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Facts, Fiction in CBN Fine on MTN Nigeria

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The Central Bank of Nigeria on Wednesday, 28th August 2018, announced that it is imposing sanctions on four (4) banks for facilitating the ‘illegal’ repatriation of capital from Nigeria on behalf of MTN Nigeria and its shareholders.

This surreptitiously followed the publication of an ‘exclusive’ on Sahara Reporters alleging that the Central Bank Governor, Godwin Emefiele, was reluctant to fine unspecified individuals, corporate bodies and other entities for unlawful conduct in respect of repatriation of dividends to offshore shareholders of MTN Communications Nigeria Limited.

This follows in the heels of a N330 billion fine that was imposed on the Information and Communications Technology (ICT) company by Nigeria’s telecommunication regulator, Nigerian Communications Commission (NCC) in October 2015.

The hefty fine has since resulted in a very significant fall in MTN Nigeria’s share price and the timing of the fining, coupled with continuously rising red flags has developed intense speculation as to the veracity of the allegations that have been made.

This has brought to the fore certain issues that require answers: The National Assembly investigations were completed in 2017, what has spurred on the CBN to act at this moment?

If the Central Bank of Nigeria has approved the accounts of these (Standard Chartered, Stanbic, Citibank and Diamond)banks for the last ten years and continued to approve the repatriation of funds by MTN, then could it have knowingly approved transactions it believed to be fraudulent?

When did the CBN determine that MTN and the banks were culpable of such ‘illegal conducts’ and what has caused the CBN to allow MTN to repatriate funds since 2015?

Why do these infractions cover only the period 2007 to 2015? What conditions changed in 2015? Does this allude to the fact that all MTN dividend and capital repatriation payments since 2015 will be deemed illegitimate or fraudulent? If so, how will that be possible, with the same CCIs issued?

These niggling questions need to be answered as soon as possible as investor confidence in Nigeria is quickly depleting as a result of the recent actions of CBN.


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Ugo Onwuaso is an ICT enthusiast. He believes technology should be used for general good. He holds a Master of Public Administration (MPA) degree from the Lagos state University. Dear Reader, Your support matters. But we believe that technology makes life more exciting and helps improve the lives of people around Nigeria and indeed the world. That is why, we have devoted our energy to independent reportage of technology and finance and how they affect lives. Our incisive and analytical view of how technology news affects the daily life help individuals and organizations make up their minds. Quality journalism costs money. Today, we're asking that you support us to do more. Kindly support our effort to deliver technology and finance journalism to everyone in the world. Donate as little as N1,000. Bank transfers can be made to: UBA Plc 1017156876 Communication Week Media Ltd

Special Reports

Tizeti to Host Global Tech Leaders, Startups @NeXTGEN Tech Conference

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Tizeti, West Africa’s pioneer solar-based internet service provider, is set to host technology enthusiasts, IT innovators, startup executives, corporate business leaders, and digital thought leaders at the second edition of its futuristic Tizeti NeXTGEN conference themed “The Next Frontier”.

Tizeti’s NeXTGEN conference, which coincides with its 10th anniversary, will feature an exciting array of speakers, over 500 physical and virtual attendees and conversations on Africa’s digital environment, highlighting the role of digital transformation in empowering more Nigerians, stimulating economic activity, and providing a foundation for a robust and thriving ecosystem to enable digital leadership for Africa in, the 4.0 world.

Speaking ahead of the conference, Kendall Ananyi, founder and Chief Executive Officer of Tizeti, said Tizeti’s NeXTGEN conference will announce new digital innovations and products, explore new partnerships, and articulate strategies to accelerate Africa’s digitization.

According to him, the edition’s theme, ‘The Next Frontier’ reflects the company’s belief that the next source of digital growth in Africa, given the continent’s market of over 1 billion people, its vibrant entrepreneurial ecosystem, and the flurry of initiatives and investments launched to connect Africans to the internet.

“This NeXTGEN conference is particularly memorable for us because it’s our second event and coincides with our 10th anniversary.

“In 10 years, Nigeria has done significantly well in the tech space by attracting over $4b investments, building global brands, and emerging as the unicorn capital of Africa, all these with less than 40% internet penetration.

“With more connected states, improved broadband access, and strategic partnerships, Nigeria and Africa can accelerate tech development, empower more people, stimulate the economy, and widen the broadband envelope in Africa”, Ananyi said.

Ananyi notes that the technology conference will feature product launches on Tizeti’s plans around Next Generation Unlimited Wi-Fi and Customer Service, and expanding access to unlimited internet in Africa.

Tizeti’s NeXTGEN, which will hold on August 5, 2022, will provide an opportunity for stakeholders in African telecommunications, technology, and business communities to share their ambitions for Africa’s next frontier, while networking, discovering new opportunities and discussing breakthrough trends in the global and African telecoms and technology ecosystem.


