Don’t worry about short-term economic volatility, says MTN chairman
In June 2016, the South African-headquartered company resolved to pay a 330 billion Nigerian Naira (about 1.1 billion US dollars at the current exchange rate) regulatory fine imposed on it in 2015 for failing to deactivate more than five million unregistered SIM cards.In addition, Nigeria has been experiencing significant economic headwinds due to the fall in the price of oil, which accounts for the vast majority of the country’s foreign earnings. The economy was also in recession during 2016, with GDP shrinking by an estimated 1.5%. “The operating environment continued to be difficult with the contraction of the economy impacting consumer spending,” said MTN in its annual report for the year ended 31 December 2016.
However, if MTN executive chairman Phuthuma Nhleko is discouraged by events in Nigeria, he is not showing it. Speaking during a panel discussion at the recent Africa CEO Forum – held in Geneva, Switzerland – Nhleko described Nigeria’s oil-induced economic troubles as not uncommon for emerging markets.
“I think we do have a situation where a lot of economies, particularly emerging markets that are not sufficiently diversified, will tend to be far more impacted by the fall of a particular commodity. In this particular case it’s oil,” he said.