Nigerian President Muhammadu Buhari. Picture: REUTERS
Nigerian President Muhammadu Buhari. Picture: REUTERS

In another bizarre twist for South African corporates active in Nigeria, the country’s central bank has summarily deducted R75m from the bank account of Standard Bank’s Nigerian operation for alleged contraventions of foreign-exchange rules.

The fine of 1.886bn naira, or about R75m, was imposed on August 29, and was still being appealed by Standard Bank’s Nigerian subsidiary Stanbic IBTC Bank. Standard Bank announced on Thursday, just before the market closed, that the money was deducted by the Central Bank of Nigeria (CBN).

Stanbic was one of four banks accused of being involved in the contravention of Nigeria’s exchange controls.

MTN Nigeria was also accused of illegally repatriating $8.1bn to SA between 2007 and 2015.

Nigeria has taken these steps as the country prepares for elections in February 2019, in which President Muhammadu Buhari seeks re-election. He is campaigning on an anti-corruption ticket, with promises of clamping down on tax dodgers and corporate wrongdoers. CBN governor Godwin Emefiele is a close ally, Bloomberg has reported.

"This action by the CBN does not preclude the bank from engaging with the CBN and the group hereby confirms that it remains the intention of the bank to continue to do so," Standard Bank said. It would not comment further.

The latest moves by the Nigerian government have been harshly criticised by some investors in MTN.

Paul Theron, who runs Vestact in Johannesburg, said in a letter to clients this week: "This pathetic, nationalistic and immature attitude will severely weaken Nigeria’s economy in the years to come.

"MTN has been their most committed foreign investor in recent decades, by a mile. Thanks to these acts of wanton highway robbery, no large corporate will commit to building a serious business in Nigeria for decades to come."

MTN has seen its share price collapse in the wake of the revelations, falling 30% since news of the demands broke. This began with the demand that MTN Nigeria should return the $8.1bn it had repatriated.

The company was dealt another blow earlier this week when it was served a tax bill of up to $2bn by the Nigerian government for taxes on imports of equipment it had made to the country over the past decade. MTN denies the allegations.

The company has also been in the cross-fire of US President Donald Trump’s trade war, with the continent’s biggest cellphone company by subscribers being prevented from repatriating as much as R3.4bn from Iran due to sanctions being imposed by the US.