Zain Pours Sh2 Billion Into Tanzania’s Government Coffers but forecasts flat revenue for 2009

Mergers, Acquisitions and Financial Results

Mobile phone network operator Zain Tanzania has paid over Sh2 billion as its dividend to the Government for 2007.

Speaking at a brief function where a symbolic cheque for Sh2.4 billion was presented to Finance and Economic Affairs Mustafa Mkulo in Dar es Salaam, Zain Tanzania managing director Khaled Muhtadi said this was a result of the approval of the company's 2008 accounts by its board of directors.

"It is no surprise that the board approved Zain's accounts since we abide by principles of good corporate governance.

"We have also contributed Sh96 billion to the Government's revenue in terms of corporate tax, VAT, Excise Duty, PAYE, Skills and Development Levy and Withholding tax in 2008," he said.

Mkulo commended the company for paying their dividends, and encouraged other blue chip companies to follow suit.

"When a corporation earns a profit or surplus, that money can be put to two uses, it can either be re-invested in the business (called retained earnings), or it can be paid to the shareholders as a dividend. Paying dividends gives the Government the assurance that things are running smoothly," he said.

Zain Tanzania is a pioneer in innovation in the country and it recently launched an m-commerce service Zap which allows Zain customers to receive incoming transfers from abroad directly to their mobile phones over Zap. "Now remittances from abroad can be sent from any financial institution to mobile phones in Tanzania. Remittance receivers can cash the received amount at a Zain shop or any of the 1800 Zap agents across the country," Mutahdi said.

"In the very near future, we will introduce the integration with major banks which allows customers to use their phones to transfer funds from their bank accounts to their phones and vice versa."

In a separate news, Zain’s Tanzanian mobile venture expects full-year turnover to be flat for 2009 on the back of a cut in consumer spending caused by the wider economic slowdown, although it also reports it hopes to continue to see strong gains in terms of subscribers for the rest of the year. The unit’s managing director Khaled Muhtadi told Reuters he expected customer numbers to keep growing but anticipates ‘flat revenue growth’ in 2009. ‘We see 5.2 million customers by the end of this year, up from 4.8 million currently, and aim to reach six million at the end of next year,’ Muhtadi said in an interview.

The Citizen