Last week Finance and Economic Development Minister Mthuli Ncube launched a Transitional Stabilization Programme in which he spoke about the privatisation of state-owned parastatals. The Government gave under-performing State-owned enterprises (SOEs) and parastatals it has earmarked for disposal — among them NetOne, TelOne and People’s Own Savings Bank (POSB) — between six and nine months to conclude privatization deals.
In line with this privatisation, South African Telecommunications company Telkom is said to be in talks with NetOne and Mthuli Ncube said as much:
Cabinet approval has been granted for NetOne to start negotiations on a joint venture agreement with Telkom of South Africa
Zimbabwe’s treasury is accelerating the sale of government assets in a bid to set the economy on a recovery path after years of stagnation. NetOne is one of at least 35 companies earmarked by the state to be offered to private investors.
“We are still consulting within government, but we are discussing it,” Zimbabwean State Enterprises Restructuring Agency CEO Edgar Nyoni commented. “For now, we can’t give out details to third parties, but we are discussing it.”
Zimbabwe has three mobile phone companies: Econet Wireless Zimbabwe, Telecel Zimbabwe and NetOne.
Telkom offers both mobile and fixed network services and it will be interesting to see if they can reach an agreement of any sort with NetOne as we’ve heard of these interests multiple times before. This year alone there have been multiple reports if interested parties eyeing NetOne; with the DIDG and other parties said to be looking to strike deals earlier on.
Back in 2010, MTN was also said to be interested in acquiring NetOne. Nothing came about and there have also been a number of reports of acquisitions for TelOne, and Telecel as well on multiple occasions. At this point, one has to wonder whether or not these acquisitions and talks are all just part of a narrative that can paint the government as being more active than it actually is.
But there could be some reasons to be optimistic granted that from 2008 to 2018 there was the dreaded Indigenisation and Economic Empowerment Act which was a policy that went over and above when it came to chasing away private investment.
The law would give the government the rights to take over private companies as 51% of all the businesses in the country would be transferred into local African hands. If the activity that the government claimed to be there at the time was real then obviously this ridiculous law would ensure that investors would have to turn their backs on any potential deal as the hammer could fall on them at any moment.
Now that the law has been removed it will be interesting to see if these deals actually materialise and whether or not the 38 parastatals that the governments want to privatise will actually end up getting privatized.
Telkom declined to comment on whether it is in talks. The company evaluates business opportunities “in line with our ambition to invest for growth and generate returns”, it said.
