Remember ECONET Wireless, the first mobile operator to launch commercial GSM services in Nigeria? That was 2001. Strive Masiyiwa is the founder and executive chairman

ECONET’s travails in Nigeria: Strive Masiyiwa opens up

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Remember ECONET Wireless, the first mobile operator to launch commercial GSM services in Nigeria? That was 2001. Strive Masiyiwa is the founder and executive chairman of the Econet Wireless group. ECONET Wireless was later pushed out and replaced by another operator along the line. Strive has taken to Facebook to share the juicy details of what went on – and it is a sordid story of corruption that stinks badly.

ECONET Wireless logo

For your convenience, here is the update by Strive:

I had the privilege of making Nigeria’s first GSM phone call back in 2001 when I called the regulator to say, “We’re live!” Who would’ve believed then that Nigeria today would have more than 167 million mobile phones?!

It all started out as a very exciting new chapter for enterprise in Africa. Shortly after President Obasanjo was elected, the new government announced an incredibly transparent international auction process for three national mobile phone licenses.

To participate in the bid, you not only had to raise money, but there had to be a member of the bidding consortium who was an experienced GSM operator. Econet Wireless met the requirements because of its experience in Zimbabwe and Botswana. Our Nigerian partners, which included state governments, local banks and high net worth individuals, were financial investors. The largest shareholder had only 10%. That was the written agreement.

I managed to assemble a consortium of 22 investors to put up the money needed to bid. Our shareholders were all Nigerian, mostly institutional investors including leading banks and two state governments, Lagos State and Delta State. The license cost us $285m and was the most expensive license ever issued in Africa at the time. This was 2001.

We considered the investment not only about putting together a network, but also about building a nation. We knew it had the potential to transform Nigeria’s entire business and social architecture.

Most of our investors had between 1-10% shareholding. Econet Wireless Nigeria had only 5% of the shares, but that was fine because it was 5% ownership of a very big pie.

As the “technical partner and operator,” Econet was the company with the expertise to build and operate such a business. Our financial investors recognised this, and also allowed us to receive 3% of the turnover as our fees. This was standard practice in the industry.

We were one of the winning bidders and they gave us just six months to set up business and get our network operating. We were under a lot of pressure but our network was live two days before the others! Customers were pouring in. We were number one in the market with an estimated 57% market share.

___Then came the fateful day when I was told that our company must pay a total of $9m in bribes to senior politicians (in state government) who had facilitated the raising of the money to pay for the license.

I refused to authorise the illegal payments. Meeting after meeting was held to try to get me to agree, but I would not. The money would not be paid as long as Econet was the operator and I had signing authority.

James Ibori, the Governor of Delta State, was demanding $4,5m be paid to him in his personal capacity. He was one of the most powerful men in the country and had a reputation for violence. When he heard that I was refusing to approve payment he issued an ultimatum:

___”Pay or I will chase you and your people out of the country.”

I refused.

The shareholders met and voted Econet Wireless Nigeria out of management. They cancelled our management contract. James Ibori and his colleagues personally attended the meeting to remove us. After the meeting one of them (a prominent local businessman even today) came up to me and said: “Unfortunately for you, God does not have a vote.”

I had to withdraw all my staff and their families: 200 people in all. We left Nigeria.

Most of our people had to be retrenched. The loss of the contract almost drove us to bankruptcy as a group.

They invited a big international operator to replace us as technical partner and operator. They changed the name of the company from Econet to V-Mobile.

Within days of their arrival, the managers of the new operator signed off the payments demanded as bribes.

Then what happened?

A few noble Nigerians had both the integrity and courage to carefully collect all the documentation on the movement of the money, and pass it all on to me.

___There’s a saying worth remembering in uncovering the trail of destruction that is corruption: “Follow the money”…

I bided my time… then I wrote a letter to the United States Department of Justice!

It was 2003.

Strive says that he has more to share, so I suggest that you keep his Facebook page on the lockdown. Here is the Source. The comments will interest you too. There are 963 of them as at press time.

23 comments

  1. His real name is “Strive”?! That’s a strange one. Anyway, I find it interesting how easily he drops James Ibori’s name, yet is afraid to name the Lagos State counterpart and the others demanding the rest of the $9 million. A half truth is as good as a lie. If he’s not ready to talk, he should shut up!

  2. Interesting,but like somebody already stated he should be ready to tell the whole truth and nothing but the truth,if he waited all these years to spill the beans half measures are not good enough..

  3. I’ve been reading his Facebook page and the other bits of information and advice he’s been dropping there. If anyone tells me they are a “Commission Agent” I know it isn’t necessarily an honourable thing!

  4. I’m guessing the reason he named James Ibori is that he may have been the one demanding the most money. Mr Masiyiwa says: “I was told that our company must pay a total of $9m to senior politicians (in State government).”

    Was the singular an error or deliberate? I don’t know. However it would be safe to deduce that, as Ibori was demanding half as his “personal share”, it could very well be that others in state government were not as aggressive or confrontational in their approach for the money.

  5. This is really shocking to me.
    I don’t have any comment to make now. I’ll wait till the bomb explodes to see how many casualty would be recorded before making any serious comment.

  6. Strive M.—I’ve been seeing his name around on Facebook for a long time. Never knew who he was till now! It’s good to follow Mobility o!

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  7. he’s from Zimbabwe, Southern Africans have some funny “English” names (just like our South South brethren)

  8. Whether or not he drops the full information, doesn’t deny the fact damage done by corruption. Apparently, he can name Ibori because he is in jail. To avoid libel, he’d have to give proof.

    Half truth or not, at least someone is talking. Many have collected bribes and kept shut to the detriment of a nation.

  9. you assume he knows the identities of the other individuals. the major reason why Ibori is in jail today isn’t his corruption, he’s one of many, it’s his brazen attitude. he has no sense of decorum or diplomacy and he’d be the one to press such a claim in person. if the other “senior politician” was Tinubu, he’d not ask in person

  10. he didn’t collect bribes though, he was asked to pay bribes. no one who engages in graft talks about it, that’s why there’s a shroud of secrecy about corruption

  11. The same corrupt practices that drove the final nail in the coffin of NITEL. I used to wonder why ECONET did so poorly in the early days of GSM in Naija with all the vast opportunities opened at the time, allowing MTN to fleece Nigerians at will. I guess these stories of underhand payments and extortion should not come as a surprise to any one.

  12. I have followed Strive Masiyiwa for a while and any one who has doubts should read through his previous Facebook posts and see how he has repeatedly turned down bribe requests. He has the right to release the information when ever he wants to and rather than attack him, appreciate him for coming out to say it as it is.

    At least we know that v mobile authorised payments of bribes and he has proof backing the money trail.

    I’m looking forward to the next part.

  13. the government in power might be the reason; when you have a government that frown at corruption, people will openly come up with their grieviances without being intimidated.

  14. I’ve known a part of this story before now. Everyone finding fault with his naming Ibori and not “others” are just being naive. He isn’t stupid at all. Far from it, this is a very wise man that hobnobs with the likes of Bill Gates. Remember he’s still pursuing his case against Barti Airtel in Nigerian courts…

  15. Anyway, the next installment has been published on Dr. Masiyiwa ‘s Facebook page. Go and read up.

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