By Adedapo Adesanya
One of the leading telecommunications providers in Africa, MTN Group, has said the economic reforms of President Bola Tinubu would boost its operations in Nigeria, noting that the country will overcome the short-term “pain” of the policies by the middle of next year.
The chief executive of the South African telco, Mr Ralph Mupita, said this in an interview with Bloomberg Television aired on Thursday.
Though he said the firm was not insulated from the effect of the policies, it was very necessary for the country to undergo structural reforms to move forward.
“With the removal of the subsidy and liberalization of the naira, we always knew it was going to take us a couple of quarters for those shocks to work through the system,” he said, adding that, “And beyond that — we see our business being able to pick up growth and repair the profit and earnings profile of the group.”
When President Tinubu took office in late May, he first instituted the removal of fuel subsidies and within two weeks, it came up with the exchange rate unification which saw the Naira plunge.
Nigeria is MTN’s biggest market by subscribers and the Nigerian Exchange Limited (NGX) listed coy contributes more than 30 per cent of the group’s total revenue.
As a result of the new administration’s rate devaluation, the earnings of companies were affected, while the removal of fuel subsidies contributed to inflation.
MTN said it was “very constructive” on Nigeria in the medium-to-long term and that the policy reforms underpinned the investment case for the company in the country.
“Nigeria drives growth in digital adoption and financial inclusion. MTN has Nigeria as a big growth vector for the company,” he said.
Despite the environment, MTN delivered solid financial results in the third quarter ended September 30.
MTN reported a nine-month earnings increase to $3.84 billion, marking an improvement during the same period last year. This growth was achieved even amid challenging macroeconomic conditions and inflationary pressures.
According to Mr Mupita, forex markets remained volatile in the period, with local currencies under pressure against the US dollar and constrained availability of forex, particularly in Nigeria.
