Sep 6, 2018

CBN, AGF Vs. MTN – A template for killing FDI in Nigeria




The directive by the Nigerian Federal Government via the Central Bank of Nigeria to MTN to repatriate $8.13 billion, illegally taken out of the country is a direct assault on the attraction of foreign direct investment to Nigeria. The matter is further compounded by the directive of the Attorney – General of the Federation to MTN to pay a fine of $2bn in tax arrears on imported equipment and payment to suppliers.


These new directives by the Nigerian government have been widely observed by industry experts and members of the foreign community as a shake down by the government. The Nigerian Telecommunications Industry contributes about 11% to the country’s GDP and these directives only to seek to cause unpredictable ripples in the industry as MTN, one of the biggest players is now probably considering its long – term business goals and relationship with Nigeria.

According to the CBN, the first error was when the Certificate of Capital Importation (CCIs) at the time of investment by MTN Nigeria showed $59.436 million as shareholders’ loan and $343.153 million as equity, but turned to $399.594 million as shareholders’ loan and $2.996 million as equity investment as at December 2017. Contrary to the CCIs issued by Standard Chartered Bank Limited, Citi Bank and Diamond Bank, which constituted a rendition of false returns to the CBN.

MTN on its part has denied the allegations and stated categorically that the company has committed no wrong. The South African company also states that the transactions in question were handled to the letter of the law and were eventually cleared by the CBN and the National Assembly upon its investigation.

According to Bismsark Rewane, the impact on MTN and its investors’ funds will be monumental. The market capitalization of MTN in the Johannesburg Stock Exchange is $10 Billion, therefore the government is asking MTN to remit 80% of its market capitalization. Furthermore, MTN invests upto $2bn in the Nigerian telecommunication industry every year, which makes up about 54% of the entire industry.

Furthermore, MTN lost 881,586 subscribers between June and July, according the latest industry statistics released by the Nigerian Communications Commission (NCC)

This is not the first of MTN’s challenges in doing business in Nigeria, three years ago, the telco, which has the dominant share of the mobile telecoms market in Nigeria, was slammed with a $5.2 billion fine for failing to disconnect 5.1 million subscribers after the registration deadline.

 It is important to note that these fresh sanctions to MTN will gravely impact Nigeria’s productivity, which is currently at -0.4% which will lead to a major slow down on investments in this industry resulting in a direct blow on Nigeria’s ability to attract Foreign Direct Investment into the county.

Nigeria prides itself as one of the biggest economies in Africa but continues to fail in providing a conducive environment for businesses. Some of the companies that have withdrawn investments in Nigeria include Sun International and recently Etisalat UAE.




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