Lessons have been learned. It is time to resolve the dispute and move on
With the expected visit this week of South Africa’s President, Mr. Jacob Zuma, there is hope that the lingering dispute between the Nigerian authorities and the MTN Group will be resolved. Minister of Communications Technology, Alhaji Adebayo Shittu hinted as much last week when he placed the ball squarely in the court of President Muhammadu Buhari. “It is within his power and jurisdiction to do that if he feels it will be in the best interest of Nigeria,” said Shittu. “We hope the meeting between the two presidents (Buhari and Zuma) will help in resolving the issue.”
We hope the ongoing negotiations will be quickly concluded so that both the federal government and MTN Nigeria Communications Ltd can put the unfortunate incident behind them and move on with the belief that sufficient lessons have been learned, especially by all the stakeholders in the sector.
MTN was fined N1.04 trillion last October for failing to deactivate some 5.2 million unregistered subscribers on its network. Following initial discussions between their officials and representatives of the Nigerian government, the fine was slashed to N780 billion and the company was given till December 31, 2015 to pay up. But before the expiration of the deadline, MTN took the federal government to court. Penultimate week, it elected to withdraw the case from the court and paid N50 billion to Nigerian Communications Commission (NCC) in a gesture of good faith and signifying its willingness to reach a settlement with the industry’s regulator on the fine.
With the withdrawal of the court case by MTN and commencement of negotiations, we believe that we are on the route to an amicable resolution of this crisis. The government and the regulatory authority have made their point, while MTN has demonstrated corporate penitence and a desire to obey our laws. The rest should be a sensible negotiation that should lead to a further downward review of the hefty fine. While we should never fail to sanction foreign companies if they break our laws, we believe that as things stand, the authorities should apply the right mix of regulatory firmness with business-friendly common sense.
There are several examples all over the world that will serve the Nigerian authorities as they negotiate with MTN. The recent case of Google and the British government where a similar resolution was struck on matter of back taxes was revealing. At the end, Google was asked to pay a modest £15 million in back taxes and to sin no more. The prime consideration was the number of UK jobs that would have been on the line if Google decided to close shop or migrate its operations to Ireland which has a more friendly corporate tax regime. There was also consideration of the global strategic nature of Google’s business and its investment in physical infrastructure in the UK, etc.
We believe that the Nigerian authorities should pick lessons from such instances and avoid unnecessary drama and muscle flexing in matters that only a sense of proportion can best resolve. This fine was neither meant to raise money for our country nor was it an attempt to cripple MTN’s operations. It was an enforcement of our law that was cynically breached by a foreign company operating in Nigeria. But it is time to have a closure on an issue that has dragged on for months. We should be mindful of one fact whatever we do here and on this issue, prospective investors across the world are watching and listening.