Nigeria must not scare MTN away, its communications minister said as MPs investigate claims of illegal money transfers three months after Africa’s biggest telecoms group was fined more than $1bn. The comments by Adebayo Shittu are the government’s first statement on the latest MTN investigation, indicating the government does not want to see the South African group punished unduly in Nigeria, its biggest market if the latest allegations prove true.
“Nobody will say that MTN is not important to Nigeria — we must encourage them, we must not scare them away from Nigeria,” Shittu said on Friday. MTN, the largest mobile phone group in Nigeria, threatened to pull out of the country last year during a dispute over unregistered SIM cards before the government agreed to reduce a settlement on the issue by nearly 70% to $1bn.
The company now faces another hefty penalty if an investigation by Nigeria’s upper house of parliament finds evidence that MTN Group Ltd illegally transferred $13.9bn out of the West African country from 2006 to 2016. MTN has said it did not break Nigeria’s currency transfer rules. “The presumption is that they are innocent, and we pray they remain innocent,” Shittu said. “They must stay.”
Shittu’s comments are similar those he made when MTN was initially fined $5.2bn in 2015 — equal to more than two years of its Nigerian profits — for failing to cut off unregistered SIM cards. The fine was reduced last June to 330-billion naira ($1.1bn). Nigeria accounts for a third of MTN’s revenue. The crux of the allegation of illegal money transfers is that MTN did not obtain certificates declaring it had invested foreign currency in Nigeria within a 24-hour deadline stipulated in a 1995 law, and so the repatriation of returns on those investments was illegal.
“They have a right to repatriate their profits as long as it is legitimately done,” said Shittu. At any time MTN is suspected of breaking the law, it would be investigated, but allegations “against them must be established beyond reasonable doubt. Everyone who is in business will have ups and downs. You don’t throw away the baby with the bathwater.”
Shittu said the investigation was an issue for financial regulators and did not fall within his “constitutional responsibility”. The government, however, can influence the size of the penalty, as with the SIM card issue. Shittu also said Nigeria planned to build and launch two new satellites using a $550m loan from the Export-Import Bank of China, which would cover 85% of the cost. Nigeria would finance the other 15%. Shittu called on domestic and foreign investors to take part in funding.