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All You Need to Know About Paradigm Initiative’s 3-day Digital Policy Workshop in Tanzania

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Paradigm Initiative, a pan-African social enterprise working to advance digital rights and inclusion in Africa, has concluded a 3-day Digital Policy Workshop for Tanzanian Digital Rights Stakeholders from 7th-9th July 2020.

Over 100 people applied to attend the workshop with over 65 persons selected to participate.

The workshop was officially opened by Nnenna Paul-Ugochukwu, chief operating officer, Paradigm Initiative and took place over the course of three days, introducing participants to the basic concepts of digital rights and the existing policy, legal and institutional framework in Tanzania.

The workshop specifically examined Tanzania’s Cybercrimes Act and the Electronic and Postal Communications Act (EPOCA).

According to Ekai Nabenyo, program officer at Paradigm Initiative, “It is evident that there is an urgent need to create an empowered civil society and digital rights community for the Republic of Tanzania to be able to safeguard its citizens’ digital rights”.

“The civil society should be empowered to shape and dictate digital policy in the country,” Ekai further states.

Participants urged the government of Tanzania to respect the rights of its citizens and to provide the necessary platform for civil society to oversee government adherence to its human rights obligations as election dates draw closer.

They also expressed concerns that the current digital policy environment provides a fertile platform for human rights violations and a tendency for impunity on the part of state officials.

“As a digital rights advocacy organization, we endeavor to continue to closely monitor the state of digital rights in Tanzania.

“We shall continue to work with other stakeholders to build the capacity of civil society groups to be able to competently influence, protect and safeguard digital rights in Tanzania and in the region, through similar interventions” says Adeboye Adegoke, senior program manager at Paradigm Initiative.

The end goal of the workshop is to ensure that stakeholders in Tanzania that already understand and follow current trends in digital rights, Tanzania civil society groups, and others can leverage the expertise of Paradigm Initiative and its partners to be able to work together with the regulatory authority and the parliament in Tanzania towards improving the state of digital rights in the country.

Participants agreed to work together in order to present a united and formidable force in its advocacy engagements in Tanzania.

 


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Will Nigeria’s economic outlook be influenced by the presidential elections?

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By Lukman Otunuga, FXTM Research Analyst

This will be a monumental month for the largest economy in Africa as parliamentary and presidential elections are scheduled to take place on February 16.

 

Although Nigeria’s economy is expected to accelerate during the first half of 2019 thanks to increased government spending ahead of the elections, the nation’s fate will hang on the election outcome. The nation’s macroeconomic conditions remain worrying with the unemployment rate sitting at 23.1% and the IMF cutting the nation’s growth forecast for 2019. With oil prices heavily depressed and geopolitical risk factors in the form of trade tensions compounding downside risks, major changes are needed in Nigeria to weather against the storm. There was initially a strong sense of optimism over President Buhari elevating the nation by restoring economic growth, fighting corruption and restoring security. However, with inflation rising to worrying levels, Nigeria experiencing a recession and the Naira sharply depreciating under his presidency, will Buhari be offered another chance to fulfil his promises?

 

Nigeria’s economic potential is unlimited, but this can only be fully unleashed with the right leadership. With a youthful population and fertile land, the ingredients for self-sufficiency are already present. It is widely known that the nation’s illness remains oil reliance with the cure found in diversification. But what has truly been done these past four years to limit the nation’s exposure from oil shocks? The IMF continued to warn Nigeria to intensify economic diversification last year in the light of severely depressed oil prices. Although there have been repeated talks about investment in agriculture and sourcing growth from other non-oil sectors, economic growth in 2017 expanded a tepid 0.8% with growth in 2018 seen hitting 2%. While the current president is pledging to boost infrastructure spending on transportation and electricity, will voters be willing to listen?

 

Taking a look at the current macro-economics, high unemployment is a sore spot that needs to be mended while inflation is slowly rising due to government spending. Although the encouraging foreign exchange reserve figures for January are good news for the Naira, the Central Bank of Nigeria’s repeated intervention remains a short-term solution to a longer-term problem. A free-floating Naira if it becomes a reality is poised to attract foreign investors as an element of confusion over the multiple exchange rates is removed. While the encouraging manufacturing figures for January are a welcome development, data needs to respect this positive pattern for sentiment to improve in the near term. It will be interesting to see how the Naira and Nigerian Stock Exchange both react to the presidential elections. Investors may use these as proxies to gauge how markets feel about the outcome.

 

When looking at the Nigerian elections one must always expect the unexpected, especially when considering how there are no reliable opinion polls. While the outcome remains uncertain, it will certainly have a lasting impact on Nigeria’s economy in the medium to longer term


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