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CBN May Be Shooting Itself with MTN Witch-Hunt- Expert

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Tunji Andrews, a Lead Economist at Time, Trade and Commodities (TTAC), has said that the Central bank of Nigeria (CBN) may not be making the best decision after all  with the harassment and heavy fines on MTN Nigeria.

 

Andrews was reacting in a letter as the debate over the tax compliance of MTN and the alleged illegal transfer of equity through four banks continued to dominate the tabloids.

 

He wrote “The findings were brought to public knowledge when the letters sent by CBN to the four banks in question were released to the public.

 

These accusations have caused serious turmoil for MTN and its operations, so much so that Paul Theron – Veteran TV host and CEO of Vestact, a financial asset management company, has called out the Nigerian government in a statement saying “You could expect this kind of behavior from really third-string countries, but Nigeria is supposedly a country that takes itself seriously — it doesn’t seem to be consistent at all.”

 

The letters revealed by the CBN detailed a number of transactions which may have violated foreign exchange laws, especially those regarding the repatriation of MTN assets via what has been called “illegal” CCIs (Certificates of Capital Importation).

 

What this means in layman’s terms is that MTN transferred some of its assets from its country of origin to Nigeria, courtesy of a couple of banks and CBN is looking into the situation to validate if this process complied with its foreign exchange policies.

 

These accusations have seriously hurt the market share of the telco giants, as recent reports show a plunge in the company’s share price with about $3 billion knocked off from its market capitalisation, after tumbling by 14 percent to a nine-year low of 2,030.76 NGN.

 

It is safe to say the last 2 weeks have been less than pleasant for MTN Nigeria, and CEO Rob Shuter has decried the “peculiar and coincidental timing” of what appears to be a regulatory assault on its business in the country, but also reinforced MTN’s stance in proving its innocence of all allegations.

 

The first part of this bizarre saga is how such high-level information has been able to become so public. Considering the media coverage that has followed this story, one may have confused this for a gossip feature. The “confidential” letters sent to these banks were rather unusually released to the public and the CBN further corroborated the story by tweeting about the investigations.

 

The second interesting aspect of this story is how quickly the story has developed. From rumors and leaks to outright fines and even debiting of bank accounts, the speed with which this story has taken a turn for the worse, particularly for the banks, has been rather uncharacteristic of our usual tepid government.

 

To provide a quick retrospective look and to put this into proper context, let’s look back at how the story has evolved since the CBN released those letters.

 

The regulator immediately asked MTN to refund the sum of $8.1 billion dollars which it claims may have been illegally repatriated by the telecommunication company. While the 4 banks (Stanbic IBTC, Diamond Bank, Standard Chartered and CitiBank) were slapped with hefty fines ranging from NGN 250 million to NGN 2.4 million dollars.

 

MTN on its part expressed its innocence explaining that the MTN Group and the original shareholders injected a total of $402, 625,419 into MTN Nigeria between 2001 and 2006 in the form of loans and equity. These initial inflows were the basis for the issuance of various legacy CCIs obtained from Authorized Dealers in accordance with regulations. All of these, including the inflow of capital, has long been confirmed by the CBN.

 

The subject of “illegally” obtained CCIs has also been addressed. The reality is that the CCI process is essentially in place both for the protection of investors as well as to provide the CBN with documentary evidence for monitoring capital inflows and outflows.

 

Although over time the CCIs have been reissued, consolidated and reconstituted to reflect the changing MTN capital and shareholding structure, the amount of NGN 402,625,419, has remained the same.

 

One aspect of the changing capital structure was the conversion of shareholder loans to preference shares, meaning the latest transfer of equity is in no way a violation of the law.

 

Section 15 (5) of the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act 1995, states that, “The repatriation referred to in subsection (4) –  which deals with foreign exchange imported into Nigeria and its remittance  – of this section shall be communicated by an authorized dealer to the Central Bank, within fourteen days of the repatriation and the Central Bank shall furnish same to the Minister on a monthly basis for information and statistical purposes only.”

 

According to this law, this means that the dispute should be between the four banks and the CBN, not MTN, but once again, the brand’s name has been dragged through the mud without a proper investigation into the issue.

 

Even after all parties expressed their innocence and provided substantial proof, the attorney general, reprimanded MTN again and slapped the company with $2.0 billion fine.

