Friday, December 6, 2024
Home > Analysis & Opinions > MTN Uganda, Stanbic Bank Maintain Supremacy As Top African Companies
Analysis & OpinionsEntrepreneurship

MTN Uganda, Stanbic Bank Maintain Supremacy As Top African Companies

MTN Uganda Chairman Charles Mbire

The latest annual survey by South Africa’s African Business Magazine on Africa’s Top 250 Companies has again ranked MTN Uganda as the 5th most prominent company in East Africa and the 102nd position in Africa, an improvement from the 105th position attained last year, with a market capitalization of more than US$1bn.

Stanbic Bank Uganda has been ranked in the 224th position with a market capitalization of US$ 285mn. This is a drop from the 215th position with a market capitalization of US$357mn last year. MTN Uganda and Stanbic Bank are the only two Ugandan companies featuring high on the list.

Speaking about the consistent stellar performance, MTN Uganda Chairman Charles Mbire attributed it to above board policy, resilience of management and staff and prudent best practices of the company.

“MTN stands out to be counted as Uganda’s top tax payer and employer. Last year MTN announced a record payment of Shs 839 billion as taxes reaffirming its position as the top tax payer.  We are going all out to change many lives through innovations that empower people to earn a living. We are proud to be recognized at the continental level in terms of the value we offer to our customers and also the various stakeholders. We owe this accolade to our customers and the conducive business environment Uganda provides” Mbire said.

Seventeen East African firms are among the list of the continent’s most valuable brands, with the Safaricom retaining the top spot amidst a decline in its overall ranking.

The latest annual survey by South Africa’s African Business Magazine on Africa’s Top 250 Companies ranked Safaricom in the 25th position with a market capitalization of US$5.47bn. Last year, Safaricom ranked 12th with a market capitalization of US$ 11.89bn.

Tanzania Breweries Ltd, Equity Holdings Group and East African Breweries Ltd have been ranked 77th, 83rd and 101st position with a market capitalization of US$ 1.37 billion, US$ 1.29bn and US$1bn, respectively.

Other companies in the Top 250 companies are; KCB Group (US$861mn), NMB Bank (US$748mn), Vodacom Tanzania (US$737mn), Tanzania Cigarette Co (US$726mn) Co-operative Bank of Kenya (US$582mn), Absa Bank Kenya (US$525mn), Standard Chartered Bank Kenya (US$485mn).

Others include; British American Tobacco Kenya (US$ 350mn), Stanbic Bank Kenya (US$328mn), Tanzania Portland Cement (US$311mn) and I&M Holdings (US$260mn) are the other companies that have made it to the list of Top 250 companies in Africa.

The African Business Top 250 Companies survey focuses on the biggest companies, with the ranking determined by the market capitalisation (total value of the listed shares). The market capitalisation is converted into US dollars on the same date.

The companies must be listed on the national and regional stock exchanges across Africa and make huge profits and invest in Africa-wide strategies to seize future opportunities.

Overall, the market capitalization for the Top 250 biggest listed companies declined considerably since the 2022 survey, from $701bn to $561bn, and is well below the record $948bn achieved in 2015.

The 2022 figure represented, however, a strong recovery from the low of $556bn recorded in 2020 at the height of the Covid-19 pandemic. Many companies enjoyed a temporary bounce from the release of pent-up demand.

Yet this year’s market capitalisation has drifted below the lows of the pandemic – and much more needs to be done to support the growth of a vibrant private sector across the continent.

According to a recent McKinsey study, of the 438 African companies with revenues in excess of $1bn, 60% were privately owned and 25% were subsidiaries of foreign-domiciled multinationals.

The continent’s biggest oil firms, such as Sonatrach from Algeria and Sonangol from Angola, would be among the very largest companies if they were listed. The Angolan government has pledged to list Sonangol on the Angola Stock Exchange, but the timetable for this has repeatedly slipped and the current target date is in 2027.

The lion’s share of this year’s decline is due to big drops in the value of South African stocks, from $488bn to $375bn over the past year. The position of South African companies within the pan-African corporate landscape is particularly interesting.

