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MTN Bid for Orascom Seen Channeling Capital into Zimbabwe's Telecel Provider

Sources said London-listed Orascom is moving ahead with the investment despite concerns over Zimbabwe’s indigenization law that could oblige firms with assets over US$500,000 to cede a 51 percent stake to indigenous Zimbabweans

Africa’s largest mobile operator, MTN, is said to be close to a deal with Egyptian telecommunications giant Orascom which would lead to the investment of billions of dollars in Telecel Zimbabwe, the country's second largest cellular communications player.

Sources said London Stock-Exchange listed Orascom is moving ahead with the investment despite concerns over Zimbabwe’s indigenization law that could oblige firms with assets of more than US$500,000 to cede 51 percent of shareholdings to indigenous Zimbabweans. But the Indigenization Act implementing regulations issued in March are being reviewed by the Attorney General's Office and are likely to be broadly revised.

Business sources said that if the deal is sealed it will be the largest investment in Zimbabwe since the publication of those controversial indigenization rules.

Telecel Zimbabwe Chief Commercial Officer Anwar Soussa told VOA Studio 7 reporter Gibbs Dube that there are high hopes the deal will be sealed.

“However," Soussa cautioned, "we cannot say how long the negotiations will take before a deal is concluded."

Telecel is the second-largest mobile provider in the Zimbabwean market with subscribers independently estimated at 600,000, trailing Econet with 3.6 million, and ahead of state-run NetOne with 500,000.

In other economic news, the government is expected to set up a new Reserve Bank of Zimbabwe board soon that will include a number of top economists and former RBZ Governor Kombo Moyana, sources said.

Finance Minister Tendai Biti declined to comment. But sources well informed on central bank issues said that in addition to Moyana, four economists are considered to be short-listed, including University of Zimbabwe Professor Tony Hawkins, Director Godfrey Kanyenze of the Labor and Economic Development Research Institute, Charles Kuwaza of the State Procurement Board and independent economist Daniel Ndlela.

Carrol Themba Khombe, a member of the Human Rights Commission, is being considered for a seat, along with lawyer Mordecai Mahlangu, Finance Secretary Willard Manungo and Zimbabwe Open University Vice Chancellor Primrose Kurasha.

Zimbabwe Coalition on Debt and Development Vice Chairman Masimba Kuchera said naming Moyana and other respected economists to the RBZ board will help restore the bank’s reputation and the wider economy.

NB: This article incorporates a correction to indicate that Telecel is the second largest mobile operator in the Zimbabwean market.