MTN’s fine threatens Nigeria-South Africa trade ties: Lawmakers

MTN’s fine threatens Nigeria-South Africa trade ties: Lawmakers

Wednesday, November 4, 2015 7:10 pm

Mmamoloko Kubayi

Mmamoloko Kubayi

South African lawmakers are concerned MTN Group’s alleged violation of Nigerian laws could hurt trade relations between the continent’s two biggest economies, the head of a telecoms parliamentary committee said on Wednesday.

Africa’s biggest mobile phone company was last week fined $5.2 billion by the Nigerian Communications Commission (NCC) for failure to cut off users with unregistered SIM cards from its network. Nigeria is MTN’s biggest market.

The Johannesburg-based company is in talks with authorities in Nigeria, which surpassed South Africa as the continent’s biggest economy in 2014, to make what three sources familiar with matter say is an attempt to have the fine reduced.

“It is important for South Africa to increase trade relations with other African countries but if something like this happens we get worried about our reputation and the impact that would have on South African companies wishing to expand on the continent,” head of the parliamentary telecoms portfolio, Mmamoloko Kubayi told Reuters.

Firms in Africa’s most industrialised economy such as grocer Shoprite and Standard Bank are among the biggest investors in Nigeria. The country accounted for nearly 80 percent of South Africa’s total trade in Africa in 2012. South Africa’s oil imports account for the bulk of trade.

Talks between MTN and the Nigerian authorities continued on Wednesday, the company said in a statement, and again dismissed speculation that it had reached an agreement on the fine.

Nigeria has been pushing all telecom operators to verify the identity of their subscribers, on concerns that unregistered SIM cards were being used for criminal activity in a country facing an insurgency by Islamic militant group Boko Haram.

The NCC said in October all telecom firms except MTN had complied with the directive which was first issued in August, when it warned of a fine of 200,000 naira ($1,005) per SIM card. MTN failed to disconnect 5.1 million subscribers in August and September, the NCC said.

The fine came after the kidnapping on Sept. 21 of Olu Falae, former Nigerian finance minister, by kidnappers who the regulator said had used MTN phone lines to negotiate a ransom.

Some analysts have said the size of the fine risked damaging Nigeria’s efforts to shake off its image as a risky frontier market for international investors, though others said it showed Nigerian regulators were keen to enforce the law.

Shares in MTN, down about 20 percent since the fine was announced last week, traded 4.7 percent higher at 162.86 rand as of 1404 GMT.


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