Zimbabwe’s Minister of ICT, Supa Mandiwanzira recently told the parliament of Zimbabwe that contrary to what has been said repeatedly by Econet Wireless Zimbabwe about its licence payment fees, the mobile operator did not pay its licence its full and part of the payment was actually made by the people of Zimbabwe.
While responding to a question from a parliament committee regarding the uneven playing field in telecoms which has been brought up by Econet, Mandiwanzira explained how Econet has actually benefitted from conditions set in its favour through obligation handles by the State on its behalf.
Mandiwanzira was referring to the payment plan which Econet negotiated in 2013 when it renewed its licence in 2013. Rather than pay the full amount of US$137.5 million, Econet asked that the US$60 million in interconnection fees which it was owed by NetOne and TelOne be offset against the payment. NetOne and TelOne are State-owned telecoms operators.
This meant that Econet only “paid” the balance while the government assumed the debt. This arrangement is the basis of Mandiwanzira’s argument.
Econet has consistently pointed out that it is the only operator that paid its licence fee in full and used this is one representation of the unfair playing field in Zimbabwe. It’s unlikely, though, that the operator or its investors will view the arrangement as an example of a fair playing field but rather as a successful strategy to monetise a doubtful asset.
You can read the Minister’s remarks on the matter below.
I would like to say that is actually a lie that Econet paid its licence in full. It’s misrepresentation that has been repeated over and over again to make it a fact but I would like to say that today it actually is not a fact.
The truth of the matter Mr Chairman and Honourable members of Parliament is that Econet, like all the other operators who had their licences due for renewal at that time, were given terms to pay for those licences and those terms were granted on the ability of each operator to pay within a particular period.
During that particular time, Econet indicated that it was able to pay this amount within six months and Econet was granted permission to pay the licence fee over six months. But it is not true that Econet paid $137.5 million which is the licence fee. They paid part of it in cash and the balance was paid on behalf of Econet by the people of Zimbabwe.
What Econet did was that it negotiated with Government that “Oh, by the way, as we are renewing our licence we are owed money by NetOne and we are also owed money by TelOne. Can you as Government take over those loans, those amounts which were accumulated in their day to day operations between their business entities.” They then asked the Government to take over that liability and pay to POTRAZ the licence fee. That is the truth of the matter. $60 million was paid by the people of Zimbabwe, not by Econet.
Of that total licence fee, it was paid, I’d like really to make this very clear so that you understand and everybody understands so Mr Chariman allow me to put all the facts on the table. So what then happened is that Government took over the obligations of its parastatals which were due to Econet.
Now I will ask members of the committee who are seated here how many companies are owed money by parastatals in this country? How many businesses who do business with Government or parastatals are owed huge amounts of money and the Treasury has not taken over those amounts? Many companies. But in this particular case, Econet had the advantage of having its $60 million debt taken over by Government, and Government took from the people of Zimbabwe through the taxes they pay, $60 million to pay to POTRAZ as part of the licence fee for Econet.
Those are the facts, Mr Chairman. And that is what happened. So when people sit before your committee and say we paid our licence fee in full they are being dishonest. The truth is the people of Zimbabwe paid $60 million of that amount on behalf of NetOne and TelOne.
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26 comments
Well, that’s some word play here. Either way, it’s all about the balance sheet and Econet found a way for the govt to pay back it’s debt. As someone mentioned on Twitter, ” he is a beneficiary of infrastructure sharing “
What kind of reasoning is that? So when parastatals owe money to private companies you call that the people of Zimbabwe. Government owed Econet and they had to honour that or risk disconnection and Econet doesn’t have to feel grateful for being paid $60 million. They paid in full period..
well said baba
….So basically they DID pay in full!
Ava ndivo vakatobhadhara in full. What is worrying is the fact that the minister goes to great lengths to prove otherwise
I wonder how we got a minister of this calibre into such an important position, Econet paid in full according to the minister’s words only his understanding of business is political. the debt was owed to Econet for business done how can that not be payment.
