MTN has been present in Nigeria since august 2001 when it paid $285 million for the license to operate in the country. Since then, it has managed to maintain its status as the largest telecommunication company in Nigeria despite fiercer competition in recent times. Over time, MTN has had constant with both the Nigerian Communication Commission (NCC) and its millions of subscribers whom constantly accuse MTN of some shady tactics in its service delivery. Although these accusations might not be easily proven, one fact is sure, MTN has been accused of multiple corrupt practices over time ranging from Anti-competition charges in Nigeria and South Africa to bribery allegations in Iran. People might be tempted to crucify a company with such history at the slightest accusation, does that mean that the NCC’s huge fine on MTN is more of picking a target that is vulnerable due to populist beliefs against it? I hope to shed more light on this question during the course of this article.
A $5.2 billion fine seems to extreme especially to MTN executives whom keep claiming the broke no rules. This sounds silly considering that the NCC delivered streams of warnings to all Telecom operators in Nigeria. They warning entailed they operators disconnect all Sims that were not properly registered within a stipulated timeline, MTN vehemently disobeyed this rule. It is important to note that the disconnection wasn’t permanent as a subscriber would be reconnected when proper sim registration is done. More sympathy might be directed to the NCC when one realizes that their actions were for security purposes. Even with the NCC’s genuine consideration, one might believe that the fine was huge and a tactic by the Nigerian government to boost non-oil revenue considering the slump in oil revenue. This argument might be boosted with the knowledge that MTN was fined $5.2 billion which is about a quarter of the $22.6 billion annual budget of Nigeria.
So, is the Nigerian government trying to use fines to boost its revenue? The new Nigerian government has been harsher in terms of interpreting regulatory laws and with another South African company Stanbic IBTC also at the end of the government’s tighter penalties on corrupt business practices. Before we conclude some conspiracy against South African companies, let us also note that this stricter regulation has also hit some Nigerian companies such as First Bank of Nigeria. In fact Nigerian business men has been hit alongside their foreign counterparts by the Central Bank of Nigeria’s stricter FOREX policies. So let us remove any notion of a witch hunt on South African companies as has been speculated by some in the South African media. The obvious disadvantage of the Nigerian government’s high handedness is the hostile environment being created for foreign investors but let us note that cleaning up the business environment is never a disincentive to foreign investors but rather attracts more companies that has been discouraged by the unlevel playing field businesses had due to high levels of corruption in previous governments. Companies like MTN has benefited from such corrupt business environment, that is why it looks like they are worse hit when it’s being cleaned up. They practices by old Nigerian governments only supported companies with monopolistic ambitions and shut out those that actually wanted to do clean business. In fact, Nigeria has the largest market in Africa and should be attracting more foreign investment than it is currently doing, investors are usually deterred by the dirty playing field for business in Nigeria.
This fine cannot drive MTN out of its largest market in the world but might just rather make it clean up its business practices. MTN’s actions in Nigeria can never be tolerated in its home country of South Africa. They practically put the lives of millions of Nigerians at risk by giving terrorists an enabling platform to communicate effectively and as such the fine is fully justified.
source: http://234data..com.cy/2015/11/was-mtn-fine-out-of-hand-iwu-chiagozie.html