A decision by Nigerian authorities to impose a fine on MTN of more than 20% of its market value risks foreign investment in an economy struggling to cope with sliding oil prices, currency restrictions and no finance minister.<\/p>\n
\u201cThe brazenness of Nigerian authorities to levy such a penalty is attracting attention,\u201d Gareth Brickman, an Africa analyst at ETM Analytics NA LLC in Stamford, Connecticut, said in an e-mailed note to clients . \u201cInvestor perceptions of Nigeria have been strained to say the least by policy makers\u2019 management of the naira and the new administrations\u2019 lack of progress on economic reform.\u201d<\/p>\n
[contextly_sidebar id=”CsqBW1GSzq2FLMiGkFzF05KIK26qzqWT”]Nigeria\u2019s telecommunications regulator this week fined Johannesburg-based MTN, Africa\u2019s biggest mobile-phone operator, $5.2bn for failing to disconnect customers with unregistered SIM cards and having incomplete data, causing the shares to post their biggest three-day plunge in Johannesburg since 2008.<\/p>\n
Nigeria is MTN\u2019s biggest market, where it had 62 million customers by September.<\/p>\n
Slowing Economy<\/strong><\/p>\n Investors are losing faith in President Muhammadu Buhari, who has yet to name his cabinet five months after taking office.<\/p>\n He has backed foreign-currency controls imposed by the central bank that have led to an overvalued naira, lower imports and weaker economic growth in Africa\u2019s biggest oil producer.<\/p>\n The economy grew\u00a02.4% in the second quarter from a year ago, its slowest pace this decade.<\/p>\n \u201cThese kinds of incidents will only add to the checklist of reasons for investors to stay away for the foreseeable future,\u201d said Brickman.<\/p>\n Nigeria\u2019s telecommunications regulator said companies doing business in the country must comply with rules.<\/p>\n \u201cAre investors not supposed to respect the laws of the land where they are operating?\u201d Tony Ojobo, spokesman for the Nigerian Communications Commission, said by phone from Abuja, the capital.<\/p>\n \u201cIt is in accordance with our regulations and guidelines that if service providers don\u2019t comply they\u2019ll face a penalty.\u201d<\/p>\n Security Concerns<\/strong><\/p>\n MTN said on October 26 that the penalty relates to the timing of the disconnection of 5.1 million MTN Nigeria subscribers in August and September and is based on a fine of 200 000 naira ($1 005) for each unregistered subscriber.<\/p>\n Falling oil revenue has put Buhari\u2019s government under pressure as it curbs spending and struggles to pay workers\u2019 salaries.<\/p>\n Oil accounts for about two-thirds of government spending and 90% of export income.<\/p>\n Foreign-exchange reserves have dropped 30% since the beginning of last year to $30bn.<\/p>\n Yinka David-West, a senior fellow in Information Systems at Lagos Business School, said the stricter rules on registration were aimed at improving security in a country where kidnapping for ransom is rife and the government is struggling to end an insurgency by Boko Haram militants in the northeast.<\/p>\n \u201cThis registration exercise started because of a security issue,\u201d she said by phone on Wednesday. \u201cIt\u2019s not just about having a database of names and numbers. It\u2019s a tool that is supposed to help fight terrorism, kidnapping, money laundering and all sorts of issues.\u201d<\/p>\n –<\/p>\n Source:\u00a0 Fin24<\/p>\n","protected":false},"excerpt":{"rendered":" A decision by Nigerian authorities to impose a fine on MTN of more than 20% of its market value risks foreign investment in an economy struggling to cope with sliding oil prices, currency restrictions and no finance minister. \u201cThe brazenness of Nigerian authorities to levy such a penalty is attracting attention,\u201d Gareth Brickman, an Africa […]<\/p>\n","protected":false},"author":14,"featured_media":163243,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[],"tags":[20,4],"yoast_head":"\n