The latest tax imposed on the South African Group MTN in Nigeria fuels beliefs that the telecommunications operator is purposefully targeted. This belief shared by part of the South African public has, by the way, led to isolated acts of xenophobia against Nigerians living there, local media sources reveal.

In the last two years, the telecommunications operator has been required to pay more than $15 billion. The first fine imposed for unregistered subscribers was reduced from $5 billion to $1 billion with the added requirement to list part of MTN Nigeria’s shares on the Nigerian Stock Exchange. Following this, MTN Nigeria is asked to refund $8.1 billion illegally repatriated funds and pay $2 billion tax arrears.

This case reminds of some others which look like dissuading acts. Indeed, in the telecommunications sector, Etisalat whose local subsidiary was a major player in the sector left the country because it was unable to reach an agreement on the problems it was confronted with.

The hotel group Sun International is also leaving for being unable to reach an agreement with the regulator and local shareholders. The group is thus following on the footpath of the South African retail giant Woolworth, and the agro-industry group Tiger Brands which left Nigeria in the past three years.

According to some analysts, Nigeria’s business climate can be harsh for foreign investors. The New-York based private equity firm Milost Global experienced it first-hand in 2017 when a bank acquisition it assured was conducted in strict compliance with the regulation turned sour with targeted news articles.

The main point now is to know which group or who will benefit from MTN Nigeria’s departure. It is not easy to provide a definite answer to this point but logically, it will profit the second operator which is none other than Global Telecom.

The owner, the discreet Mike Adenuga is Nigeria’s second richest man behind Aliko Dangote. He built his empire in a mix of opportunism and firmness. Indeed, his company Glo has no difficulty operating in the local market along with international telecommunications companies.

Nevertheless, beyond those polemics, let’s not conceal the fact that multinational companies, taking advantage of the weak environment in developing countries, African notably, sometimes device schemes to escape the law. Nigeria informs that it was alerted by a whistleblower.

As far as it is concerned, MTN Group announced it initiated discussions with Nigerian authorities. The banks involved in the alleged fund repatriation case also initiated discussions. In the meantime, on the Johannesburg Stock Exchange, investors are demotivated. After a 17.4% loss on the exchange on September 4, 2018, the company’s shares kicked off with a feverish rise today September 5, 2018.  

Idriss Linge