MTN’s woes in Nigeria: Analyst Dobek Pater on what’s gone wrong
JOHANNESBURG — The situation for MTN in Nigeria continues to be fluid as the company indicated on Monday that it will be turning to the West African country's courts to fight $10bn in claims from the government. Nigerian officials have accused MTN of illegally transferring $8.1 billion out of the country and owing a further $2 billion in back taxes. MTN has disputed the claims. But this battle between MTN and the Nigerian government is nothing new. Back in 2015, MTN faced the world's biggest ever telecommunications fine of $5.2bn for allegedly selling unregistered SIMs – a fine that the country's regulators then dramatically drew back to around $1bn. Could this latest fight then be another case of high-stakes negotiating on the part of Nigerian authorities? Dobek Pater, from Africa Analysis, has been studying the African telecoms market for years and is an expert on what the situation on the ground is like in Nigeria. In this interview, Pater gives us a greater understanding of whether or not this is a shakedown and what the forces at play are in Africa's biggest mobile phone market. – Gareth van Zyl
On the line is Dobek Pater, who is the director of business development at Africa Analysis. Dobek, when it comes to MTN's troubles in Nigeria this week it feels like déjá vu. In fact, in 2015 MTN received a massive fine in Nigeria, just over $5bn, probably the biggest telecoms fine ever. Back then regulators completely drew down on that fine to about $1bn. So, with the allegations with MTN that they illegally repatriated funds and have unpaid taxes – is this another shakedown from their side?
Shakedown is a bit of a strange word because the last time around – with respect to the fine that you mentioned for operating illegal, non-registered SIM cards in the market – it wasn't quite a shakedown. It was an execution of the regulatory requirements that weren't made quite clear to MTN and all the other operators in the Nigerian market. This time around, again, I think it's unclear whether MTN flouted the regulations knowingly and openly, whether they made an honest mistake or whether there was no mistake made whatsoever? I think it's a sign, certainly from the Nigerian side, that the Nigerian authorities, (1) are trying to enforce regulations more to exactly what the letter of those regulations say – exactly as they are intended to be enforced and to do what the regulations dictate must be done. I think it's part of the drive of the Nigerian authorities to combat corruption. Maybe not quite illegal or illicit activities in this particular case. But certainly, non-compliance with the regulatory environment whether it's telecommunications or in any of the other industries.
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