Is Nigeria Kicking Itself In The Foot With Another MTN “Scandal”?

Did MTN in Nigeria breach corporate governance issues?

MTN Store (Delareyville Sellular)
MTN Store (Delareyville Sellular) (Photo Credit: Wiki Village)

Nigeria’s government risks damaging its investment climate with its Central Bank demanding $8,1 billion (R115 billion) allegedly paid as a dividend to MTN to be refunded to it. The move seems like an uninspiring way of encouraging any would be investors to see Nigeria as a destination for investment.

In the short-term, the $8,1 billion (R115 billion) which is being demanded by the Nigerians, over claims the money was taken out of the country unlawfully, could be the quickest way to get funds for the central bank. 

The Nigerian economy is struggling to recover from its first contraction in a quarter century in 2016 when the price and output of oil fell the most in decades.

The seemingly continuous attacks on MTN by the Nigerian authorities may spook investors. 

In 2016, MTN was slapped with a $5.2 billion fine, which was later reduced to $3.9 billion and is still paying the Nigerian authorities.

Allegations and claims cannot continue to emerge every time Africa’s largest mobile phone operator stabilises its business in Nigeria and when the country’s economic growth stumbles. 

MTN is one of the biggest investors and employers in Nigeria and deserves certainty for its investment in the country.

It is possible, the underpressure Nigerian government sees MTN as a quick way to get much-needed income for its fiscus.  Or is it a case of them wanting to prove a point that they can stand up to a South African behemoth?

I am in no way suggesting that the rule of law must be sidestepped if the allegations are true. That said, maybe MTN deserves what is happening to it in Nigeria. 

Is it possible that the mobile phone operator is abusing its power and not adhering to corporate governance issues? 

The company’s past doesn’t really paint a great picture. Its previous executives failed to adhere to subscriber registrations regulations, which resulted in the $5.2 billion fine being imposed in 2016.

One hopes that the new allegations are not true. 

The big question to ask is: why so many issues of wrong-doing keeps on cropping up for the company or does it comes with a territory of being a giant global company?

Either way, the standoff between MTN and the Nigerian authorities is not good for anyone. 

Today, the company’s share price crashed more than 23% after it confirmed that the Nigerian authorities were demanding the $8.1 billion allegedly taken out of the country illegally to be paid back to its central bank.

This could scupper MTN’s plans to list its Nigerian operation on the Nigerian Stock Exchange, which was expected by the end of the year. MTN agreed to the Nigerian Stock Exchange initial public offering as part of the settlement of a fine imposed by regulators in 2016.

The latest allegations also impact various banks including Standard Chartered was fined 2.4-billion naira ($7.86m), Stanbic IBTC Bank 1.8-billion naira, Citibank 1.2-billion naira and Diamond Bank 250-million naira.

We’ve known all along that Nigeria is a tough market to do business. But up to this point that hasn’t mattered much. 

Maybe its time for MTN to think hard about whether it still makes sense for it to continue being invested in Africa’s biggest economy.

On the other hand, the Nigerian authorities may have to make it clear that MTN is no longer needed in the country.
Some pundits may say this will be a knee-jerk reaction from both sides.

While this might be true but the past few years have proven that there is serious animosity between MTN and the Nigerian authorities. A clearer direction of what needs to happen will be good for everyone.

I have stated before that MTN needs Nigeria and Africa’s biggest economy needs the investment of the continent’s biggest mobile phone operator. For more read: Is the standoff between MTN and Nigeria good for Africa?



  1. Hi Gugu Lourie,
    Interesting reading your write up. It seem – from your point of view- that id doesn’t matter if the allegations against MTN is true, hence MTN’s wrong doing(if any) should not be punished but ignored for the sake of foreign direct investment. Am I correct?

    • No you are not correct. I am saying if MTN is guilty executives must be punished and the money return back to Nigeria. I don’t support corrupt corporates. I have stated in the piece: “I am in no way suggesting that the rule of law must be sidestepped if the allegations are true. That said, maybe MTN deserves what is happening to it in Nigeria.”

  2. Nice piece Gugu. What does this mean to MTN’s listing in Nigeria? Is the listing now going to be put on hold by MTN? The situation is getting ugly in Nigeria.

  3. This is political. You asking valid questions. I wonder who is telling the truth: MTN or the Nigerian central bank?

  4. Why would MTN be accused of abusing exchange control issues? We all kn ow how stringent are our exchange rules. So, this doesn’t make any sense at all. Central bank of Nigeria must provide more information.

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