MTN listing good for local investors

Wednesday October 06 2021

Finally, the long awaited news has come through with MTN Uganda, the country’s largest telecom firm, announcing that it will float 20 percent shares on Uganda’s stock exchange. 

The move, potentially the largest Initial Public Offer (IPO) on the Ugandan market, is expected to breathe life on the local bourse. The Uganda Stock Exchange (USE), is expected to be an immediate beneficiary; with the telecoms providing a wider selection of listed shares. Currently, the USE has very few options for risk diversification making government securities more attractive.

MTN Uganda’s main competitor, Airtel Uganda, is also expected to make similar announcement in the near future. Listing of shares was a government of Uganda condition for the renewal of the licences of the duopoly. The new licensing regime requires operators to go public with at least 20 percent of their shares. Both MTN and Airtel, for example, have operated in Uganda for more than two decades but had never listed on the local bourse.  

The move is in line with the policy objectives of government detailed in the National Broadband Policy (2018) and the Uganda Communication (Licensing) Regulations S. I No. 95 of 2019. 

The decision by government is commendable because it implies that local investors now have a chance to share some of the profit made by these multinationals. Currently, MTN Group owns 96 percent of MTN Uganda.

For decades, these companies have made billions in net profits and little has trickled down to local investors because their biggest shareholders are foreign nationals and organisations.  For this to change, however, local investors will have to take advantage of the offers and invest in the entities when they finally list. 


Telecoms in Uganda are some of the leading employers and tax payers and the success of their listing, we believe, could be a major incentive for other players in the economy to consider the option of raising capital on the local stock exchange. The move can also bolster confidence of local investors to inject cash on the local bourse.

MTN Uganda, which has operated in the country since 1998, for example, says it has “over 1,000 direct employees and employs another 150,000 indirectly”.  

For now investors don’t have much to rely on until the details of the IPO and, subsequently, a prospectus are issued. This is expected to happen by October 11.  At this point, prospective investors will be able to understand the operations of the company, its finances and the direction it is likely to take in the near future.