While doing business in African countries has improved over the last decade, the perils of state takeover have been significant, especially in poorer countries looking for extra revenue. Airtel, which has a presence in 15 African countries, has run into this problem in Tanzania, where the government now claims that Bharti Airtel Ltd.’s local unit belongs to the state-owned Tanzania Telecommunications.
The Tanzania President John Magufuli claimed, "A terrible game was played," refusing to clarify further. The government pointed to the 2016 government order for telecommunications companies to sell at least a quarter of their units on the local bourse to boost domestic ownership. Airtel has yet to list the local unit on the Tanzania stock market. The government already owns 40% of the local firm's stocks.
Expanding the telecommunications market has been a challenge for private firms in Africa, given the shifting tide of regulations in the region. Companies in Ghana have also been ordered by the government to sell shares locally to give domestic investors a stake in the firms.
By Javi Lorbada