In November 2015 the African telecoms industry was shaken up by the Government of Nigeria’s decision to fine MTN a staggering $5,2 billion for failing to disconnect up to five million unregistered SIM cards in that country.
Just three months ago the figure was revised down to $1,05 billion which the telecom giant agreed to pay. The reduction of the fine sparked widespread debate in Nigeria with activists accusing their Government of accepting bribes to lower the fine, a claim the company and government denied.
Now the South African company has been hit with fresh allegations of money laundering up to $14 billion by the Nigerian government with its senate announcing its intention to pursue a full investigation into the issue.
It is alleged that MTN worked with Stanbic IBTC, Standard Chartered Bank, Citi Bank and Diamond to launder $4.87 billion, $5.72 billion, $2.98 billion and $0.35 billion respectively facilitated by Nigeria’s Minister of Industry, trade and Investment, Dr. Okechukwu Enelamah, who is both a medical doctor and chartered financial analyst.
Nigeria’s recent onslaught on MTN is quite interesting and speaks volumes of the cut-throat telecoms industry there. As of the 1st of September 2016, Nigeria has been in a recession, for the first time in 20 years. It has been said the Nigerian economy has suffered from weakening oil prices (oil constitutes 70% of government income) and years of rampant corruption.
Their President, Mr. Buhari, has time and time again reiterated his stern stance on corruption, reassuring the public of his commitment to dealing with any corrupt issues and officials from the top down.
This may be one of Buhari’s main targets, the MTN Group, in his anti-corruption campaign, and since MTN is a South African company, he may view it as a soft target, slowly pushing them out to create room for new local operators and existing ones room for growth.
News of the investigation has hit the company hard with shares dropping by 3.41% in just a day.
MTN has tried to get its act together since the initial fine was passed, even went as far as changing their CEO, after their former Zimabwean CEO Sifiso Dabengwa resigned under mounting pressure over the fine.
It seems as though this has not helped the operator’s situation in Nigeria with its government seemingly focused on damaging the company beyond repair.
Clearly MTN has to rethink its Nigerian strategy. If they were moving the money out in fear of it being forcibly taken by the government over the fine, it may backlash harder than they could’ve imagined.
2 comments
African way of doing business! Just kill, plunder, loot and grab any business by any means necessary, as long as you are in government, you make the rules and change them to suite your agenda or read them the way you like.
MTN must just sell its assets whilst they are still worth something even at a bigger loss. Oil prices are not going to recover any time soon!
The biggest consumer of oil ie US have just started exporting fraking oil to other countries. Britain, another biggest consumer also approved fraking and looking to invest more in its North Sea.
Russia and Saudi are flooding the markets, Iran took the handbrake off since sanctions were lifted and they are spraying oil everywhere.
Where does that leave Nigeria? A country which imports its own oil, how stupid is that?
The way the Nigerian government is focusing on MTN smacks of partisanship. All businesses employ these methods to move money out of unsafe and risky zones. They should include other businesses in their haul otherwise this is just them targeting one company that they do not like.