South Africa’s MTN $5.2B Fine In Nigeria Becomes A Diplomatic Issue

Presidents of Africa’s two largest economies, Nigeria and South Africa, are set to meet this week to deliberate over the $5.2 billion fine hanging over the continent largest mobile operator, MTN Group.

According to Sunday Times, Nigeria’s President Muhammadu Buhari will meet with his South African counterpart, President Jacob Zuma, during the second China-Africa Co-operation summit to be held in Johannesburg this week.

The two will also discuss other sensitive diplomatic issues that have strained the two country’s relation over the last one year, including the xenophobic attacks on Nigerian living in South Africa earlier this year.

The event takes place on December 4-5 at the Sandton Convention Centre.

South Africa’s MTN Group unit in Nigeria was last in late October slapped with the largest penalty any African company has ever faced after the Nigerian Communication Commission (NCC) fined it about $1,000 for each of the 5.1 million subscribers it allowed to operate in West African nation with an unregistered SIM card beyond a September deactivation deadline expired.

Nigeria’s communications technology minister Adebayo Shittu told newspapers in the West African country that MTN’s final fate regarding the fine lied in Buhari’s hands.

MTN is the largest mobile operator in the Nigeria with over 63 million subscribers.

Clayson Monyela, spokesman for the Department of International Relations, told the Sunday Times that government was monitoring the development with keen interest.

“The matter between MTN and Nigeria is between a private company and issues of compliance in a market they do business in,” Monyela said.

A November 17 deadline to pay the fine was scrapped to allow for negotiations to take place between officials of the two countries and insider trading investigations at the Johannesburg Stock Exchange (JSE) to be concluded.

MTN shares at the JSE have shed about a fifth of their value since the fine was announced as jittery investors exited on concerns over the future of the company in one of its most profitable markets.

MTN’s group chief executive officer Sifiso Dabengwa subsequently quit while the company’s former CEO Phuthuma Nhleko was then appointed as executive chairperson and tasked with tackling the fine.

Source: AFK Insider

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