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Like South Africa, MTN’s facing a row of back-crushing challenges
By Tajudeen Hamzat
Feelers available to The Difference indicate that the rating agency, Moody’s is set to hand another damning blow to the embattled South Africa-originating telecommunications player, MTN in the form of a possible downgrade.
This is coming on the heels of a recent fine handed over to the African telecommunications behemoth by the Nigerian authorities on account of an alleged $8.1billion illegal remittances transfer carried out on its behalf by its bankers. This has since been followed by another demand notice from another agency of the Nigerian government demanding that MTN should immediately pay up back taxes of about $2billion.
Nigeria is South Africa’s biggest market and the company had only two years ago paid an earlier fine on account of unregistered SIM data.
The fear among business watchers is that a downgrade from Moody’s may likely trigger corresponding downgrades from other respected global rating agencies as Standard and Poor even as it forebodes more trouble for the South African economy that slipped into recession a few days ago.
Reflating the South African economy was also one of the planks upon which incumbent President Cyril Ramaphosa rode to the leadership of the ruling ANC and the nation only a few months back. The Ramaphosa government also has to show evidence of positive economic performance in the General Elections that would hold in the next few months.
Rob Shuter, MTN Africa Group CEO
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