Stop demonising MTN

We recall that in 2001 when the Nigerian government put up four GSM licences for auction and invitation were sent to ‘super telecom’ companies in the US and the UK that had been the subjects of President Obasanjo’s ‘shuttle diplomacy’ between 1999 and 2001,  these ‘super telecom’ companies declined to participate in the auction.  They cited reports of various studies by telecom research agencies, the global financial institutions like the World Bank and the International Monetary Fund (IMF), and consulting bodies, which forecasted a very slow growth for the Nigerian telecom sector. Some of the reports alleged that the average Nigerian could not afford to own a mobile phone as the per capita income of the citizens was below the internationally recognized average and the daily income was below the $100 mark. One particular one forecasted that it would take up to twelve months for any operator to get 100,000 subscribers; 3 years to connect 300,000 lines and 5 years to reach 500, 000 subscription rate.

However, MTN – a South African Black Empowerment company, Econet, a Zimbabwean firm and later Globacom, were not discouraged. Unlike the Western telecom companies that vowed never to touch the Nigerian market even with a 10-metre pole, these African champions braved the odds, took great risks and paid $285 million for each of the licences – a fee derided by many western and local analysts as excessive and unwarranted. So sceptical were the investment community and even some Nigerians that MTN could not get Nigerians to take up the 30 percent equity it reserved for Nigerians. The MTN group was thus forced to take up 76 percent equity in MTN Nigeria.  In fact, a Nigerian fronting for one of the bidders of the GSM licences had earlier pulled out of the bid on the grounds that paying $285 million for a GSM licence made no business sense in the Nigerian environment.

Upon securing the licences, the firms proceeded to make huge investment in non-existent telecom infrastructure in the country.  As at the last count, the operators have cumulatively invested over $34 billion to build telecom infrastructure which is powering national growth and development across Nigeria. One of these firms – MTN Nigeria – stands out for its aggressive investment and belief in the Nigerian market.

Success was also swift, matching the level of risk taken by the firms. Today, because of its aggressive and huge investment in the Nigerian market, MTN Nigeria has grown to become the jewel of the MTN Group. MTN Nigeria is also contributing massively to the Nigerian economy. Since it came to Nigeria, it has directly or indirectly employed more than half a million Nigerians and has paid not less than N1.6 trillion in taxes to the Nigerian government. It has also contributed billions of Naira to various projects in the country through the MTN foundation.

However, MTN’s success in Nigeria has become its greatest undoing.  In a case of attempting to snuff life out of the Goose that lays the golden eggs, regulators, various government agencies and the Nigerian government itself have been competing with themselves to demonise the company and destroy its brand equity in Nigeria. True, no company is permitted to flout the country’s rules in the course of doing business in the country and the government and the necessary industry regulators must ensure strict compliance of extant rules and apply sanctions where necessary. However, the government must not consistently vilify a company doing legitimate business in Nigeria in such a manner as to scare off potential investors, especially at this time when the Nigeria is desperate for investors and is doing everything to attract them.

The recent episode is the outlandish claim by Senator Dino Melaye who accused MTN Nigeria of illegally repatriating over $12 billion outside Nigeria between 2006 and 2016, violating the Foreign Exchange (Monitoring and Miscellaneous) Act in the process. He also named Okechukwu Enelamah, the Minister of Trade and Investment and four Nigerian banks of complicity. Despite preliminary fact checks showing the accusation to be patently false and unsustainable, the Senate has gone ahead to constitute a committee to investigate the accusation, giving it primetime media coverage and continuing the tradition of media trial against the company of late.

Despite the low ratings of the country on the ease of doing business index (Nigeria ranks 169th out of 189 countries surveyed), the reality of companies and factories closing shop due to the harsh business environment and scarcity of forex, huge revenue loss due to declining price of oil and loss of tax revenues from departing firms, and despite Nigeria loosing huge foreign investments as a result of the government’s unclear and unfavourable policies, the government has continued to demonise perhaps, one of the only few successful companies that have showed their determination to do business in Nigeria’s difficult environment and contributing to both government revenue and the economic development of the country. Pray, how do you convince investors to return to or even come to a country where one of the few successful foreign businesses is being vilified daily and unduly harassed by the government and its parastatals?

This cannot be in the interest of the country. The government must work to improve Nigeria’s business environment and must be seen to be doing all to attract badly needed investments into the country and not repelling them by demonising the very few that have remained despite government’s shambolic management of the economy.