NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Thursday, May 31, 2018

By Dipo Oladehinde and Michael Ani

MTN Ghana, the largest telecom operator in Ghana opened a historic Initial Public Offering (IPO) in the country that will see it raise as much as US$743 million in fresh capital or an equivalent of N264 billion. The IPO is the largest ever undertaken by the country and if successful could set the stage for other companies to test the market.

The offer is being keenly watched by operators in the Nigerian capital market because its success could open room for Nigerian firms to look to the West African neighbour for their capital needs considering the dearth of IPOs in the Nigerian capital market, a situation that is expected to be remedied with an expected similar MTN Nigeria IPO later in the year.
But MTN Ghana IPO is also unique in that it is the first ever IPO globally on any stock exchange in which shares can be purchased through mobile money. This is being facilitated through the MTN Momo Wallet, a mobile money platform popular in Ghana where Telecom operators have been allowed to lead the mobile money revolution. This is unlike Nigeria, where mobile money platforms have failed to pick up largely because it is still a bank led model.

In the MTN Ghana IPO, all an investor has to do to buy units of the shares on offer is to ‘Dial *170 Hash” and follow the required instructions, and he will be able to purchase as many shares as he can afford with the cash stashed away on his MTN Momo Wallet. It is a unique mode of IPO that has ‘democratised’ the share offering process, a factor that would likely make the offer highly successful, say analysts.

Photo courtesy of Paul.