What absolute rubbish by this fence post tortoise of a minister. Instead of focusing on how the two government owned entities aren’t meeting their license obligations, he wants to train his fire on the one entity that has met its obligations.
What is this chap Mandiwanzira smoking?
I thought Supa was smart , that’s utter rubbish is he justifying the fact that parastatals should be owing private companies , Econet paid in full using part of the money the parastatals where not willing to pay, obviously if $60mil is the part that was being owed, econet was clever to negotiate with government that it won’t be able to pay anything if those companies don’t pay the interconnection fees, and the government could not risk econet not paying the $90m . I’m sure the $60mil wasn’t even paid , makatongo ita kuti zviite balance . And hamuna choice , econet was gonna cut you off
The bottom line of all this shit is exonerated paid in full…even in accounts there are offset transactions if you are owed something by the one you want to pay…..so what is peculiar abt this one!
This Mandiwanzira guy is kind of stupid…playing politics with people and if the parliament committee accepted this stupid explanation then they are preety stupid too
minister edu aya.he aint ashamed to stand before honourable MPs to say such trash.If they agreed to it then Econet paid in full anx they have a right to that claim.
Econet ine chikwereti here
We might as well lobby for MP Chinotimba to take over this portfolio.
Supa is a retard
1. Simple accounting principles say that accounts can be offset and thats what is done in everyday accounting transactions.
2. Cde Minister, Why say the people of Zimbabwe paid on behalf of Telone and Netone when these 2 companies are supposed to be profit making organisations who publish their yearly financial statements??
3. Kudos to Econet for being business minded and clever enough to strategise on how to recover such an amount that would have even taken 5 years to recover.
My child’s school owe me 20 dollars. Iniwo ndavepa tyt ndoda kubhadharawo school fees yemwana wangu ye50 dollars apa ndine 30 chete pandiri. Tochibva tawirirana na bursar wechikoro together with debtors kuti ndavekukupai 30 dollars yandinayo, 20 dollars yasara the school offsets. Can the school say 20 dollars haisi mari yangu?
Wakakora iwe unogona accounts
Does Supa have a brain in that greying head of his?
Seriously, this nonsense comes from what is supposed to be an up and coming minister who has ambitions of being President? What an embarrassment. The economy will never improve if this is the level of intellect which is being applied. Attacking Econet appears to be the Ministers favourite pastime whilst the only useful information to be gleaned from his statement is that the Government’s own companies Telone and Netone are mismanaged and can’t pay their interconnect bills when they are due. Minister we expect better from you.
I thought Supa was Smart enough ,in other words Econet paid in full.
kkkkkk aya ma Minister edu aya
Eish. … What Crap, did this guy go to school, This doesn’t need Form 1 Principles of Accounting. .. Even primary school kid will tell you this is rubbish…. Even my great grand mother. … knows this principle. … So whose money was Netone and Telone owing……..Even paramende which listened to this. ….Honestly. .
Thot this guy was smart
this is embarassing. With Ministers like these we are doomed for sure. The money was ecconets in the first place. They paid in full the licence fee. Zimbabwe gvt owed Econet. Where does Mugabe get these manure head people to run such an important ministry?
I just have 3 easy questions that i just answered myself
1. Was Econet owed for interconnect services by Telone and NetOne, and these got paid by Govt through a set-off?, if yes, then Econet has paid in full.
2. Is a set-off an acceptable form of payment? if yes, then Econet are fully paid again.
3. Does Econet still owe POTRAZ for the license? if not, then they are paid in full, again.
Poor SUPA is singing for his SUPPER. The guy just cannot be taken seriously. He wanted Econet to fold its hands and let NetOne and TelOne get away without paying the inter-connector fees they were owed. Some of us vividly remember Econet disconnecting TelOne before Government or Portraz almost immediately ordering them to reconnect them. As I have advocated before Government cannot be both a player and referee.
I literally felt tears coming out of my eyes when I realised this is the sort of illiterate leadership without vision and direction we have in this country. Ma one.. we are not going anywhere. Our only hope is in the God Almighty.
This Supa guy is over rated, he is still too foolish to be called a minister.