(HONEST WRITE-UP) Feyi Fawehinmi: In the name of the people?

Being big in Nigeria comes with disadvantages. The most obvious one is that it makes you a big and clear target for rapacious governments if you happen to operate in such a political environment.

By any measure, MTN Nigeria is big in the country. Some of the numbers are staggering. It serves 58 million customers. It has spent N3.2trn building its network to serve those customers since it started operating in Nigeria. It has paid a total of N1.6trn covering around 26 different taxes and levies to the Nigerian government since 2001. Directly and indirectly, around 500,000 Nigerians have been employed as a result of MTN’s activities in Nigeria. It’s 17,000 kilometres of fibre optic cables in Nigeria are its contribution to internet penetration in the country.

It’s safe to say the company has had its most challenging year in Nigeria lately. There was the huge fine slapped on it for failing to disconnect unregistered lines which was so out of proportion that it threatened to wipe out the company. No sooner had that been settled, then came the allegation from the Nigerian Senate, spearheaded by Senator Dino Melaye, that between 2006 and 2016, MTN illegally repatriated $13.92bn out of Nigeria. Whether out of genuine ignorance or malice, Senator Dino Melaye has launched an attack that is capable of doing serious damage to the Nigerian economy. Perhaps it is important to add that Senator Melaye has a habit of throwing wild figures around such as the TSA and Remita matter. He also once claimed that Heathrow Airport’s Terminal 5 cost N22bn to build when it actually cost £4.2bn. He and arithmetic have never been best of friends.

We elect lawmakers to act on our behalf in the National Assembly. That is, we expect them to act in our best interests as a people and as a nation. We do not elect them to do economic damage to us in the name of a misguided witch hunt. There is no merit to Senator Melaye’s allegation – it is entirely baseless. However it was made on the floor of the Nigerian Senate which means that we must take it seriously. The matter is simple enough – over a period of 10 years, MTN Nigeria brought a total of $403m into Nigeria. Out of that, $285m was paid to NCC as licence fees and the rest was used to invest in the company’s operations. When you bring in money into Nigeria, you get a Certificate of Capital Importation (CCI) which ensures that you are able to take your money out as and when you need to.

The Senate’s entire allegation rests on the idea that CCIs were not obtained within 24 hours. But even the CBN made allowance for the possibility that it is not always possible to get CCIs within 24 hours by asking that banks refer such cases to it for approval. What is most important is that MTN Nigeria got a CCI for ALL the money it brought into the country. It therefore was completely within the law to take money out of the country when it needed to.

There is a lot at stake here for Nigeria and Nigerians. To successfully find MTN Nigeria guilty, the Senate has to completely disregard various other Nigerian laws including the Nigerian Investment Promotion Act which allows companies repatriate all profits and dividends out of Nigeria as long as they have paid the relevant taxes and charges. This sends a dangerous message – if lawmakers can go into the past and rewrite rules and regulations just to arrive at a predetermined conclusion, nothing is safe anymore. Anyone who wants to invest in Nigeria will note this and act accordingly. The effect is to reduce investment in Nigeria and leave Nigerians poorer. Who voted for lawmakers to impoverish Nigerians?

Nigerians should understand that this is beyond MTN Nigeria. It is worth repeating – the company has committed no crime whatsoever. But the Nigerian Senate is able to drag them over hot coal just because they claim to be acting in the name of the people. It is MTN Nigeria today but this same treatment can be handed out to practically any foreign investor. A bored Senator might go far back into the past and reinterpret the laws as he sees fit to find one target company guilty. And he will be doing it in the name of the Nigerian people.

Our nation’s progress and prosperity is at stake when our laws no longer mean anything. Opportunities for Nigerians to make progress and attain economic freedom will be severely restricted when laws mean nothing more than what someone says they mean at a given point in time. We might as well abolish the rule of law and become a lawless society.

The reason why poor countries like Nigeria need a lot of foreign investment is because the process of capital accumulation is long and hard. A good example of this is Nigerian pension reforms. It has taken more than 10 years to get to the point where 7 million Nigerians have accumulated capital that can be deployed in the economy. Even with that, we are yet to see the full benefits as the majority of pension funds are simply invested in government bonds. At this rate, it might be another 10 years or more before we start seeing pension funds investments in things like the roads, bridges and power plants that the country desperately needs.

Foreign investors like MTN Nigeria help to speed up the development process by bringing in capital from richer countries and deploying it in Nigeria for a profit. If all goes well, they make a profit and Nigerians benefit from the investments. Afterall, an investment that does not grow cannot make a profit for them to repatriate. MTN Nigeria brought in foreign capital to Nigeria. They made money and paid a huge amount in taxes, Nigerians got jobs and phones and the extra convenience that cannot be easily quantified. This is a win win for everyone involved and no law was broken.

Nigerians must know where exactly their bread is being buttered. When lawmakers are embarking on a witch hunt, we must tell them that they are not acting in the name of the people. We must let them know we do not approve of actions that will make Nigeria a poorer country.

Anything else will be a disaster.

Feyi Fawehinmi writes from the UK.

He is an accountant and has worked in the UK’s financial services for the past 10 years. His experience covers investment banking, private equity, asset management and insurance. He blogs regularly on Nigeria and economic policies on aguntasolo.co and is an amateur photographer in his spare time. He lives in the UK with his family.

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One Comment Add yours

  1. Chrisyinks says:

    Brilliant article…as usual!

    Like

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