Telecom giant MTN is reportedly planning to divest part or all of its $243 million stake in Jumia, Africa’s largest e-commerce platform. This strategic move aims to generate capital for debt reduction and expansion into new markets. The potential sale follows a significant recovery in Jumia’s share price, which surged by 142% this year after a major dip in 2019. While the plans remain private and no final decisions have been publicly confirmed, sources close to the matter indicate that this aligns with MTN’s broader corporate strategy.

Jumia has long been identified by MTN as a non-core asset within its business portfolio. The proposed sale forms part of MTN’s extensive $1 billion three-year asset-disposal program, which underscores the company’s commitment to optimizing its asset base and focusing on its core operations. The recent surge in Jumia’s share value presents an opportune moment for divestiture.

Founded by Sacha Poignonnec and Jeremy Hodara, Jumia has solidified its position as Africa’s leading e-commerce company, operating across 14 countries, including Nigeria. The company achieved a valuation of over $1 billion upon its listing on the New York Stock Exchange. However, its share price later fell below the initial public offering price following revelations of corruption within its Nigerian branch, temporarily costing the company its unicorn status. The recent rebound in share value represents a crucial turnaround for the platform.

This asset disposal plan is not an isolated event for MTN. The company has already divested its tower holdings in Ghana and Uganda, selling them to American Towers Inc. These previous sales have enabled MTN to generate 14 billion rands (approximately $812 million) from various asset sales. Moreover, reports suggest that MTN may also consider selling its 29% stake in IHS Towers, signaling a comprehensive review of its investment portfolio.

In contrast to its plans for Jumia, MTN has made notable progress in strengthening its presence in other key markets. Recently, the company secured a 12-year extension for its telecommunications license in Uganda. According to Wim Vanhelleputte, MTN’s chief executive officer for Uganda, negotiations for this critical license were extensive, beginning in October 2017 and concluding in June 2020. The new license was acquired at a cost of $100 million for 12 years, a sharp increase from the $6 million paid during the 1998 international bidding process.

Beyond licensing fees, MTN has committed to major investments in Uganda’s telecommunications infrastructure. The company plans to invest over $300 million (Shs1.1 trillion) over the next five years to expand its network coverage from 70% to 90% of Uganda’s landmass. Additionally, MTN Uganda is required to go public on the Uganda Securities Exchange, offering 20% of its shares within 24 months. Following this successful license renewal and strengthened foothold in Uganda, MTN now aims to explore new markets, with plans to bid for a license in Ethiopia, one of the largest un-privatized telecommunications markets in Africa.