 

The fine is due to alleged lack of tax compliance by the telco and this comes after the company has revealed its books detailing an assessment of the full period in question. The numbers indicate that the total payments made to the tax authorities in regard to these foreign imports and payments in aggregate are $700 million and also detailed the valid reasons for the differences between the actual payments and the Attorney general’s assessment.

 

Through it all, the brand has remained calm and consistent with CEO Rob Shuter quoted by Bloomberg as saying that, “We have a proud history of being a major partner to the people of Nigeria and notwithstanding our current difficulties are firmly resolved to continue to do so”.

 

One of the key talking points about this story is how MTN has once again become the scapegoat in yet another episode of what many are calling a witch-hunt. The banks who were involved in this saga have been relegated to a sub-plot in a story which MTN is front and center and continually being labeled a villain.

 

This would have been somewhat justifiable if the facts actually added up; but all indications suggest that the CBN may not have done proper investigations before name-dropping these brands.

 

On MTN’s side of the story, the telecommunications giant has been open with their books, revealing their tax payments over the course of their operations in Nigeria, and even detailing their $18 billion-dollar investment in the country since it began operations. This is in addition to the N2 trillion paid in taxes and levies since it began operation in Nigeria.

 

This is particularly worrying considering the latest revelations of dwindling foreign investment in Nigeria. In recent years, Nigeria’s FDI has been struggling. It reached a mediocre $981mn in 2017, a far cry from its previous peak of $5bn in 2008.

 

The plummeting FDI situation is worsened by a poor investment climate characterized by overly stringent or impromptu government policies, bureaucratic bottlenecks for securing permits, and a weak legal framework.

 

MTN is one of our most successful foreign investors and instead of encouraging the multi-national company, it seems like the government is hell-bent on frustrating the company.

 

MTN has been slammed with fine after fine for some rather ludicrous reasons. Such punishments cannot be encouraging for would-be investors, many of whom already hold the notion that they are regarded as cash cows for exploitation by African governments.

 

It is also noteworthy that Nigeria’s GDP hasn’t been impressive of late; the country has suffered a yearly dip since 2014 when it peaked at $568.5 billion. Even with the 0.82 percent increase 2017, the nation’s gross domestic output is still suffering from the inconsistency of oil prices. The real take away from these numbers is, looking at how much MTN has paid in taxes and levies (in excess of 2 trillion Naira), and realising just how big a contributor they are to Nigeria’s GDP.

 

MTN has directly and indirectly, provided 500,000 jobs in Nigeria and has contributed immensely to the economy and it’s somewhat bizarre that such a huge company is being dragged in the mud before an appropriate investigation is even carried out.

 

If MTN is guilty of these crimes then, by all means, they should face the penalty, but considering just how much facts have been provided by the telecom giant, they seem pretty convinced of their innocence.

 

Furthermore, neither the CBN nor the attorney general has provided a direct response to the facts provided by MTN, making this whole ordeal even more worrisome.

 

The reasoning for this inexplicable witch-hunt is up for anyone’s guess. This may be due to a lack of oversight by the government or to protect private interests. However, the fact still remains, if the government and its policies continue to deter foreign investors, it is only a matter of time before we lose these multinationals.

 

In a bid to protect its assets and investors against further action from the Attorney General of the Federation and the Central Bank of Nigeria, MTN on Monday, September 10th filed for an injunctive relief with the Federal High Court in Lagos.

 

In a statement issued by the company, Tobe Okigbo, MTN Nigeria’s Corporate Relations Executive was quoted as saying;

 

“MTN Nigeria Communications Limited (MTN Nigeria) continues to categorically and unequivocally deny all charges related to the Central Bank of Nigeria (CBN) and Attorney General of the Federation (AGF) investigations into the company’s CCIs and unpaid taxes respectively.

 

“The simple reality is that MTN Nigeria has never repatriated dividends on the CCIs referenced by the CBN and that MTN is fully compliant with Nigerian tax law.

 

“In order to protect MTN Nigeria’s assets and shareholder rights within the confines of the law, we have applied today in the Federal High Court of Nigeria for injunctive relief restraining the CBN and the AGF from taking further action in respect of their orders, while we continue to engage with the relevant authorities on these matters.”

 

Only time will tell how this story will eventually end; but if history has taught us anything, it is that MTN will persist through this just like they have in previous occasions or maybe, just maybe this may be the straw that breaks the camel’s back.

* Tunji Andrews, a Lead Economist at Time, Trade and Commodities (TTAC), writes from Lagos.


