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Why MTN Nigeria’s Success is Example of NCC’s Regulatory Excellence, MTN’s Sound Corporate Governance

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MTN Nigeria turned 20 years old last Sunday and beyond the obligatory popping of champagne and celebrations by MTN and others in the Telecommunications sector, there is a need to point out that without certain ducks perfectly lining up in a row the MTN success story would not have happened at all.

First of all, hats off to the Nigerian Communications Commission (NCC) for overseeing the growth of one of the most important sectors in Nigeria’s economy today.

In the early days of the Telecommunications revolution, steady leadership by the NCC helped to steer the sector through many stormy waters.

That leadership has allowed MTN to grow to become by far the largest Telco in the country. It is today a N3.5 trillion (market capitalization) behemoth in Nigeria’s economic space, facilitating economic activities across wide sectors as well as driving innovation.

It is probably incomprehensible to today’s young people how the country would have functioned without an MTN. However, 20 years ago instant communications were virtually non-existent to 99 percent of Nigerians.

The telecommunications revolution has changed all that and Nigerians today are integrated fully into the domestic and global communications network facilitated by billions of dollars of investments undertaken by Telcos like MTN.

In the first half of 2021 alone Capital expenditure by MTN was up by 39.1 percent to N186.4 billion. MTN plans to connect approximately 1,000 rural communities to its network this year with an additional 2,000 communities in 2022. In the next 3 years, MTN says it will invest over N600 billion to expand broadband access across the country in support of the Government’s Broadband Plan.

Perhaps with a bigger sense of responsibility and coming to terms with the dominant role it plays in Nigeria’s economy and in the lives of Nigerians, MTN’s Board of Directors approved its participation in the Federal Government’s Road Infrastructure Tax Credit (RITC) Scheme in response to Government’s drive towards public-private partnerships in the rehabilitation of critical road infrastructure in Nigeria.

As part of the scheme MTN intends to participate in the restoration and refurbishment of the Enugu-Onitsha Expressway.

In line with its desire to plant deeper and more permanent roots in Nigeria, MTN has also initiated plans to commission a purpose-built, state of the art MTN Head Office, designed to act as a central hub for its network, and a catalyst for creativity and innovation.

Following MTN Group’s stated intention to sell down up to 14% of its investment in MTN Nigeria, subject to market conditions over the medium-term, MTN Nigeria’s shareholders approved an equity shelf programme at the last Annual General Meeting.

This will facilitate a process to increase ownership of the Company by more Nigerian retail and institutional investors.

Alongside this, MTN further localised its predominantly Nigerian management team with the appointment of Nigerians to two key senior positions (Chief Marketing Officer and Chief Information Officer) previously held by expatriates.

MTN is listed on the Nigeria Exchange Group where Nigerians can buy the shares and own a piece of one of the most innovative growth companies in the country today. That listing has also provided an avenue for Pension Funds to invest their assets into an innovative Nigerian growth company.

For those that are already shareholders, MTN has announced an interim dividend of N4.55 kobo per share is to be paid out of distributable net income. This represents a growth of 30 percent over N3.50 kobo per share paid in H1 2020.

The major lesson in all these is the economic growth that can happen with an alignment of sound regulatory practices and solid corporate governance by the private sector. The capital investments being undertaken by MTN (N200bn a year on broadband alone) is something the Nigerian government is ill equipped to undertake and best left to the private sector.

MTN’s success is also a result of hard work and lack of one-man founder ownership that often kills major Nigerian businesses or at best keeps them perpetually below their potential!

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