Plans are underway for government to sell its shares in MTN Rwanda by the end of this year, Business Times has learnt.
The move is part of the government's broader strategy to divest from companies it owns shares in to facilitate development of capital markets and increase alternative sources of long-term capital for businesses.
“We are still in the process of discussing with MTN South Africa; we have 10 percent of government shares and there is also another investor that also wants to divest from this company so we all might have 45 percent shares from MTN coming on the market soon this year,” John Rwangombwa, the Finance Minister told a press briefing on Monday at the launch of the Rwanda Stock Exchange (RSE).
MTN will become the 3rd company to have its shares traded on Rwanda Stock Exchange if a planned Bank of Kigali’s (BK) 25 percent Initial Public Offer (IPO), mid this year, goes through.
“We expect to raise more capital; we are not privatizing it (BK) as such but we want it to grow in terms of size and be a regional bank; this is a company I expect to be coming to the market before June this year,” Rwangombwa said.
With the RSE, companies will be able to easily not only raise capital for expansion but also have access to long term finance, the minister said.
“This will definitely have an impact on the growth of the economy because we have more resources for investing; this is one area where we have been having challenges having only commercial banks to be the only ones providing investments funds is not that easy,” he underscored.
Government also plans to privatize other companies through the capital markets – including Commercial Bank of Rwanda (BCR), insurer Sonarwa, and cement maker-Cimerwa.