Stock values on the Johannesburg Stock Exchange (JSE) have tumbled in dollar terms over the past year through a variety of factors, including the falling value of the rand; the underlying weakness of the South African economy; and the impact of low infrastructural investment on power supplies and transport reliability. This is reflected in our survey, with the number of South African entries in our Top 250 falling from 133 last year to 96 in our 2023 rankings.

However, it is important to note that cyclical fluctuations in demand for mining commodities have also played a role. Commodity prices soared as the Covid-19 pandemic and associated lockdown measures were lifted, driving up the value of the mining companies that comprise a significant proportion of the JSE. For instance, the value of the highest-ranked mining company in our table, Anglo American Platinum, jumped from $11.3bn in March 2020 to $38.6bn in 2021 and then $36.4bn the following year, before crashing to $14.2bn this year, with its value mainly determined by wide fluctuations in global demand.

The total value of the Top 250 was also affected by several delistings, notably South Africa’s Massmart and Danone Centrale in Morocco. The lack of medium-term growth in the value of Africa’s biggest corporations is, however, also partly a function of general African economic trends, with the optimism generated by moderately robust growth in the first part of the new millennium giving way to more patchy growth punctuated by a handful of stronger growing economies.

The lack of progress is also reflected in the lack of strength in depth. The 250th position in the rankings was achieved with $394m in 2018; but that figure fell this year to the $229m valuation of Cleopatra Hospital in Egypt.

Despite continued weak economic growth in South Africa, the country’s 96 corporations listed in the continent’s Top 250 companies completely dominate it, taking 67% of its entire value, with combined market capitalisation of $375bn out of the $556bn total for the Top 250.

Nine of the top ten slots were filled by South African companies, with only telecoms company MTN Nigeria intruding into a perfect ten, while 15 out of the top 20 are South African. Of the remaining five, three are Nigerian and two Moroccan, which fairly reflects the balance of power in the overall table.

Internet and multimedia company Naspers leads the table with market capitalisation of $81bn, up from $50bn last year, although still down from a high point of $104bn in 2021. Naspers also has the highest net income by a long way, with $12bn, ahead of Anglo-American Platinum with $2.7bn. However, analysts have suggested that some of the company’s operations may have little room for growth in its domestic market.

Naspers moved to the top of the pan-African rankings in 2016 following the purchase of a 33% stake in Chinese tech and entertainment company Tencent – but now plans to sell off some of its stake to fund a planned share buyback.

Its stake in Tencent was worth about $100bn at the start of the year, but the company’s share price on the JSE lies significantly lower than its net asset value per share, because of its complicated dual system of voting rights, which reduce shareholder influence on the company’s operations.

It is easy to attribute big changes in market value to the circumstances in specific sectors or countries, yet the next two firms on the list have enjoyed very different years. FirstRand moves up one place to second, despite a big fall in value from $30bn to $19bn, with fellow South African bank Standard Bank rising two positions to third with $16bn, from $21bn last year, representing a far more modest fall.

South Africa’s continued dominance of the African corporate landscape obviously means that the rest of the continent appears – and indeed is – underrepresented in the rankings. North Africa accounts for 14.3% of the value, followed by West Africa with 11.4% and East Africa 3.3%.

The next biggest markets by combined market capitalisation are Nigeria with 9.3%, Morocco with 8.8% and Egypt with 4.7%. There is not a single entrant from Central Africa, and some individual countries are conspicuous by their absence, including Algeria, Ethiopia and the Democratic Republic of Congo (DRC). State control largely explains the first two, while many of the biggest economic enterprises in the otherwise underdeveloped DRC are foreign mining companies.

Considering companies in Southern Africa excluding South Africa, Mauritius is the next most important country in the Top 250, with six companies and 1.3% of market value, an increase of 2 percentage points. It is followed by Namibia with seven entrants and 1.2%, also up 2 points on last year. The remaining Southern African companies come from Malawi (7), Botswana (3), Zimbabwe (3) and Zambia (2). It might be expected that Zambia would enjoy stronger representation – but its large mining sector is dominated by foreign companies.

Leave a Reply

Your email address will not be published. Required fields are marked *