Umeme chief executive officer Charles Chapman has urged the Government to encourage giant corporates operating in Uganda to sell their shares to the public.
Chapman, while handing over a dividend cheque to the National Social Security Fund (NSSF) on Monday, noted that if the telecom firms and banks sell off part of their shares, the Ugandan public can partake in the enormous growth.
“The focus should be on how many more initial public offers (IPO) should be done in the market,” noted Chapman. An IPO allows the public to buy shares of a company listing at a much subsidised flat rate other than the market rate decided by demand and supply.
Banking and the telecommunications sectors are some of the most lucrative in Uganda, with the industries having close to 30 banks and seven telecom operators. All the telecoms are privately owned except Uganda Telecom, where the Government retains a small stake.
“Put pressure on these companies, the returns should be retained in Uganda,” noted Chapman.
Geraldine Ssali, the NSSF acting chief executive, said in buying into Umeme, NSSF followed due process even through towards the closure of the process, both the minister of finance and the fund’s chairman were not in the country.
She was responding to queries from Parliament about the ongoing recruitment process at the NSSF and the procedure through which NSSF bought Umeme shares. NSSF is the third largest institutional investor in the utility company, controlling 14.27% shares.
“Even if we exited, we would walk away with capital gains of about sh19b. I would walk away with more money than I came in with,” noted Ssali.
The fund received a cheque of sh3.3b net earned in about a year.
Ssali said for the fund to be competitive, the NSSF Act should be amended so that the many bureaucratic processes in clearing investments are avoided, just like it is with private firms.
NSSF spent a total of sh70b with the IPO, costing sh25b and the secondary transaction sh11b. The fund also spent sh34b on 100 million Umeme shares as Actis exited Umeme.
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NSSF receives sh3b dividends from Umeme