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Political capital

May 16 · Issue #7 · View online
iAfrikan Daily Brief
16 May 2001 is widely reported as the first time a GSM voice call was made in Nigeria. The company on whose network this historic call in Nigeria was made is said to be MTN Nigeria. The rest, as they say, is history.

Following that first voice call in 2001, MTN Nigeria went on to launch its services in Abuja, Lagos, and Port Harcourt. The company owned by South Africa’s MTN Group has gone on to become a very important corporate in the west African country and one of the largest companies in Nigeria. The company has been, for several years, a contentious one, between South Africa and Nigeria escalating all the way up to the highest political offices of each country.

Now, why is MTN Nigeria so important? Well, just slightly over 30% of MTN Group’s revenues come from its Nigerian subsidiary alone. This is despite MTN having operations in over 20 countries.
MTN Nigeria is the largest telecommunications company by number of subscribers and market share. The company has just over 65 million subscribers with its nearest rival in Nigeria, Airtel, having 45 million subscribers as per Nigerian Communications Commission statistics. 📷 Dami Akinbode/Unsplash
The height of this political squabble between Nigeria and South Africa (which among others, has seen Nigerian citizens marching to MTN offices - not marching to the South African High Commission in Abuja - protesting against xenophobic attacks against Nigerians in South Africa) was when the Nigerian Communications Commission handed MTN Nigeria a $5,2 billion fine for not complying, on time, with rules regarding unregistered SIM cards on its network. After much back and forth and political interference on both sides, the fine was reduced. However, what would prove pivotal and turning point in reducing tensions, was the clause accompanying the reduced fine that stated that MTN Nigeria would be required to list on the Nigerian Stock Exchange.

Today, MTN Nigeria makes its debut on the Nigerian Stock Exchange. Although it still has the issue of a $2 billion tax bill to settle in Nigeria, the appointment of ex-Central Bank of Nigeria governor and Emir of Kano, Sanusi Lamido, to the company’s International Advisory Board (IAB) chaired by Thabo Mbeki seems pivotal to easing tensions between South Africa and Nigeria considering that MTN Group said that “in recent years MTN Group has experienced challenging regulatory environments and highly competitive trading conditions” when announcing the IAB.

When you operate at the scale MTN operates, operating and investment capital is not sufficient. Political capital goes a long way to solving problems. 😉
⚖️ Investors who bought JUMIA shares after it made its debut on the New York Stock Exchange have launched a class action lawsuit against the e-commerce company. They are accusing JUMIA of making “materially false and misleading statements and omissions” during and after its IPO. Link

📈 MTN Nigeria 🇳🇬 is set to finally make its debut on the Nigerian Stock Exchange today, 16 May 2019. Small catch though, they are not available for purchase to the general public yet. Link

🎶 The political economy of music distribution goes unchecked. Despite increased digital revenues, also across Africa, music markets remain characterised by bottlenecks between musicians and audiences. Link

🚀 South African financial services startups invited to apply for one of the country’s most prestigious incubation programmes. 8 qualifying South African FinTech startups will each receive a package valued at R2 million each including R1 million in grant funding and R1 million in support services. Link

😔 The digital divide is widening by the day; the average Ugandan probably enjoys an average slow-motion 256 kbps Internet speed, despite existence of ultra-fast 4G connections in select (urban) areas. Most remarkably, the Internet now grabs the headlines in Africa, but the truth is HIV is spreading even faster. Link
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