Illegally repatriated $8.1bn dividends: Experts urge FG to settle CBN-MTN impasse

Financial experts on Thursday urged the Federal Government to ensure a quick resolution of the impasse between the Central Bank of Nigeria (CBN) and MTN Nigeria over illegally repatriated dividends.

The experts told the News Agency of Nigeria in separate interviews in Lagos that the issue needed to be resolved quickly in the interest of both parties and the Nigerian Stock Exchange (NSE).

Bamidele Ilo, acting head, Department of Banking and Finance, Olabisi Onabanjo University Ago-Iwoye, Ogun State, said the issue had lingered for too long and must be settled.
The CBN in September said it had investigated the activities of MTN and four banks in connection with what it called illegally repatriated dividends of $8.1 billion between 2007 and 2016.

Ilo said the issue should be resolved with dispatch, noting that the nation was losing as well as the company, saying, “The issuance of the MTN Nigeria Initial Public Offering (IPO) and listing of the shares on NSE would have brought a major boost to the market in terms of liquidity and market capitalisation.”
According to Ilo, the listing if not for the impasse would ensure further attraction of foreign portfolio investment funds into the economy, especially in a market where primary issues/new listings appear to have dried up in the last one decade.

“This delay in the issuance of the IPO and listing of the company’s share will definitely have negative implications on the activities of the NSE as foreign investors may also not have sufficient confidence investing the market,” he said.

Noting that the market had been on the downward trend since the beginning of the year, Ilo said foreign investors were already seeking alternative foreign investment widows due to usual uncertainties often associated with election period.

“It is important that the government finds a way of resolving the matter amicably in a win-win situation. The MTN Group needs the Nigeria market as MTN NG is the largest in the group and it is also the largest GSM network in Nigeria.
“Nigeria equally needs MTN NG not only in terms of the business it does but also in terms of its contributions to the Gross Domestic Product, tax revenue, employment and potential benefits that will accrue to the nation when its share are listed,” he said.

Also speaking, Garba Kurfi, managing director, APT Securities and Funds Limited, stressed the need for government to handle the issue in a way that it would not scare foreign investors from coming into Nigeria.

Kurfi said the government should introduce incentives such as tax relief to attract more companies into the market, and called on the government to encourage companies to list the way Ghana did for the telecoms companies that needed to upgrade to 4G.
However, Sheriffdeen Tella, who teaches Economics also at Olabisi Onabanjo University, said MTN was just using the IPO as a shield or negotiating instrument to force the CBN to reduce the amount or negotiate a favourable way out.

Tella said the recent fundraising activities by the CBN and Ministry of Finance that were quite successful showed Nigerian economy could not be neglected.

He pointed out that success recorded was an indication of the viability of raising capital in Nigeria, which should serve as an incentive for investors like the MTN.
“So, the firm knows it cannot ignore the Nigerian market in fundraising just as it cannot in marketing of its product.”

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