Nigeria aims two barrels at SA – MTN and Standard stagger

Nigeria blasted both barrels of its regulatory shotgun at South Africa yesterday. Worse affected was cell phone group MTN, hit with a staggering $5.2bn fine for not disconnecting unregistered SIM cards. On the same day, Standard Bank’s Nigerian subsidiary Stanbic had its chairman, CEO and auditor suspended for an ongoing disagreement with the authorities over transfer pricing.

How times change. In 2001, a cash-starved Nigerian Government invited applications for four cell phone licences at $285m each. MTN was one of only two foreign companies prepared to bid (Zimbabwe’s Econet was the other). Such was the perceived risk that South African investors in JSE-listed MTN believed the company was wasting its time and shareholders’ funds.

The investment turned out very well for MTN. Nigeria is its biggest profit contributor and generates a third of the group’s total revenues. Still, now seeing MTN smacked with a massive fine for what appears to be an administrative error doesn’t smell good.

Perhaps this has something to do with President Muhammadu Buhari wanting to fulfil anti-corruption promises that got him elected seven months ago. Perhaps not. For now we shall have to be content with the reality that we don’t know what we don’t know. But you can be sure other would-be foreign investors are taking note.

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