(Ecofin Agency) - According to a source in Amsterdam cited by the newspaper Zimbabwe Independant, Zimbabwe’s government has now taken over Telecel, the mobile operator. The State bought from VimpelCom, its 60% shares in the company for $40 million. This operation was conducted by the state-owned firm ZARNET, the Internet Service Provider who benefited from financial support of the National Social Security Authority (NSSA), pension manager accredited to invest.

The terms of the agreement between ZARNET and NSSA include a loan repayable over a 10-year period with a 7% interest yearly, and a 2-year moratorium. In the situation where ZARNET fails to respect any of its commitments within the agreed period, Telecom Zimbabwe’s 60% shares that the government acquired will directly be transferred to NSSA. With this acquisition, the government of Zimbabwe puts an end to its dispute with VimpelCom over the indigenization issue. Zimbabwe always asked, but to no avail, the telecom group to conform to the law that prevents foreign investors to hold more than half the shares of a local firm.

So here ends VimpelCom’s journey in Africa. In October 2014, the Amsterdam-based telecom group had already ceded assets of its Central African and Burundian subsidiaries to Econet Wireless. Zimbabwe was the last market where the group intended to remain active. But squabbles with the government back in 2014 arising from the issue of cancellation of its licence due to failure to renew, led to multiples penalties that jeopardized its sustainability in the country. Some of the local telecom actors identified the setbacks of Telecel Zimbabwe as the “foul” desire of the government to take over the firm.

Now that this is done, it should not be surprising to see the government attempt to get the remaining 40% of the company held by local investors via Empowerment Corporation (EC).