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Magaisa: Government Forced Econet To Pay Their Licence Renewal Fee So They Could Use It To Fund the 2013 Elections

Econet sued

So these days we have been receiving all sorts of titbits from social media. This week we learnt that Telecel International and MTN once partnered with Econet Zimbabwe in its infancy days before the company’s founder(s) Strive and Tsitsi Masiyiwa bought them out via their company TSM Ltd well before Econet became a public company.

Well, former advisor to the late Prime Minister, Alex Magaisa had his own bombshell. In a series of tweets posted on his account he alleges that the Zimbabwean government hounded Econet to pay their licence fees (to the tune of $85 he says) so that the government could fund the 2013 elections. He further alleges that the Zimbabwean government did not want to use external sources of money as these sources came with strings such as a demand for electoral reforms which the then led Robert Mugabe government was apprehensive about.

For purposes of populating the public record and to avoid the danger of the single story, allow me to share my observations regarding election funding in 2013. I make no claim that my version is the exclusive truth, no.

In 2013, ZANU PF was pushing for an early election. It was desperate to avoid implementation of electoral reforms after the success of the constitutional referendum in March. The sooner elections were held under the old order the better. The problem was there was no money.

We (MDC) saw this as a chance to push for reforms, 1 of which was having international election observers. Recall that the international community had funded a large chunk of the constitution-making process via UNDP? They were also ready to help with election support.

Mugabe agreed in principle but stalled. A team of pre-election assessors was unceremoniously stopped en route to Harare. ZANU PF figured out that a role for the international community would come at a price: a role for them as election observers. It didn’t like this scrutiny.

So ZANU PF scrounged for local funding to avoid the external eye on elections. We thought they had diamonds’ money but the looters were too greedy to share with the treasury. Then they identified mobile telecoms companies, whose licence renewals were soon due.

The fee is paid to Potraz, the regulator, which falls under the telecoms ministry, the under ZANU PF’s Goche. I don’t know the nitty-gritty but soon Mugabe said we had enough funding & therefore didn’t need UNDP help. That effectively shut the route for the observers.

We soon learnt that they had managed to squeeze $85 million out of one mobile company. The other two did not pay a penny. They are now both state-owned & I’m not sure they have paid, a source of unfair competition with their rival which had to pay while they didn’t.

The irony, as I pointed out a few years ago, is that the licence fee payment had (perhaps unwittingly) assisted ZANU PF to avoid international observation which would have been part of the international funding package. I don’t blame the company at all – the fee wasn’t a choice.

This is how things unfolded from my perspective. It was a game of political chess & ZANU PF managed to play a strong hand. The company could not refuse to pay because the fee is a legal duty. But hopefully & maybe it used some leverage to negotiate a good deal for itself.

The issue of other companies not paying their licence fees

The most interesting thing brought out in the revelations is something we have known all along. Not only do government owned entities under-perform most do not pay tax or licence fees. I have always felt this to be grossly unfair as it essentially means these parastatals are receiving hundred of millions of dollars in handouts.

Quick NetOne, Econet, And Telecel Airtime Recharge

4 thoughts on “Magaisa: Government Forced Econet To Pay Their Licence Renewal Fee So They Could Use It To Fund the 2013 Elections

  1. Magaisa is a friend of strive, so I will take what he says concerning this matter with a pinch of salt. Let’s say we believe him, did the government Aldo pressure econet to give them our phones numbers during the last elections campaign period? Just like Grace used to speak on behalf of Mugabe, I believe that strives wife spoke on his behalf when she kept tweeting offending things to us zimboz.

  2. It appears to me that TechZim has recently changed hands, and is now being run perhaps by infant activists who have no institutional memory.

    How is this a “revelation” that Econet licence fee funded the 2013 election? TechZim itself covered this.

    Also, how is it a “titbit from social media” that Telecel international and MTN had public roles in Econet prior to listing? Surely this would be known to any tech news website of any repute.

    Please do better, whoever it is running this site now. There is no revelation here, if you cared to read, and to read even information once shared on this platform when it had some authority, you would better inform your readers with broader context.

    It’s sad to see, really. Wish you all the best, and rooting for you to improve.

    1. Thank you for your feeback. This story is a confirmation and status update of the earlier article you cite. Back then things were left sort of hanging and we never got a sort of insider view of what later happened here. Also note that licence payments are usually staggered and should be paid by all operators.

      Also my sincerest apologies for offending you. I hope you keep reading TechZim and we will endeavour to improve our articles.

      Also we only consider ourselves Technology and Business activists. However we have to report the news even the topics some of our readers find to be unsavoury. Consider for example how Donald Trump dominates the media despite how he divides public opinion.

      1. Just a few more articles to help. Context is important.
        Here’s one that shows that this wasn’t a “revelation” that licence fees were used to fund election.
        It also debunks any needless speculation as to who negotiated what, or that Biti was sidelined.

        Two other further articles of similar usefulness

        Another in Daily News, whose very first line tells you the story;

        In short, context is key. Many of your readers, and perhaps even yourselves, may not have enough background, and may take what Moyo or Alex say as a “revelation”. Hope this helps inform your readers better.
        Best wishes

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