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5 Common Backup Mistakes and How to Avoid Them

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Are you confident that your valuable data is protected from unexpected disasters or cyber threats? Consider this: 1 in 10 computers fall victim to viruses, and a staggering 113 phones are stolen every minute every day[1].

With data loss being a sudden and potentially irretrievable nightmare, ensuring reliable backups is non-negotiable. March 31st, celebrated as World Backup Day, is a poignant reminder of this essential task. Let’s delve into the common backup mistakes people make and how to steer clear of those.

1. Skipping regular backups:

The most common mistake is forgetting to back up data regularly. Whether personal files or crucial business documents, not establishing a consistent backup routine leaves you vulnerable to data loss.

Unexpected system crashes or malware attacks can happen anytime, making your precious data inaccessible or permanently lost. But you can help avoid such a situation by setting up automatic backups.

SSD Backup Mistakes to avoid
2. Putting all faith in a single backup device:

A device can get damaged or stolen, putting your backups at risk, so depending entirely on one storage medium is playing a dangerous game with your data’s safety.

 Instead, diversify your backup storage solutions with a combination of external HDDs, NAS, and cloud storage.

Portable HDDs like those from WD like Western Digital’s My Passport offer up to 5TB for simple, cost-effective backups. For smartphones, 2-in-1 flash drives such as SanDisk Ultra Dual Drive Go USB Type-C and SanDisk iXpand Flash Drive Luxe are convenient options.

These drives, compatible with USB Type-C devices, automatically back up photos, videos, and more. Just plug and play for seamless data transfer across devices.

If you need a device to store huge amounts of data, then the desktop drive called My Book  from WD is just the product for you, with up to 22TB of storage capacity.

SSD Backup Mistakes to avoid
storage device

3. Forgetting version control:

Overlooking version control during backups is another blunder. Not keeping multiple versions of files increases the chance of saving corrupted or wrong data over previous versions.

Without a proper versioning system, fixing mistakes or retrieving older versions can become a challenge. To prevent forgetting version control, establish a system that tracks changes to your files over time.

This ensures that you can always revert to earlier versions if needed, helping protect against accidental data loss or corruption.

Regularly maintaining this system will help you stay organized and prepared for any unforeseen issues.

Additionally, it’s crucial to verify the version you’re backing up to ensure it’s the correct one.

This simple step can help prevent accidental overwriting of important data with potentially corrupted or incorrect versions.

Double-checking ensures that you’re safeguarding the most up-to-date and accurate information, minimizing the risk of errors during backups.

SSD Backup Mistakes to avoid
4. Ignoring off-site backup solutions:

Many people overlook off-site backup solutions, assuming local backups are foolproof. However, relying solely on local backups makes you vulnerable to site-specific disasters like fires or theft.

Using off-site backups means keeping copies of your data in different places so that if something bad happens in one area, your data stays safe.

As an alternative, you could use cloud storage. Cloud backup devices are popular for remote data storage accessible via the internet. Various online cloud services offer features like file synchronization, sharing, and encryption for secure data storage.

5. Underestimating encryption:

Not prioritizing encryption in backups can be a costly mistake. Storing unencrypted backups makes your sensitive data vulnerable to unauthorized access or breaches.

Implementing strong encryption ensures even if your backups fall into the wrong hands, the data remains protected.

However, it is equally important to remember not to opt for out-of-the-box encryption solutions, as they might make it difficult for you to retrieve the backed-up information later.

My Passport HDD and My Book from WD come equipped with built-in 256-bit AES hardware encryption with password protection that helps keep content secure.

Additionally, maintaining proper key management practices is essential to ensure smooth decryption and access to your data when needed.

SSD Backup Mistakes to avoid
Monitor and storage device

This World Backup Day, Western Digital urges you to back up your data safely, and at the same time, prepare for the unexpected by having a contingency plan in place for device mishaps like crashes, theft, or damage.

Worrying about losing data isn’t something you have to lose sleep over if you have an active data backup strategy.

A common rule of thumb for keeping important data from disappearing forever is the 3-2-1 Rule. It dictates that you should:

3. Have THREE copies of your data. One is a primary backup and two are copies.

   2. Save copies of your backups on TWO different types of media or devices.

   1. ONE backup copy should be kept offsite in case of disaster.

Determine where and how you’ll store backup files and identify support contacts for swift assistance.

