Nigerian authorities renew pressure on MTN
The latest demands on MTN are in contrast to conciliatory comments made by Central Bank of Nigeria governor Godwin Emefiele
MTN shares slumped as much as 11% on Friday after a report that Africa’s biggest cellphone network operator is facing pressure to transfer $8.1bn to Nigeria before that country’s courts rule on its conflict with the central bank.
Bloomberg reported that the Central Bank of Nigeria (CBN), which accuses the SA-based company of repatriating dividends illegally, said that MTN should pay an annualised 15% interest until the country’s courts rule on the matter, and then 10% until the whole sum is paid.
MTN shares, which are down nearly 40% so far in 2018, fell 11% at one point on Friday, the most since September 4, the day after CBN deputy governor Joseph Nnanna was reported as accusing the company of having “flagrantly violated foreign-exchange” regulations. The shares closed 4.01% down at R83.80 on Friday.
The latest demands on MTN are in contrast to conciliatory comments made by CBN governor Godwin Emefiele, who said in September that the dispute would be resolved soon to the satisfaction of all parties.
On top of the slump in MTN shares, the dispute is also damaging Nigeria’s reputation as a destination for foreign investors.
The court filing “is contradicting what the CBN governor said recently”, said Peter Takaendesa, a portfolio manager at Mergence Investment Managers in Cape Town.
“Any aggressive language from Nigeria will obviously put pressure on the share price again.”
MTN declined to comment.