The Airtel ,Tigo merger talks, which has been ongoing for about a year now, is in danger of being scuttled by government’s demand of a stake in the new entity to be created from the merger.
According to sources close to the merger talks, the demand is one of the major factors that is holding back the National Communications Authority (NCA) from granting its approval to the deal which would create the second largest mobile network after MTN.
Government’s demand is premised on a decade-old transaction when government sold 75 percent of its shares in Westel to MTC Group which operated Zain. Zain was later acquired by Airtel in 2010.
Government has over the years, through the Ghana National Petroleum Corporation (GNPC), maintained a 25 percent stake in Airtel amidst accusations that it has not invested in the operations of the company as is required of all shareholders.
The demand being made by government is said to be a condition that must be accepted by Airtel Ghana before the regulator will sanction the merger with Tigo, operated by Millicom Ghana.
According to sources close to the two telcos, the demand by government is seen as a setback to the discussions with
NIC push for consolidation
…as it targets 100% minimum capital increment
The National Insurance Commission (NIC) is pondering a 100 percent increment in the current minimum capital requirement for insurance companies in the country, as part of efforts to strengthen the sector and engineer consolidation in a saturated industry.
There are more than 50 insurance companies in the country serving a population of 27million. Insurance penetration however remains relatively low at about 2 percent.
The current minimum capital requirement for insurance companies is GH¢15million, but at the current figure, some companies are said to be struggling since their capital base is too small to underwrite big-ticket transactions.
Justice Yaw Ofori, Commissioner of Insurance, speaking at the launch of Loyalty Insurance in Accra, said as the regulator, the NIC is committed to doing all it can to strengthen the sector, and might consider a huge revision of the current minimum capital requirement for insurers.
“I don’t know when yet [the percentage of increment] but I think even if we go a hundred percent, it will be good because the more capital you have the stronger you are, and that means international companies will be ready to do business with you and that is how it should be. You can’t be a very effective international insurance company when you are small,” he said.
BoG plans GH₵400m minimum capital
The Bank of Ghana has decided to increase the minimum stated capital requirement for commercial banks to GH₵400 million, a more than 230 percent increment, the central bank has said.
The central bank is said to have met the various heads of commercial banks Friday morning and told them they have up to December 2018 to meet the new minimum capital requirement.
Discussions among stakeholders have been ongoing for months regarding what level of increment in minimum capital requirement the bank considers appropriate.