MTN may get naira refund by paying the $8.1bn Nigeria demands

The MTN Group [JSE:MTN] may receive a naira-denominated refund if Africa’s biggest wireless carrier returns the $8.1bn that Nigeria says was illegally taken out of the country.

The SA phone company must bring back the cash after it and three banks “flagrantly violated foreign-exchange violations,” Nigeria Central Bank Deputy Governor Joseph Nnanna said by text message Sunday, reiterating a Wednesday order. The lenders have been hit with a combined $16m fine for their role in the transactions, which happened over eight years through 2015.

News of a potential like-for-like naira refund answers one of the outstanding questions arising from last week’s bombshell, when the reserve bank handed down the order to the country’s biggest mobile-phone company. How and when MTN should pay the money and what happens if the company doesn’t comply remain unanswered. MTN denies all allegations.

MTN’s share price ended the week 17% lower in the wake of the turmoil, leaving the stock close to nine-month lows. The news came almost three years after Nigeria hit the carrier with a $5.2bn fine - later reduced to about $1bn - in an entirely separate dispute over SIM-card registration. That incident also weighed heavily on the share price.

MTN had agreed to sell shares in the Nigeria business in Lagos as part of the 2016 SIM-card settlement, but the latest censure has thrown those plans in jeopardy.

The crackdown on the company comes as Nigeria President Muhammadu Buhari seeks re-election for a new four-year term in a February vote. His administration has gone after companies for irregularities as well as tax-defaulters, part of a wider pledge to fight corruption in Africa’s most populous nation.

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
ZAR/USD
15.51
(-1.41)
ZAR/GBP
21.45
(-1.19)
ZAR/EUR
18.38
(-0.72)
ZAR/AUD
11.86
(-0.58)
ZAR/JPY
0.14
(-0.93)
Gold
1682.16
(-1.45)
Silver
25.14
(-1.04)
Platinum
1141.00
(+0.44)
Brent Crude
70.77
(0.00)
Palladium
2309.01
(-0.79)
All Share
68426.17
(+0.23)
Top 40
62910.60
(+0.19)
Financial 15
12747.28
(-0.10)
Industrial 25
87156.37
(-0.52)
Resource 10
71780.93
(+1.38)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Results
Yes, and I've gotten it.
21% - 1074 votes
No, I did not.
52% - 2696 votes
My landlord refused
28% - 1461 votes
Vote