HARARE - The sale of Zimbabwe's state-owned mobile phone operator NetOne - a first key test for the new government's massive privatisation plan - is generating huge interest, the company's CEO told AFP."Since September 15, when the power sharing agreement was signed, there
has been an increase in inquiries from the UK, Canada, Italy, looking
for opportunities," NetOne chief executive Reward Kangai said in an
interview.
NetOne is the second biggest operator in the country and competes with
two privately owned companies for the Zimbabwe market, which has only
1.4 million mobile phone users but is seen as having strong potential
for growth.
The sale is part of a broader effort to bring in much-needed funds for
an economy riven by hyperinflation, political strife and disease. State
assets in the oil sector, air transport and railways are also planned
for privatisation.
The unity government, which only took office this February following
disputed elections in March 2008, says it needs more than 8.5 billion
dollars (6.4 billion euros) over three years to haul the country out of
economic ruin.
A regional bloc has pledged to help, but international donors are
reluctant to release funds until they see the uneasy power sharing deal
between long-time rivals President Robert Mugabe and Prime Minister
Morgan Tsvangirai in action.
The new cabinet has already made major moves towards economic reform,
unveiling a recovery plan that slashed price controls, eased import
restrictions and made the South African rand the currency of reference.
In March, new Finance Minister Tendai Biti presented a revised budget
to parliament, updating the one unveiled in January by Mugabe’s cabinet.
His new estimates showed that government revenue would be one billion
dollars, down from the 1.7 billion dollars projected in the January
budget.
Biti has also suggested the government must sell parts of state-owned
entities like the National Oil Company of Zimbabwe, national carrier
Air Zimbabwe and the rail company although no concrete plan has yet
been approved.
"Selling state owned assets will send a right signal to investors, but
it is better to get a correct value of those assets before disposing of
them," said Best Doroh, chief economist at local investment group ZB
Holdings.
In the interview with AFP, NetOne’s Kangai did not reveal the names of
the firms interested in buying the company but said they were already
present "in a number of African countries" and promised maximum
transparency on the sale.
The Zimbabwe telecommunications industry, like most businesses in the
former British colony, has been knocked back by nearly a decade of
political turmoil, with crumbling infrastructure and the imposition of
crippling state controls.
Industries have been at less than 10 percent of capacity for years.
Kangai said that one reform planned by the government for the telecoms
industry was the removal of high tax charges on imported equipment.
Telecoms companies are currently taxed up to 60 percent on imported
materials.
"We want all Zimbabweans to have broadband, access to other markets. We
want to be home away from home and have technical expertise," he
continued.
As for the cost, Kangai said NetOne was valued at half a billion
dollars three years ago, adding that capital requirements would be 200
million dollars.
The NetOne chief sounded an optimistic note about the economic future
of this struggling southern African nation saying: "Zimbabwe is open
for business, investors will be able to invest to start operations here
at low cost."
Yahoo/Agence France Presse (AFP)
Post published in: Economy