On Friday, MTN Nigeria agreed a settlement with the National Communications Commission (NCC) to reduce the fine of N1.04 trillion to N330billion. The punitive fine was imposed because of the company’s failure to disconnect subscribers who were not adequately registered despite numerous warnings by the regulatory body urging its compliance.
MTN, the South African telecommunications multinational received the huge fine equivalent to $5.2 billion dollars last October and reached an agreement, last week, to reduce this figure to $1.65 billion. Mr. Shittu, the Minister of Communications said there was pressure on the Federal Executive Council (FEC) from different quarters, which later agreed to reduce the fine and the sum of N330 billion to be paid within a period of three years. The settlement was reached after negotiations involving the Attorney General of the Federation, Mr. Abubakar Malami, the Minister of Communications, Mr. Adebayo Shittu, Prof. Umar Danbatta, the Executive Vice Chairman of the NCC and MTN representatives. After much deliberation, the fine was significantly reduced with terms mandating the company list its shares on the Nigerian Stock Exchange (NSE) and offer a formal apology to the government and the citizens within a month of the execution of the agreement.
Mr. shittu remarked that the settlement was reached in order to encourage investment in the country. This is in line with the series of moves in the past month by the federal government to encourage investment such as the floating of the Naira and the London Investment Roadshow.
Are Nigerians being shortchanged?
Many Nigerians are left discontent with the agreement and claim to be shortchanged as a result of the fine reduction, and understandably so. Nigeria fetches more revenue for the multinational than all other 21 countries in which the firm operates combined, and this leverage can be used to ensure that the full fine is paid and paid promptly. In an economic climate where the government revenue is about a quarter of its 2014 figure due to attacks on the country’s critical pipelines, many feel that the fine could be used to plug revenue shortfalls. Additionally, there is a sense of injustice as some citizens believe that MTN are getting away with no more than a slap on the wrist given the gravity of their offence, which many believe have hampered or slowed the government efforts in quelling the Boko Haram insurgency, thus contributing to the loss of lives in the country. ‘MTN’s misdemeanour resulted in the deaths of thousands of Nigerians. Therefore, we call on the National Assembly to continue to put pressure on the executive to cancel the said reduction in the fine imposed on MTN, and go on to arrange negotiations related to the fine in an open and transparent manner,’ said Rev. Ugolor, the Executive of Africa Network for Environment and Economic Justice (ANEEJ).
Perhaps the greatest concern is not one of economic development or justice but one of corruption, the very issue President Buhari’s administration has sworn to fight. On Tuesday, the House of Representatives Committee on Communication summoned the ministers and key figures involved in the settlement deal over the fine reduction. The committee was given the task of investigating the MTN fine and were dismayed to learn that a settlement had been reached in a closed-door meeting while the investigation was still ongoing. “We need to make sure everyone complied with the law. The law doesn’t say anything about reducing a fine. What are the issues that have changed in the assessment at the time of imposing the fine and now? What is the legal basis for this reduction?” the Chairman of the Committee, Mr. Saheed Fijabi inquired. ANEEJ expressed its disapproval of the settlement and went one step further by calling for an out-right cancellation of the agreement as they say it is a product of a secret negotiation between the Communications Minister, the Attorney General of the Federation and the Governor of the Central Bank. These reservations have strong undertones of suspicions of wrongdoing in the expedited negotiations.
The settlement will definitely restore investor confidence as the large fine ignited fears that the country may have taken baby steps towards a Venezuelan style expropriation in the future, but the reduction of the fine in conjunction with a relaxation of capital controls have eased those concerns. The process through which the settlement was reached is, however, more cause for concern than the decision itself.