Irony of Nigeria’s Investment Drive


In one breath, Nigerian leaders travel abroad in search of foreign investments and in yet another, turn around to frustrate the investors, writes Davidson Iriekpen

Since President Muhammadu Buhari assumed leadership of the coun­try on May 29, 2015, he has so far visited no fewer than 20 countries, with the latest foreign trip to Germany penultimate week. With each of these trips come an avalanche of criticism from across various sections of the country, condemning the president for embarking on too frequent foreign trips rather stay at home to do what he was elected to do: solve the myriads of problems and challeng­es confronting the nation.

Though there are those who feel the president’s trip are necessary to help tackle the plethora of socio-economic challenges confronting the nation, many others quietly sit on the fence waiting to see how the trips would help better the lots of the mass of the Nigerian people.

In each of these trips, the president usually takes time to address the business communities on the need for them to invest in Nigeria and promising to protect their interests. Apart from Buhari, virtually all the state governors across the country have had cause to travel abroad on different occasions in search of foreign investors. In some cases, some governors tag along with him in some of his trips.

But the question begging for answer is: how are these investors treated when they finally invest in the country? While many analysts are against over-pampering, they feel that a lot of concessions be granted to them in order to attract more.

Since Buhari came on board, more and more businesses have closed shops while others are divesting and leaving in droves, thereby rubbishing the gains made by previous administrations. Willing to tolerate dilapidated infrastructure, complicated red tape and expensive rent, some of the companies can no longer cope with the import and foreign exchange restrictions and the hardline postures of the regulatory agencies in the country.

According to the Nigerian Bureau of Statistics (NBS), 4.58 million Nigerians have lost their jobs since Buhari came into office. The NBS disclosed that 2.6 million Nigerians became unemployed within the first and second quarter of 2016. It also revealed that 1.46 million Nigerians became unemployed in the third quarter of 2015, while another 518,102 became unemployed in the fourth quarter of 2015. The details were contained in the agency’s second quarter unemployment and underemployment report released on August 31, 2016.

Many observers feel that these are attributed to the poor management of the economy by the federal government and its agencies as well as the utterances of the president, which according to them, scare away investors.

For government agencies and parastatals, particularly regulatory agencies, rather than continue to set the rules, have under the pretext of wanting to be seen to be assertive and firm have in recent times come down hard on companies and in the process, frustrating their activities.
One of such hardline positions is the one recently taken against MTN Nigeria. After surviving a debilitating fine imposed on it by the Nigerian Communications Commission (NCC) recently, the telecoms giant is again enmeshed in another round of controversy with the Senate.

The Senate had on September 27, 2016 alleged that MTN in connivance with the Minister of Trade and Investment, Okechukwu Enelamah, and four commercial banks exploited the porous Nigerian financial system to move the sum $13.9 billion out of the country without the required authorisation.

The upper legislative chamber, according to a motion moved by Senator Dino Melaye (Kogi West) on September 27, alleged that MTN smartly beat Nigeria’s financial regulatory laws by failing to obtain a certificate of capital importation (CCI) as authorised by CBN Financial and Miscellaneous Act within 24 hours between 2006 and 2016 before moving the money out of the country.

But at the commencement of investigative hearing into the allegations before the Senate Committee on Banks, Insurance and Other Financial Institutions, MTN had flatly denied allegations of violating the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act.
While appearing before the committee last week, the Chief Executive Officer of MTNN, Ferdinand Moolman, debunked the allegation, adding that Elenemah had not connived with the company to move funds out of Nigeria.

Moolman said: “We would like to reiterate that at no point did MTN Nigeria (MTNN) illegally repatriate funds out of Nigeria or collaborate with Nigerians to loot the external reserves of the country. MTNN is a Nigerian company and is proud to be conducting business in Nigeria. It therefore categorically refutes any accusations of money laundering, economic sabotage or tax evasion levied against it.”

According to Moolman, monies repatriated by the company were in respect of dividend payments and capital investment originating from legitimate foreign direct investment.
“The dividend payments were made to shareholders, who imported foreign capital for investment in MTNN. We would like to state that Elenemah has never been a director or shareholder of MTNN,” he added.

