In 2016, the Senate Committee on Banks, Insurance and Other Financial Institutions probed how MTN, between 2006 and 2016, allegedly repatriated about $13.9billion from Nigeria after side-stepping the due process for issuing Certificates of Capital Importation (CCIs) within 24 hours of conversion. On August 29 this year, the CBN came out with the report of its March 2018 investigations into the matter. The report indicted MTN and four banks (Standard Chartered Bank, Stanbic-IBTC, Citibank, and Diamond Bank) for being complicit in alleged remittance of foreign exchange using irregular CCIs issued on behalf of some of its offshore investors. The CBN spokesperson, Isaac Okorafor, said the transactions violated the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, 1995 and the Foreign Exchange Manual, 2006.
Below are the 7 perspectives that have emerged since those fines were slammed
1. Dissuade FDI
There is the argument that given that MTN is a leading player and major employer in the sector, the action of the CBN will slow down investment and ultimately dissuade foreign direct investments (FDIs) to the entire economy.
2.Economy could contract
Within the same line of argument as the above, some other analysts have suggested that the economy will be impacted by the action and may result in a contraction. They opined that “if telecom has not grown in Q2, we would have recorded a contraction. If it fails to grow in Q3, and others do not grow, we may record a contraction in Q3.”
3. Part of face-off with South African companies
Some analysts especially in South Africa have suggested that it is a continuation of a fight against Nigerian firms with South African affiliation. Some have come under attack by the Nigerian government lately, especially the on-going battle between the Consumer Protection Council and DSTV, another major South African brand.
4. Where was CBN for 10 years?
Some Nigerian analysts have also suggested that if indeed the accusations are correct, it is impossible to have sustained such massive capital repatriation without being aided of the central bank. Such analysts claimed that the CBN has not fully disclosed its culpability in the 10 years of the alleged repatriation.
5.When will MTN be listed on NSE?
Listing on the Nigerian Stock Exchange was one of the bait MTN used to convince the Presidency to approve the cut in its fine after the 2015 hammer. The firm promised to enlist its shares on NSE, just as it has done in the Johannesburg Stock Exchange (JSE) in its South Africa country home. The seemingly foot-dragging by the telecom giant may have irked the Nigerian government, hence the CBN hammer.
6. Why MTN may not quit Nigeria
Some investors are of the strong view that MTN is probably not going to leave Nigeria because of this. The matter will be settled somehow as such matters always are. The damage to the perception of Nigeria as an investment destination will, however, not be so easy to repair.
7.It could make MTN’s competitors to smile
Some experts have said this debacle could demoralise and limit the capacity of the largest network in Nigeria from providing and maintaining quality service delivery as it may not be able to invest in network expansion or upgrade. This fine could be to the advantage of MTN’s competitors.
Author: Theophilus Abbah
I’m a journalist, writer, researcher and trainer. My life’s ship has docked in the island of journalism in the last two decades where I’ve snaked through all its compartments – from reporter to newspaper editor. I’ve studied volumes of other people’s writings on Forensic Linguistics and propounded what I’ve titled ‘the language of terrorism.’ I’m expecting an award of a PhD in English Language from the University of Abuja soon in order to console me for my daily sweats and sleepless nights.