Economy
MTN Plans $2.1bn Investment Across African Markets in 2024
By Adedapo Adesanya
Africa’s top telecommunication service, MTN Group, plans to invest up to $2.1 billion (about 39 billion Rands) in 2024 to capture the structural demand for data and fintech services across Africa.
This was disclosed by MTN Group President and CEO, Mr Ralph Mupita, after the company reported growth for 2023 in the face of tough macro headwinds.
On Monday, the telco declared a total dividend of 330 cents per share.
It disclosed that inflation remained elevated in several key markets and the sharp devaluation of the Nigerian naira impacted reported results for both MTN Nigeria and MTN Group.
Amid sustained high demand for data and fintech services, MTN Group increased the number of active data subscribers by more than 9 per cent to 150 million – half the total subscriber base – and active Mobile Money (MoMo) users by 5% to 72.5 million. Total subscribers increased to 295 million across the Group’s markets.
In the year ended December 2023, data traffic on MTN’s networks (excluding joint ventures) grew by more than a third, with usage up to an average of more than 6GB per user per month. To sustain this growth, as well as network coverage and quality, MTN deployed capital expenditure (excluding leases) of R41 billion in the year.
The volume of fintech transactions also increased by around a third to 17.6 billion, with the value of transactions across the fintech platform up at $272 billion, driven by the growth of advanced services in payments, banktech and remittance solutions.
In South Africa, where the business faced load-shedding challenges, subsidiary MTN South Africa deployed R10 billion of capex to drive network capacity expansion and power resilience. More than R2.6 billion of this was an investment in power and security resilience. By the end of the year, network availability across the entire network reached around 95 per cent.
“For the sites where we had completed our resilience investment, we recorded network availability of more than 98 per cent,” the company revealed.
MTN South Africa reported solid growth in the consumer postpaid, enterprise and wholesale businesses. In the second half of the year, there were also sequential improvements in the consumer prepaid business.
In the year, MTN Group made good strategic progress in the development of our fintech and fibre businesses. A key highlight was agreeing for payment network processor Mastercard to invest up to US$200 million for a minority stake in MTN Group Fintech at a valuation of US$5.2 billion.
Speaking on this, Mr Mupita said, “We are excited about this partnership, particularly the commercial agreements, which we expect to support the accelerated growth of our fintech business.
“In 2023, we also advanced our work to structurally separate the fibre business, Bayobab, with engagements to secure regulatory clearances in key markets being the main priority.”
In the year, Bayobab and Africa50 partnered to develop Project East2West, a terrestrial fibre optic cable network to help bridge Africa’s connectivity gap by improving broadband access for the continent’s landlocked countries in particular.
The MTN Group also noted another strategic progress which was a 13.1 per cent absolute reduction in Scope 1 and 2 emissions.
“This is part of our environmental commitment to reach Net Zero emissions by 2040. We also finalised the sale of MTN Afghanistan, which completed the Group’s exit of our consolidated subsidiaries in the Middle East,” it added.
In the year, MTN Group’s finances withstood a challenging external environment, marked by elevated inflation (averaging a blended 16.7 per cent ), forex volatility and paucity, and ongoing political tensions in some markets, most notably in Sudan.
In constant currency terms, MTN Group service revenue grew 13.5 per cent to R210 billion, with data revenue making up R84 billion and voice revenue contributing R83 billion. Fintech revenue totalled R21 billion.
Earnings before interest, tax, depreciation and amortisation grew by almost 10 per cent in constant currency terms to R90 billion.
The Group delivered expense efficiencies of R2.6 billion and kept key debt ratios within covenant levels.
Looking ahead, Mr Mupita said MTN remained focused on executing Ambition 2025: sustaining operational momentum, accelerating the platform strategy, driving expense and capital efficiencies, and continuing to strengthen the balance sheet.