Also, Mr. Pascal Dozie, Chairman of Diamond Bank, who denied the allegation of illegal repatriation by MTN, argued that MTN had invested $16 billion in Nigeria within 16 years. He said the money imported to Nigeria was done in three tranches as he insisted that the allegation by the Senate “was completely false.”

According to him, when MTN came to Nigeria, it offered 40 per cent shares to Nigerians while it took the other 60 per cent only to find that it was difficult to get Nigerians to invest 12 per cent of the 40 per cent offer. He added that MTN had to bring other investors before it could secure 25 per cent of the offer.

Dozie further said it was these Nigerians who constituted Celtelecom adding that a conversion of Celtelecom investment was done in 2007 through its bankers with CBN approval as he exonerated Enelamah, saying he was not a shareholder in MTN but only a director of Celtelecom and CEO of Capital Alliance which he said midwifed the Celtelecom.
Assuming the telecoms company was guilty of the offence, where were the regulatory agencies while these were going on?

However, the reprieve the company got during the hearing came from the Executive Secretary of the Financial Reporting Council of Nigeria (FRCN), Mr. Jim Obaze, who in his submission, said regulatory agencies should be blamed for the infraction. He added the Department of State Services (DSS) had investigated the issue and pledged to make a copy of the report available to the committee.

The question therefore is: does the government want to kill MTN, a company that has contributed to the growth of the country in the 15 years or this is some politics beyond the reach of the operators of the company? Is it aware that intending investors all over the world are watching its activities?

This was perhaps why the company, in a paper it presented to the Senate committee, said: “It is our reasonable belief that Standard Chartered Bank of Nigeria, as an entity regulated and supervised by the CBN, made the prescribed returns to the CBN within the prescribed time of receipt and conversion of the funds. We are not aware that the CBN has at any time queried the bank for any default in this regard.

“As a Nigerian telecommunications company, MTNN is regulated by the NCC. MTNN’s obligation with regard to the issuance of CCIs is to provide the necessary evidence of inflow and purpose of inflow to the relevant banks. Following receipt of the CCIs, the responsibility of ensuring compliance with the CBN regulatory framework rests with the individual banks.”
That MTN has contributed immensely to the nation’s economy since 2001 when it made its debut cannot be over-emphasised. With an equity contribution of $402,035,000, debt capital of N329 billion and offshore loan capital of $1,297,000,000, the company is among the biggest growth-driven companies in the country.

For instance, from when it commenced business in Nigeria to date, it has paid well over N1.6 trillion to the government in taxes, levies, regulatory payments, etc. It has done these in compliance with extant provisions of the law, and continues to fulfill its obligations as a good corporate citizen.

With 78 trade partners, 95 data trade partners and 25 convenience channel partners; the telecoms giants has created directly and indirectly, over 500,000 job opportunities in the Nigeria. The total subscriber base as at Sept 2016 is 60.07million and estimated population coverage of 92 per cent. Since its inauguration, MTNN has led the growth in the voice and data market, altering the way Nigerians live, work and play. MTNN is now positioned to deliver a bold, new digital world, leading growth in broadband deployment and digital services.

Regarding broadband, the recent launch of MTN 4G LTE which is the fastest wireless internet connection available today, is poised to deliver the attendant socio-economic benefits to Nigerians. Its commitment to contribute to the growth and development of the Nigerian economy has been demonstrated by over US$16 billion invested in infrastructure and other services.
Through its foundation (MTNF), the company has committed over N18 billion (since 2005) to executing various projects that have touched lives in the areas of health, education and economic empowerment in 550 project locations across the 36 states of Nigeria and the Federal Capital Territory, Abuja.

The foundation has become known for its brand of wide impact and sustainable corporate social initiatives (CSI) interventions done in partnership with government/multilateral agencies and the private sector. In this wise, over six million people have been directly impacted by MTNF activities since its inception.
At a time when many rich men prefer to keep their monies abroad and interest-yielding account, it is inexplicable why those who have taken the risk to invest in MTN should go through their present predicament.

Since Buhari came on board, more and more businesses have closed shops while others are divesting and leaving in droves, thereby rubbishing the gains made by previous administrations. Willing to tolerate dilapidated infrastructure, complicated red tape and expensive rent, some of the companies can no longer cope with the import and foreign exchange restrictions and the hardline postures of the regulatory agencies in the country