What value could MTN have possibly added to the lives of Nigerians since it first set up shop in the country in 2001, to warrant the remittance overseas from 2006 to 2015, of $8.1 billion as dividends for an investment of $400 million that was made between 2001 and 2016?
This is the burning question that Nigerians, their leaders and the media (which is forever reminding the world of its watch-dog role in society), should have been asking in the wake of the report that the Central Bank of Nigeria had ordered MTN to repatriate to Nigeria that huge sum of hard currency, having determined that the telecommunications service provider had illegally transferred same out of the country. It is the question we are now constrained to ask in this piece, especially since the Central Bank Governor, Godwin Emefiele, has announced in faraway London that the matter will soon be resolved “amicably and equitably.”
It is most disconcerting that the main concern of most observers and the mainstream media has been the legality of the Central Bank’s action and the need to preserve so-called investor confidence in Nigeria and its policy and regulatory environment. Even the direct representatives of the Nigerian people, the Senate which had looked into the matter in 2016/2017 when the allegation was that the sum illegally transferred was a humungous $13 billion had previously and somewhat blithely, cleared MTN of any wrong doing. Its excuse for doing so at the same time was that it had been assured by the CBN that the company had been ‘pardoned’ for any infractions of extant foreign exchange rules it might have committed. The Senate of the Federal Republic did not feel troubled in any way that such a sum, about a third of our foreign reserves at the time, had been casually relocated to private coffers abroad.
Following strident remonstrations by MTN and the banks that were fined for facilitating the alleged illegal dividends transfers, the CBN now appears to be backing down. As had the Senate earlier on the ‘advice’ of the same CBN. What could have prompted the Central Bank that had earlier declared MTN ‘pardoned’ to exhume the case more than a year later? Why should such a grave matter be treated so perfunctorily, to the point of the CBN governor promising an ‘amicable and equitable’ settlement apparently ahead of the conclusion of investigations and the public announcement of the details thereof? Amicable from whose point of view and equitable to whose interest?
Given the way the entire matter has been treated by institutions like the Central Bank and the Senate, by the general public (in their reaction) including even labour (which has not made any comment to our knowledge) and by the mainstream media (which has pussyfooted around the issue, possibly because MTN is one of the biggest media buyers in the country), it is clear that what passes for pubic conscience in Nigeria is dying fast, if it has not been dead and buried already. In the current, market-obsessed ideological climate, nobody cares anymore if the country is bled to death by buccaneers masquerading as foreign investors.
Whether MTN broke the law or not is quite beside the point. In fact, particularly if it broke no law, the remittance abroad of $8.1billion in 10 years as dividends against an investment of a paltry $400 million over five years, calls for a serious re-examination of the philosophy, direction and goal of national development as well as the institutional and operational environment that made such a leakage possible. This afterall, is a country that only a few years ago, boasted foreign reserves of a mere $25 billion or so and is forever devaluing its currency with attendant deleterious effects on the well-being of the broad mass of its people because it is frequently in danger of running out of reserves!
It must be borne in mind that the enormous dividends in question were by no means the only monies repatriated by MTN. That company, along with other foreign investors, routinely cart away from our shores, eye-watering sums as technical, management and licensing fees of dubious value. The country is literally bleeding out as a result.
If MTN alone sent out so much, how much have other foreign companies hauled out? Might the perennial pressure on our reserves and exchange rate be the result of the unrestrained repatriation of super-normal profits by so-called foreign investors; including those who invested in MTN and reportedly sourced the ‘foreign currency’ for their investment from the local dollar market? Is there nothing we can do to limit the hemorrhage of scarce foreign exchange from an economy that is perpetually in dire need of same to finance infrastructure and social goods that can spur genuine development, create jobs and reduce the high incidence of poverty?
How can Nigeria not be the world capital of poverty if it loses so much of its wealth to the outside world in the name of returns on foreign investment? If such investments have been so beneficial; if it has truly delivered development, why have we remained so poverty stricken after all these years?
Given the abject surrender of our governing elites to neoliberalism, these types of questions probably sound heretical in their ears. But they have to be asked at this point even if for purposes of historical record. Let it not be said decades hence when Nigeria would have been left further behind by the rest of the world, that nobody bothered to bring these and related issues to the attention of elites that evidently do not recognize their historic duty and appear even less inclined to doing anything about it.
Leaving aside the matter of the leakage of foreign exchange, the sheer size of the dividends suggests a level of profitability that is seldom seen outside the illegal drug trade. Might MTN have been profiteering on the backs of hapless Nigerians? It is well-known that mobile telecommunications services in Nigeria have been of less-than-stellar quality. So what business management wizardry, other than price gouging and barefaced exploitation of the people by virtue of its oligopolistic market position, could have yielded such rates of profit? And what has the Nigerian Communications Commission, the industry regulator, done about it all these years? How and why, after the experience we had with the oil and gas industry, did we allow foreign investors into the telecommunications sector without explicit, stringent, time-specific and enforceable local content provisions?
No country in Nigeria’s position; or, come to that, few better-off ones, should suffer the kind of leakage that the MTN dividends repatriation represents. As the policies of Donald Trump in America have shown, even that country, as rich as it is, would balk at such a level of financial hemorrhage. As a net borrower whose indebtedness is already a source of anxiety, Nigeria should watch what goes out with eagle eyes; foreign exchange is always scarce relative to our needs. Shouldn’t we be mindful of the shameful fact that the unrestrained plunder of our foreign exchange earnings despite the bounteous inflows of the Jonathan years led directly to the increased foreign indebtedness we are seeing today?
Of course, Nigeria’s ruling elites have embraced, without any reservations whatsoever, the usual neoliberal mantra:- liberalisation, open capital accounts, privatization and other free market orthodoxies. But should Nigeria be more catholic than the Pope? If America under Trump can question the wisdom of some of these orthodoxies, why should we, in a country as economically backward as ours, allow foreigners and their local collaborators to get away with the financial and developmental equivalent of murder all because those who run our affairs can’t overcome their mental enslavement by the neoliberal world view?
––Anyang, who has been variously a journalist, banker and Commissioner for Economic Development in Akwa Ibom State, writes from Port Harcourt.*