let me rewind back in time, kumbodzura nekudzora ndangariro hangu:

    “Zarnet, through the Ministry, has commitment of funding from a third party approved by my principal. All I would appeal for is a commitment in writing from NSSA to finance the transaction simply so as to comply with VC’s diligence issues,” reads Mandiwanzira’s e-mail to Vela.

    “NSSA does not lend funds direct to any company. It lends to banks to on-lend to the productive sector, but under strict and limited conditions. The Telecel transaction would not qualify as such,” wrote Vela to Mandiwanzira.

    And now this Vela is singing a different song! What changed behind the closed doors?

    Either they pay or get nothing, Vimpelcom is not a company to get bullied into submission both economically and politically and they have made it very clear hence all this noise:

    ”……As of today( April 15, 2016 ), VimpelCom and Global Telecom Holdings (GTH) remain a 60 percent shareholder in Telecel and we look forward to completing the sale only after satisfaction of all customary closing conditions are met,” she said (Vimpelcom spokeswoman)

    Politically, Vimpelcom is majority owned by Russians. The same Russians who vetoed a lot of UN security sanctions which were to be imposed on Zim. The same Russians who are our all weather friends and promising $4 billion platinum investment. Is the president going to be happy when Mandiwanzira upset them?

    What l see here is $30 million sunk into a black-hole vortex which it will never come out. I see auditors being called in and investigators plus few small fish being harassed here and there by police to create a smoke screen.

  4. sillyme

    And i thot it was a done deal

  5. Supa Supa Supa

    Everything sounding very foggy as usual whenever Supa is mentioned. Lets get something clear, signing an agreement to purchase shares is not completion of a sale agreement – meeting the payment and all other requirements is the only valid completion of a sale. Telecom companies are monsters Supa. You can’t just buy a stake for $30-40 million and expect to start making profits. Telecel has a $250m plus debt which needs to be added to the $30m that VC still hasnt received to arrive at a true enterprise value of $280. This the true cost of acquiring Telecel that needs to be deducted from Telecels future profits before you can start talking of future Cashflow earnings. And you need to sink a good $300m plus infrastructure funding into Telecel before you can hope to make any future revenues worth mentioning in a post Whatsapp telecom world. Its not commercial farming Zanu Style where you run people off their land grab their tractors and get free inputs and free labour from Govt. This is telecoms

    1. Macd Chip

      Was the intention ever to buy Telecel……??

      Just thinking loud 🙁

  6. Supa Supa Supa

    It’s obvious what Supas intention was. Bulldoze the Telecel bidding process, elbow out all other genuine bidders, arm twist the shareholders VC and EC into selling at sub market value, then add a massive premium to the $30m deposit paid in order to arrive at a new value of $250m to the highest bidder. Make a quick $220m arbitrage markup in the process. VOILA! In a normal country a commission of enquiry and forensic audit would be instituted right about now and the handcuffs would have been brought out for Supa already. But then again this is Zim.

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