MTN Nigeria Communications Plc’s shares have continued to rally after the Nigerian government raised telecommunications tariffs by 50% to offset the impact of the collapse in the naira and surging inflation.
The stock surged the maximum 10% to 256.30 naira at close in Lagos, the commercial capital. Rival Airtel Africa Plc was unchanged at 2,156.90 naira.
The Nigerian Communications Commission announced the tariff hike late Monday to “support the ability of operators to continue investing in infrastructure and innovation,” according to a statement.
The tariff increase — the first in more than a decade — was half of what companies such as MTN had asked for to weather harsh economic conditions, including a 41% depreciation in the naira against the dollar last year and inflation running near a three-decade high.
Even so, MTN Nigeria Chief Executive Officer Karl Toriola said the adjustment was “an important step toward addressing the impact of the prevailing economic challenges on the company and industry. “It will enable us to maintain the critical investments required to deliver reliable, high-quality services,” he said in a filing to the Nigerian Exchange Group.
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