According to industry reports, MTN’s share price has plummeted by 29% since the beginning of the year due to Nigeria’s recently announced changes to the exchange rate of its currency – the Naira.
Despite Nigeria’s economic and political challenges, the country still contributes around 40% of MTN’s service revenue and 46% of their earnings before interest, tax, depreciation, and amortisation. This is why MTN remains committed to Nigeria, even though the country has caused wild swings in the company’s share price.
From 2014 to 2015, MTN had a successful run with their share price trading between two particular numbers. However, in late 2015, the Nigerian Communications Commission imposed a fine of millions of US dollars on MTN for non-compliance with SIM registration regulations.
MTN negotiated the fine down to a US$261 million settlement over three years, which was still significant. There were several other fines and disputes between MTN and the Nigerian authorities between 2015 and 2024, the most recent being a US$72 million back-tax bill from the Nigerian Tax Appeal Tribunal.
MTN’s current struggles are related to foreign exchange. Although Nigeria officially lifted the Naira-dollar peg in June 2023, issues still abound, putting companies like MTN at a disadvantage and significantly hitting their headline earnings.