The Swazi
Observer has hidden the links between King Mswati III and MTN in its
extensive coverage of the cell phone service provider in recent days.
The Observer,
which is in effect owned by King Mswati, who rules Swaziland as sub-Saharan
Africa’s last absolute monarch, has devoted acres of space to MTN, which has
the monopoly of cell phone business in the kingdom.
On Wednesday (15 June 2016), the Observer reported as its main story on its
front page the ‘news’ that MTN was scrapping scratch cards for lower
denominations of airtime, but people would still be able to top-up their phones
from street vendors.
The story ran over pages two and three
and was written by the Observer chief
editor Mbongeni Mbingo.
On previous days it had devoted pages
and pages to the so-called ‘21 Days of Y’ello Care’, which is an ongoing
promotion of the company that relies on its staff volunteering time and money for
good causes. This year the focus
is on education.
What the Observer did not tell its readers was that King Mswati has a large
personal financial stake in the company. He owns 10 percent of the shares and
is considered by MTN to be an ‘esteemed shareholder’ in the company.
MTN has been the monopoly mobile
provider in Swaziland since 1998 and services are provided in a joint venture
between MTN, the Swazi Government and the Royal Family.
The King’s income from MTN is generally kept secret from his
1.2 million subjects. Seven in ten of them live in abject poverty with incomes
of less than US$2 per day. The King is notoriously secretive about his own wealth;
it had been estimated by
Forbes
that he had a net wealth (assets minus liabilities) of US$200 million.
It added, ‘These companies have either given large chunks of
the shares in their Swazi businesses to Mswati directly or to Swaziland’s
investment institution,
Tibiyo
Taka Ngwane over which Mswati has absolute control.’
It reported that the King holds 10 percent of the shares in
MTN in Swaziland and is referred to by the company as an ‘esteemed shareholder’.
It said MTN had paid R114 million (US$11.4 million) to the King over the five
years up to 2014.
The newspaper quoted a report from Freedom House which
stated, ‘Foreign companies wishing to enter Swaziland must bribe Mswati with
shares or cash in varying amounts depending on the potential for profitability
of the proposed venture and the new business’s possible impact on Mswati’s own
business interests.’
The Sunday Times
reported that MTN had a monopoly in Swaziland and was used by 57 percent of the
population. It said MTN was able to keep prices high, citing the cost of 300
megabytes of data in Swaziland as R149, while in South Africa the same amount
of data cost R79.
In 2009, Earl Irvine, then US
Ambassador to Swaziland, wrote
a confidential cable (later published by Wikileaks)
in which he said the King operated in his own financial interest. Part of the
cable said, ‘Royal politics and King Mswati’s business interests appear to have
caused the ouster of Mobile Telephone Network (MTN) CEO Tebogo Mogapi and
halted parastatal Swaziland Post and Telecommunications Corporation (SPTC) from
selling the MTN shares it owns to raise money for a Next Generation Networks
(NGN) cell phone project.
‘Industry and press observers privately
indicated that the King, who already owns many MTN shares, had wanted to
purchase the MTN shares himself at a cheaper price than the buyer, MTN, was
offering SPTC.
‘Government officials later prevented
the sale, and recently did not renew the work permit for CEO Mogapi, a South
African citizen, apparently in retaliation for his role in the transaction, as
well as the CEO’s reported decision to oppose government efforts to use the MTN
network for electronic surveillance on political dissidents.’
The cable went on, ‘The government’s
halt of parastatal SPTC’s sale of MTN shares demonstrates the impact the King’s
and other influential individuals’ private business interests can have on business
transactions in Swaziland.
‘Government officials would likely
prefer a more malleable Swazi CEO at MTN who would cooperate more fully with
royal and government wishes.’
Dlamini is the man in charge of the
government-controlled parastatal, SPTC and is therefore a key decision maker in
the affairs of Swaziland’s national posts and telecommunication. This raised questions about Dlamini’s
impartiality when making decisions about SPTC.
A research article written by Ewan
Sutherland of the University of the Witwatersrand, Johannesburg, South Africa,
and published in December
2014 in the Communicatio academic journal, explored
telecommunications in Swaziland and concluded there was no competition for
mobile phones in the kingdom and ‘the monarch and his cronies are financially
tied to Swazi MTN, seeking to neuter the state-owned SPTC. The government has
no concern for consumers, service delivery or economic growth, with the King
and his prime minister looking after their personal financial interests.’
‘Sutherland wrote, [I]t is difficult to
see how any investor could have confidence, unless it had the sovereign on
their side and, more likely, in their pocket.
‘The monarch has a significant and
lucrative investment in the principal operator, with the effect of confusing
and confounding an already feeble system of governance. The opaque
profit-seeking of the King conflicts with the purported aspiration to good governance
of telecommunications markets and the interests of his subjects. In a
constitutional monarchy, arrangements can be made to keep the investments of a
monarch separate from politics, allowing for transparency, accountability to
parliament and the avoidance of interference with governance (e.g., Japan and
the Netherlands).
‘A feudal monarchy knows no such
distinction, there are no conflicts of interest for ministers, regulators and
directors – they obey their king. It echoes the problems of Morocco, where its
king has private interests in telecommunications, has ministers sit on the
supervisory board of the state-owned operator, and he appoints the regulator
and is head of the judiciary.
‘Ordinarily the MTN Group would be
expected to favour competition and market entry. However, in the Kingdom of
Swaziland it has violently opposed competition, going to considerable lengths
to block a second mobile operator and even a fixed wireless service. This
record removes any presumption in other jurisdictions that its actions are
pro-competitive. Equally, it has been happy to work with Mswati III, one of the
exotic collection of autocrats with whom it does business, with no fear of
reputational risk.’
See also
SWAZI
ELECTION – SPONSORED BY MTN
DOES PM HAVE
A FORTUNE FROM MTN?
US DECRIES
SWAZI KING ON MTN DEAL
PHONES CUT
AS SWAZILAND PROTESTS
http://swazimedia.blogspot.com/2011/09/phones-cut-as-swaziland-protests.html
