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MTN Resolves Issues in Nigeria

In mid-January, MTN announced that it had settled a major matter in Nigeria, relating to $2-billion in back taxes. This crisis, one of many in that country, went back to September 2018, when the Attorney General of Nigeria made a number of spurious (in my view) claims about MTN Nigeria's historical financial accounts and tax contributions. At its root, the matter is fuelled by local interests in Nigeria, that view MTN as a foreign group that makes "too much money".

Yet Nigeria is desperate for more foreign investment. You will recall that MTN has pumped hundreds of billions of Rands into building a modern telecommunications network in that country, often under difficult conditions. Despite that, Nigerian authorities have routinely hit them up for extra cash, including slapping fines on them for breaches of customer registration rules.



Now the relationship seems to have taken a turn for the better, after a meeting between senior MTN executives and Nigerian President Muhammadu Buhari. No sooner had the meeting concluded than the Attorney General announced that "following careful review and due consultation with relevant statutory agencies" (in other words a phone call from the President), a decision had been taken to resolve the issues.

MTN promptly agreed to invest $1.6-billion to strengthen and expand its networks and systems, as well as formally withdrawing a case it made challenging the jurisdiction of the Nigerian Attorney General to charge it with those back taxes in the first place. It will also accelerate its Mobile Money (MoMo) project there, having finally obtained a deposit-taking banking licence.

With that problem out of the way, all MTN needs is for the SA economy to rebound, for the SA Competition Commission to get off its back, for the useless SA Minister of Communications, Telecommunications and Postal Services to allocate it adequate spectrum to operate and for a peaceful revolution in Iran. That's asking too much I suppose? With 245 million customers, this ought to be one of the most valuable businesses in the world, but it is held back by political meddling and incompetence in the countries in which it operates. MTN's share price continues to languish at R82.83 per share. We remain ever-hopeful.


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