These proactive measures ensure quick data recovery and safeguard your cherished memories for the long haul.


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Treepz Doubles Down on Corporate Mobility in Africa with Launch of a New Website

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Treepz, Africa’s leading corporate mobility startup, has expanded its corporate mobility and employee transportation services across the continent with a fresh new look for its website.

 

The company’s new website boasts a sleek, user-friendly interface with added features to better showcase Treepz’s range of services for companies looking to efficiently and sustainably move employees and clients in major African cities. From on-demand employee shuttles, and school bus solutions to intra-city group trips for events and conferences, Treepz is positioning itself as an all-in-one corporate transportation provider.

Managing transportation logistics across multiple sites has always been an operational nightmare for companies,” said Onyeka Akumah, Co-Founder and Chief Executive Officer of Treepz. “Our goal is to streamline that experience through Treepz’s powerful technology platform.”

With nearly 6,000 employees of companies daily relying on Treepz’s innovative tech and reliable fleet for employee transportation or staff bus commutes, we understand the complexities of managing corporate transportation firsthand. “Our revamped website simplifies the process, offering businesses a seamless solution to optimize their transportation needs and empower their workforce in Nigeria, Kenya, Uganda and Ghana,” Onyeka added

Key Features of the New Treepz Website

  • Trackable Dashboard for a bird’s eye view of all guests’ trips in real-time when using Treepz.
  • 24/7 customer support to assist with all mobility inquiries.
  • Wide selection of vehicle options, each with professional drivers tailored to specific needs.
  • Friendly interface for easy navigation and booking.
  • Client testimonials and case studies showcasing Treepz’s success stories.

Treepz’s mission extends beyond just transportation – they aim to revolutionize how over 1 million daily commuters experience mobility across Africa. Since its launch in 2019, the company has provided employee transit for top firms like Tekexperts, Wakanow, Somasource, and Brighter Monday across Nigeria, Ghana, Kenya and Uganda. This has resulted in the transportation of about 5 million passengers since then.

With this digital reinvention, Treepz doubles down on transforming corporate mobility through tech-driven solutions. The company welcomes businesses seeking smarter ways to move their people to explore the new website www.treepz.com.


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Nigerian Business Leaders Partner Google for Strategic Advantage, Seeks Competitive Edge in Privacy-First Era

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Leading companies from Nigeria joined Google West Africa at a roundtable to discuss the shift towards privacy-first marketing as third-party cookies are phased out. The forum brought together leaders from FairMoney, Konga, Mondelez, Stanbic IBTC, and Zenith Bank, highlighting a collective commitment to redefining consumer engagement in the digital age.

Businesses recognize that building consumer trust is essential in a world that increasingly values privacy. In this new era, adapting marketing strategies to be more privacy-focused is not just a necessity but a strategic move towards building sustainable customer relations. This transition challenges businesses to innovate while maintaining transparency and respect for consumer data privacy, turning potential constraints into avenues for deeper consumer engagement.

“Customer trust is the new currency,” noted Felicia Otolorin, Senior Industry Lead, West Africa, Google. “Consumers are demanding more control over their data, and the savviest businesses are seeing this shift as an opportunity. This is about reimagining how we engage with technology and data, ensuring that innovation and privacy go hand-in-hand.”

The discussions emphasised this point, highlighting the competitive advantage of adopting privacy-first strategies. Google showcased innovative solutions like Google Tag and Enhanced Conversions. These tools demonstrate a commitment to both high performance and privacy standards. Success stories illustrated how other businesses have successfully navigated this shift, offering valuable insights.

“We stand at a crucial juncture,” remarked Oluwadamilare Akinwunmi, Chief Data & AI Officer at Interswitch. “The winners of tomorrow will be those enterprises that strike a balance between innovative, data-driven marketing and a profound commitment to data protection and privacy-first practices. The essential dialogues we engage in, and the subsequent actions we take, set us on the path to achieve precisely this”

The roundtable underscores a pivotal shift towards privacy-first strategies in Nigeria’s digital marketing sphere, emphasising the critical role of collaboration and innovation in this transition. It marks a collective stride towards a future where consumer trust and data privacy form the cornerstone of business growth and competitive advantage.

“We are committed to empowering Nigerian brands in building a privacy-forward future. By harnessing AI and privacy-centric technologies, we aim to empower our partners to thrive amidst these changes,” stated Felicia Otolorin, Senior Industry Lead, West Africa, Google.


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