Investors remain edgy over Nigerian investment climate ahead of MTN/CBN court hearing
THE SCHEDULED OCTOBER 30TH 2018 court hearing for the CBN/ MTN issue draws near, investors and industry watchers remain on edge in anticipation of an amicable resolution to the case that has swept the media space in the last 2 months.
Zainab Ahmed, Nigeria’s minister of finance admitted in an interview that the series of sanctions levelled against ICT company, MTN Nigeria is currently maligning the country’s reputation in the international community.
“The MTN incident was a very damaging one for us. That was one of the reasons why we have been out trying to engage investors”, she said at the 24th Nigerian Economic Summit Abuja on Tuesday, 23rd October 2018.
The telecom company and four banks (Standard Chartered Bank, Citi Bank, Stanbic IBTC Bank and Diamond Bank) have been embroiled in a protracted back and forth, with the Central Bank of Nigeria and the office of the Attorney-General demanding over $10billion for alleged illegal repatriation of dividends as well as tax defaults.
The minister gave reasons for the sanctions, explaining that “there is a tendency for big business to take regulations and governments for granted.” She continued fur- in her explanation stating that “After that incident happened, all the information the CBN has been trying to get in two months actually came. Now, they have almost solved the problem.”
This news has caused a public outcry especially on social media where the news broke early Wednesday morning. Many users have perceived this as a halfhearted acceptance of error by the government. “Nigeria is considered a high-risk country especially after the MTN debacle, investors are not very keen on exposing their investments to state volatility”, @FakhuusHashim, an influential social media user stated emphatically.
Furthermore, the comments by the finance minister contradict the actions and statements of the CBN in the past. During a 2016 Senate investigation into alleged violations of the Foreign Exchange (Monitoring and Miscellaneous) Act by MTN, the bank regulator, in sworn testimony said that the company was not in breach of any provision of the law with respect to the Certificates of Capital Importation, in effect, concurring with the company.
Funso Aina, MTN Nigeria’s public relations manager in a statement issued in August confirmed the company’s position, clearly stating that MTN has been cooperating with the government and all necessary information required had been provided by the telecommunications company and these have been exhaustively reviewed and cleared in 2016/2017.
In a following statement issued by the company in September, the company further stressed these points and its historic engagements with the Nigerian authorineurship ties.
“It is both regrettable and disconcerting that despite the historic engagements with the Nigerian authorities by MTN Nigeria, the Senate investigation into the CCI matter, and the multiple tax assessments done by the Nigerian tax authorities over many years that were satisfactorily concluded, that these matters are being reopened.”
Ahmed has allayed any fears by pointing out that this scenario will not be repeated with other organisations.
“We are trying to make sure this doesn’t happen again, we are continuously discussing with monetary authorities.
There will be no company next after MTN, nobody is next because we can’t afford for this kind of incidence to keep happening,” she added.
The pending civil cases will be heard on the 30th of October and 8th of November for the matter with the Central Bank of Nigeria and the Attorney General of the Federation respectively.
There is a tendency for big business to take regulations and governments for granted
L-R: Emeka Emuwa, chief executive officer, Union Bank; Nike Akande, former minister of industry; Adekunle Sonola, head, commercial banking, Union Bank; and Lola Cardoso, chief digital and innovation officer, Union Bank, at the opening ceremony of the edu360 fair organised by Union Bank in Lagos