Prime
Call for reforms as telecoms sidestep Dar stock exchange
What you need to know:
- The Electronic and Postal Communications Act (EPOCA) of 2010 mandates non-state-owned telecom operators to offload at least 25 percent of their shares to the public via the Dar es Salaam Stock Exchange (DSE).
Dar es Salaam. The mandatory requirement for telecommunications firms to list on the stock exchange has become a subject of intense debate among industry stakeholders. To date, only one operator has adhered to the legal mandate, raising questions about its feasibility and implementation.
The Electronic and Postal Communications Act (EPOCA) of 2010 mandates non-state-owned telecom operators to offload at least 25 percent of their shares to the public via the Dar es Salaam Stock Exchange (DSE). However, years later, other major players in the sector remain unlisted, raising concerns about the law’s enforceability and relevance.
The stock market and economic experts now call for improvement in the law so as to fit the current market conditions and demand.
Prof Abel Kinyondo from the Dar es Salaam University College of Education questioned the practicality of enforcing a law that has largely been ignored.
“When you have a law that has not been enforced for years, it tells a lot about our ability to uphold the rule of law as a country,” he said.
He noted that Tanzania’s stock market is still in its infancy and lacks sufficient investor participation. “The law was enacted with nationalistic aspirations but overlooked the realities of our young stock exchange,” said Prof Kinyondo.
He argued that listing should be a natural progression for companies seeking financial resources for expansion. “We need to revisit the point of having a law that is unenforceable and assess whether the benefits so far justify its existence,” he added. Since its listing in 2017, Vodacom Tanzania PLC has paid over Sh571 billion in dividends, according to its 2024 annual report. The company follows a dividend policy of distributing at least 50 percent of its post-tax profit annually.
In contrast, Mr Juventus Simon, operations manager at Orbit Securities, defended the mandatory listing requirement as an important avenue for Tanzanians to participate in the country’s growing telecoms sector.
“It’s important for Tanzanians to participate in their own economy by owning shares in the companies driving it,” he said, adding that the law could be refined to make it easier for companies to comply and attract investors to the stock exchange.
He also suggested expanding the scope of mandatory listing to other sectors, such as financial institutions, to provide more opportunities for Tanzanians to benefit from the local economy.
Apologies for the confusion. Here’s an improved version of the text with better clarity and flow:
During a function announcing the acquisition of Tigo (now Yas) by Madagascar’s Axian Group, Yas Tanzania’s chairman, Mr Rostam Aziz, was quoted expressing scepticism regarding the mandatory listing requirement.
When asked about the possibility of offloading some shares of Tigo to the public as required by the law, Mr Aziz said they can do it to obey the law but he personally had different views on the matter.
He said offloading shares and subsequent listing on the stock market should be voluntary for shareholders, depending on the market forces.
“In my views, offloading shares should be a decision of the owners instead of making it mandatory by law. I hope the policy makers will review the law and let the business principles to rule,” said Mr Aziz.
