The MTN mud­dle

The cen­tral bank’s de­mand for an $8.1bn re­fund from the tele­coms gi­ant threat­ens wider reper­cus­sions

The Africa Report - - DOSSIER TELECOMS -

Just when the dust was set­tling and MTN was start­ing to pick up the pieces af­ter its $1bn fine in 2016, the Nige­ria sub­sidiary of the Jo­han­nes­burg­based tele­com gi­ant yet again finds it­self in a face-off with the Nige­rian gov­ern­ment. This dis­pute re­lates to the il­le­gal repa­tri­a­tion of $8.1bn to South Africa be­tween 2007 and 2015. The string of woes and the spe­cific tar­get­ing of MTN, a for­eign en­tity once viewed as a model cor­po­rate cit­i­zen, is bound to dent Nige­ria’s busi­ness cli­mate. It may scare off po­ten­tial in­vestors at a time when the Fe­bru­ary 2019 elec­tions are fast ap­proach­ing and the econ­omy is still reel­ing from the 2016 re­ces­sion. The cur­rent dis­pute, which also in­cludes a claim for more than $2bn owed in taxes, sent MTN’S stock tum­bling to its low­est level since 2009, wip­ing at least 36% off its mar­ket value. MTN, Africa’s largest wire­less car­rier, has re­jected both of the g ov e r nment ’s c l a i ms a nd i n Septem­ber, sought an in­junc­tion to pro­tect its as­sets. As The Africa Re­port went to press, the de­ci­sion by the Fed­eral High Court was still pend­ing. MTN Nige­ria’s long-de­layed ini­tial pub­lic of­fer­ing, which was part of the 2016 set­tle­ment, now hangs in the bal­ance. De­spite re­new­ing MTN’S com­mit­ment to list­ing on the Nige­rian Stock Ex­change (NSE), MTN spokesper­son Mimi Kalinda said these lat­est events would “po­ten­tially make it com­pli­cated” for it to hap­pen. This is not good news for the NSE, which could use a ma­jor boost. In Septem­ber, the eq­ui­ties mar­ket lost a to­tal of N624.4bn ($17bn), with a year-to-date loss of about 16%. The in­dus­trial, bank­ing and oil and gas sec­tors were hit the hard­est. With nearly 60 mil­lion cus­tomers in Nige­ria, MTN re­mains very pop­u­lar. Nige­ria is MTN’S big­gest African mar­ket, and com­pany lead­ers are con­fi­dent they will weather this storm. The car­rier bagged the high­est num­ber of awards, five in to­tal, at the Nige­ria Te ch In­no­va­tion & Tele­com Awards in La­gos last month, in­clud­ing Tele­com Com­pany of the Year and Tel­com CEO of the Year. Oheneba Ama Nti Osei

Con­sumers care less about tax scan­dals than good ser­vice

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