Treaty gives MTN recourse in Nigeria over rent-seeking fines
Contrary to the West African country’s assertions, the SA firm is legally free to expatriate profits
MTN found itself on the wrong side of the Nigerian authorities for the second time recently. In the first incident, in 2015, the cellular group was accused of allowing some of its clients to remain connected despite not having registered with the authorities. This was in contravention of Nigerian telecommunications laws — the equivalent of SA’s Rica framework. As a country that grapples with security challenges, Nigeria took a strong view that MTN’s noncompliance could compromise its fight against Boko Haram. However, the Nigerian government’s $5.2bn fine seemed disproportionate to MTN’s transgression. In addition, there seemed to be due process red flags around the institution that levied the fine against MTN. The whole process reflected an element of rent-seeking and possible political manipulation. While MTN eventually had the fine reduced to about $3bn — with the help of a former US attorney-general — the company suffered losses through its share price dropping, and lost its CEO...
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