It is harder to do business in Nigeria than it is in 168 other countries. This is based on a report by the World Bank Group that considered an average of ten different metrics (or rankings) to determine how easy or hard it is to do business in each country.
The report includes the World Bank’s assessment of the business regulations of 190 countries, and Nigeria ranks below 170th for five metrics. Getting electricity (180), trading across borders (181), and registering property and paying taxes (182) are the places where Nigeria ranks lowest, with the highest being monitoring minority investors (32). What’s more telling is that Nigeria fell in seven of those ranking metrics despite moving one place up from 170, thanks to the sixteen-place change in rank from 60 to 44 for getting credit.
In June 2016, Asset Management Corporation of Nigeria (AMCON) released a list which revealed that a lot of companies thought to be thriving in Nigeria are finding it difficult. 100 companies were reportedly owing a combined N953.43 billion. That same month, AMCON seized some properties of Senator Ben Murray Bruce’s Silverbird Group for defaulting on loans, only to reopen them three days later after both parties reached an agreement. Senator Bruce blamed the loan default on “hard times”, and he was not wrong to do so.
At the moment, and since the latter part of 2015, Nigeria’s economic climate has gradually become too hot and many businesses and people have been burned. But, true to Nigeria’s place on the World Bank Group’s ease of business ranking, even some of the businesses that are thriving in spite of the current economic climate are facing some sort of opposition from the government.
MTN vs NCC
MTN’s relationship with the Nigerian government has been deteriorating since October 2015 when the Nigerian Communications Commission (NCC) slammed the telecoms company with an outrageous $5.2 billion fine for violating SIM card registration regulations. Since then, the NCC has threatened to not reduce the fine, reportedly reduced the fine, actually reduced the fine, and the president has gotten involved, and then travelled to South Africa to meet Jacob Zuma, the MTN Group CEO and other key officials resigned. Now, throw a few lawsuits into the mix, and then sprinkle this with the recent clash between the NCC and MTN Nigeria over the Visafone spectrum deal and you will see the complete picture of what is going on here between MTN and the Nigerian government. It may be safe to call it a witch hunt.
Since MTN came to Nigeria in 2000, it has, directly and indirectly, employed half a million Nigerians, and in the first quarter of 2006, the company alone contributed 3.4 percent of Nigeria’s Gross Domestic Product (GDP), while generating 80 percent of the electricity it uses to run its business. Moreso, MTN has paid at least N1.6 trillion in taxes in 14 years and has, through its MTN Foundation, contributed at least N16 billion to different projects in Nigeria.
…In steps the Senate
On September 27, 2016, Senator Dino Melaye, the senatorial representative for Kogi West, raised a motion during a session accusing MTN Nigeria of illegally repatriating over $12 billion outside Nigeria between 2006 and 2016, violating the Foreign Exchange (Monitoring and Miscellaneous) Act in the process. He said that MTN outsmarted Nigerian financial regulations to obtain a CCI (Certificate of Capital Importation) within 24 hours before transferring money out of the country without proper authorisation. Senator Melaye also named Okechukwu Enelamah, the Minister for Trade and Investment and four Nigerian banks: Citibank, Diamond Bank, Stanbic IBTC and Standard Chartered. MTN’s fault, according to the senator, was not notifying the CBN of the repatriation of the money within 48 hours, as required by law.
MTN has since issued a response to the allegation. Ferdi Moolman, MTN Nigeria CEO, said, “No dividends were declared or paid until the CCIs were issued and finalised. He added that “MTN Nigeria only requested for CCIs for foreign capital that was invested in Nigeria and dividends were externalised on issued CCIs.”
Pascal Edozie, Chairman of MTN Nigeria, explicitly stated that “the allegations are completely false” and that “MTN complied with extant laws and regulations.”
It is systematically impossible to obtain a CCI within 24 hours because the law and regulatory framework are unrealistic and unfit for this technological age where things move fast. It’s no secret that the Nigerian government and its systems are still notoriously too slow to keep up with the times we are in; case in point, the way the government has reacted to drone technology so far. Bringing these systems from the ancient times they are stuck in and into the future should be the primary focus of the Nigerian government, not this onslaught that we are witnessing right now.
The way Nigeria has dealt with MTN is also off-putting to foreign investors, add to that Nigeria’s unfriendly economic policies. In the words of Patrick Obahiagbon, Nigeria’s economy is in a state of “dismal bysma”; foreign currencies are scarce, as are foreign investors. And while the president may be in the middle of an anti-corruption war (that is yet to see anyone formally convicted), he still needs to think about the future of the nation. Nigeria reportedly loses over $50 billion every year to corrupt politicians, but we almost never see any of them being convicted and sentenced to prison for corruption. Rather, what we see is a continuous trend of trials-by-media.
Intra-national and international relationships will always be important. How we treat MTN matters a lot to the international community. There is a fundamental problem here, and it is that it is difficult to start and run a business in Nigeria. The people in government have a moral responsibility to ensure the economic growth of this nation. And attacking a company that has contributed so much to that, while neglecting the real underlying issues, is not what Nigeria needs at this time.
