Supa Mandiwanzira addressing Parliament
The Zimbabwean government used money from the Universal Services Fund (USF) to partly finance its acquisition of Telecel Zimbabwe.
This information was shared by the Minister of ICT, Supa Mandiwanzira in an evidentiary hearing with the parliamentary committee on ICT held today.
Responding to a question from the committee led by Nelson Chamisa, Mandiwanzira highlighted how the Universal Services Fund (USF) is established as a trust which has the rights to operate as a legal entity that can take part in any investments including equity investments in any company and even buy shares in listed companies like Econet.
Mandiwanzira pointed out that it wasn’t unusual for the USF to be used for such purposes including diverting US$10 million towards investments in local companies.
The Universal Services Fund (USF) is a pool of financial contributions made by all telecoms operators in Zimbabwe which is collected and managed by the telecoms regulator, POTRAZ.
Operators contribute a percentage of their gross revenues towards the USF with the understanding that it will be used to facilitate investments in areas such as remote parts of Zimbabwe where operators might neglect their efforts because of weak business cases.
The questions on this transaction were raised to gain clarity on the case of government’s investment in the acquisition of a mobile operator through funds provided by its competitors.
During the evidentiary hearing, Chamisa also questioned if there was a case for the fund to be used in the investment of licensed entities in telecoms, something which Mandiwanzira reiterated as being justified in terms of the fund’s investment obligations.
The Minister’s statements are likely to be referenced by local mobile operator Econet Wireless as an example of unfair practices. Econet has repeatedly taken POTRAZ and the government to task over the use of the USF and has also pointed out that it could likely be the only operator paying towards the fund.
In 2016 Econet sued POTRAZ for US$132 million and as part of its legal challenge, it asked for audited records of the USF.
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7 comments
The learned Minister is contradicting himself, the USF cant be both, one he says it was set up to invest in rural and remote areas were MNO might not be interested in, this means it will benefit all contributors to USF
how do you then take such funds and invest in another company worse of a competitor and for all we know who may have never paid any contributions to such a fund.
What else the USF is being used for? Pay salary for Mandiwanzira? It could since Chhuri gets his from roadblocks.
Mbudzi inofurira payakasungirirwa
Econet needs to take gvt(Mandiwanzira) to court and get their equal share! Econet’s money was used to buy Telecel, so they have the right to ownership!
Econet’s money is also being used to bank roll Potraz so they own it, and have the right to appoint board directors etc.
But then Econet is skrewing us to keep itself afloat and pay its never ending dues!
Guys u have to understand that supa doesn’t do things that do not benefit him.I smell something shady in this acquisition.don’t forget that these parastatals or govt linked entities r where they steal money from,panezvakaitika apa
Could be. Didn’t Gov announce the intent to sell Telecel somewhere down the line? Guess who will be in pole position to purchase it (directly or by proxy) at a heavy discount!
The whole idea of using USF which is Econet major contributor, buying another struggling private entity raises stinks and one day some people will rot at Chikurubi, what more of vehicles for the minister and his deputy plus what will be the sharing formula in such botched business operation entity. What will those with deeper pockets deduce from such corporate mayhem and what are the balance sheets of Telecel, NetOne and TelOne as the public have the right to know and peruse and who benefits from this brouhaha. All state entities remain going concerns when tech investments remain operational and continuous tech intensives. Which state entity have ever ever broken even as whatever they touch turns into financial dung, all these goblins deserve bullets in their foreheads, after all time will tell!!!!
ECONET TAKE MANDIWANZIRA TO THE CLEANERS. THE ZSE CHAIRMAN WHO ALSO WANTS TO PUNISH ECONET IS COMPANY SECRETARY FOR A RIVAL MOBILE OPERATOR. ZIMBABWEANS LETS ALL AGREE TO BOYCOTT TELECEL, NETONE AND TELONE