Is the standoff between MTN and Nigeria good for Africa?

365

With talks to resolve the $3.9 billion fine slapped on MTN by the Nigerian authorities stalled, some pundits are calling on MTN acting executive chairman, Phuthuma Nhleko, and his team of executives at the Fairlands-based mobile phone giant to throw in the towel.

However, the broader debate should focus on whether the standoff between MTN and Nigeria is good for Africa? By Gugu Lourie

At the moment, commentators in the mobile phone sector are generally allowing “gatekeepers” to control their cognitive maps.

They are keeping the focus on individuals and instead of the bigger picture – which is that Africa is lagging behind in development.

Despite the lapse that led to the Nigerian authorities slapping MTN with the record fine, MTN remains one of the major telco’s that is spearheading the development of the continent and vaulting Africa and the Middle East into the modern age.

The question therefore should be, in whose interest is the demise of MTN in Nigeria likely to serve?

MTN Nigeria
MTN Nigeria has been hit with a giant fine for failing to comply with the country’s regulations. Reuters/George Esiri

Only the wonks will be happy if MTN, as an Africa and Middle East mobile phone giant, is wiped off from the list of the biggest cellphone firms in the world.

Maybe, in their myopic views, the Nigerian authorities want to prove a point that they can stand up to South African firms.

Nigerians can show MTN who the “real boss” is now. It’s all well and good for the Nigerian authorities to flex their muscles and exercise their sovereignty, however this will slam the brakes on the progress of the African continent.

In hindsight, Nigeria was not as harsh when global oil giant Shell was found to have collaborated in executing writer Ken Saro-Wiwa and eight other leaders of the Ogoni tribe of southern Nigeria.

The oil giant settled with the Nigerian authorities and paid a meagre $15.5 million.

Maybe it’s time, South Africans and Nigerians stop being business rivals – after all they are all Africans.

The quicker they work together the sooner they will mutually benefit and grow their companies and economies in unison.

It’s a shame the South African government has so far shied away from tackling the issue.

Could it be that MTN is not important to the SA government? Or is the aloofness aimed at protecting the telco’s former chairman and now South Africa’s Deputy President Cyril Ramaphosa from being seen as interfering with a market matter.

Perhaps, local SA politics have rendered important assets like MTN irrelevant to the government.

Why can’t South Africa President Jacob Zuma and his counterpart Muhammadu Buhari, the President of the Federal Republic of Nigeria, show progressive leadership?  Zuma and Buhari are duty bound to ensure that the MTN-Nigeria battle is resolved as quickly as possible.

It has been in the public eye for close to six months with no possibility of a solution and is not a good brand positioning of Africa’s economy.

Personalising the issue to Nhleko and branding him as a “saviour” who may be able to reduce the fine is not helpful.

The appointment of a new CEO for MTN might not necessarily be the panacea.

Phuthuma Nhleko
Phuthuma Nhleko, MTN’s executive chairman

Furthermore, it might not be correct to blame the Nigerian authorities for delaying the solution on this dispute.

That said, however, my assertion is that the standoff is not good for either MTN, South Africa, Nigeria or the rest of the continent.

The more it drags on; the more the impasse plays itself the way the wonks want – a reclassified Africa – the “Dark Continent”.

Granted, the rule of law must reign supreme, but an evaluation of the effects of draconian action is a prudent thing to do. Nigerian authorities must finalise the fine to be paid by MTN.

The quicker they quantify the amount the better for Africa’s future and the sooner MTN can go back to fulfilling its mandate in Nigeria of providing telecommunications services to its customers. Before executive chairman Sifiso Dabengwa resigned in December, MTN was hit with the massive $5.2 billion fine – later reduced to $3.9 billion.

When Nhleko took over on a six-month contract he wanted to find a calculated compromise acceptable to all involved. He even initiated a R3.8 billion (50 billion Naira or $250 million) payment as part of the $3.9 billion settlement.

This was a clear indication that MTN was prepared to engage with the Nigerian authorities and show that MTN respects the rule of law in Nigeria.

If the Federal Government of Nigeria didn’t agree with the move, they shouldn’t have accepted the payment.

It is disappointing that Nigeria has ‘suspended’ talks with MTN without finding an amicable solution to the dispute.

That said, it is important not to brand Nigerian authorities as incapable leaders.

But the protracted dispute begs the question: “Who benefits from the debacle?”

Besides, is the delay in finalising the fine good for Nigeria’s investment profile?

MTN logo
MTN

Considering that Nigeria is now the biggest economy in Africa – a yardstick for assessing investment in the continent – is the confusion around the MTN fine good for Africa?

These questions need urgent answers.

As a possible consequence, MTN may be pressured into restructuring its leadership.

MTN could end up with a global CEO with experience in running telcos in Europe and Americas, but with limited knowledge of doing business in Africa and the Middle East.

This could inadvertently push MTN deeper into serious problems.

MTN should think carefully before employing a leader from outside the continent.

For now, only an executive from Africa will take this company to the next level. It doesn’t matter if he is South African, Ghanaian, Nigerian or Zimbabwean, what’s important is that the person understands Africa and the Middle East and where MTN wants to go.

Nhleko, who is doing a second stint at the helm of MTN, is more than capable as a chairman.

If discussions around the MTN fine take any more time the delay will be comparable to the search for the Nigerian girls kidnapped by Boko Haram. Both the missing Nigerian girls and MTN fine are important for the future of Nigeria and the rest of the continent.

MTN Digital World
MTN Digital World

Currently, they both symbolise the lack of execution in decision making by Africa’s biggest economy. The 276 school girls were kidnapped as they were attending evening school in Chibok in the Borno State on 14 April 2014.  So far only one of the more than 200 girls has been rescued.

Sometimes Africans are left disadvantaged because their leaders made decisions that do not benefit their countries’ economies.

MTN and the Nigerian authorities need to find each other quickly. And the South African government must enter the fray to sort out this matter for the sake of Africa’s growth.

If a solution is not found soon, it would be hard to escape the conclusion that Zuma and Buhari don’t care about Africa’s Renaissance.

Nonetheless the truth is, a weak MTN is not only likely to affect South Africa’s economy, but will also hit investments and jobs in various African countries.

Meanwhile brand MTN and Nigeria continue to suffer immeasurable losses.

MTN needs Nigeria and Africa’s biggest economy needs the investment of the continent’s biggest mobile phone operator.

A truce will be good for all involved.

LEAVE A REPLY