“We are anticipating that the macro conditions in our trading environment will persist in 2024, with naira volatility and elevated inflation the key challenges we will need to navigate. MTN plans to invest R35-39 billion in 2024 to position the company to capture the structural demand for data and fintech services across Africa,” he said.
“We maintain our overall medium-term guidance framework, however simplifying our objective for fintech,” Mr Mupita said, adding that MTN was encouraged by the outlook for the fintech business, given the solid growth in advanced services.
“The partnership with Mastercard positions the business well to scale faster and we are excited about the commercial launches of card issuance, acceptance and remittances across the footprint.”
By Aduragbemi Omiyale
On Tuesday, December 17, 2024, President Bola Tinubu will present the 2025 budget to a joint session of the National Assembly.
The size of the 2025 Appropriation Bill is about N47.9 trillion and would be presented to the parliament for approval.
Speaking at the plenary on Thursday, December 12, 2024, the President of the Senate, Mr Godswill Akpabio, said the presentation by Mr Tinubu would be at the chamber of the House of Representatives.
However, it is not certain if the lawmakers will pass the budget before December 31 to allow for a recent budget cycle of January to December.
Recall that on December 3, the senate approved the Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) for 2025 to 2027.
This was after the President presented this the National Assembly on November 19 ahead of the consideration of the 2025 budget proposal.
In the MTEF/FSP, the government said it planned to borrow about N9.22 trillion from local and foreign sources to finance the budget deficit.
It pegged the crude oil benchmark at $75 per barrel and a daily oil production of 2.06 million barrels at an exchange rate of N1,400 to $1, and a targeted gross domestic product (GDP) growth rate of 6.4 percent.
At the plenary today, Mr Akpabio informed his colleagues that, “The President has made his intention known to the National Assembly to present the 2025 budget to the joint session of the National Assembly on December 17, 2024.”
By Adedapo Adesanya
Nigeria added 150,000 barrels per day to its crude production in November 2024 as it continues to pursue an ambitious 2 million barrels per day target.
According to the Organisation of the Petroleum Exporting Countries (OPEC), Nigeria’s oil production rose to 1.48 million barrels per day in November, up from 1.33 million barrels per day the previous month.
In its Monthly Oil Market Report (MOMR), OPEC revealed that at 1.48 million barrels per day, it is the continent’s leading oil producer, surpassing Algeria’s 908,000 barrels per day and Congo’s 268,000 barrels per day.
Business Post reports that OPEC doesn’t account for condensates, which Nigeria’s accounts for in its broader 2 million barrels per day target.
Despite the surge in production levels, Nigeria is still under producing its 1.5 million barrels per day output quota under a deal involving OPEC and 10 other producers known as OPEC+.
OPEC said it relied on primary data gotten through direct communication, noting that secondary sources reported 1.417 million barrels per day as Nigeria’s crude production in November — up from 1.4 million barrels per day in October.
The data also shows that OPEC’s total oil production among its 12 members rose by 104,000 barrels per day in the month under review.
According to secondary sources, the total of the 12 OPEC countries’ crude oil production averaged 26.66 million barrels per day in November 2024.
“Crude oil output increased mainly in Libya, Iran, and Nigeria, while production in Iraq, Venezuela, and Kuwait decreased”, OPEC said.
“At the same time, total non-OPEC DoC crude oil production averaged 14.01 mb/d in November 2024, which is 219 tb/d higher, m-o-m. Crude oil output increased mainly in Kazakhstan and Malaysia,” the organisation added.
In a related development, OPEC trimmed its 2024 and 2025 oil demand growth forecasts for the fifth time this year.
Now, the cartel expects the world’s oil demand growth at 1.61 million barrels per day from the previously 1.82 million barrels per day.
For 2025, OPEC says the world oil demand growth forecast is now at 1.45 million barrels per day, a 900,000 barrels per day cut from the previously expected 1.54 million barrels per day.
On the changes, OPEC says that the downgrade for this year owes to more bearish data received in the third quarter of 2024 while the projections for next year relate to the potential impact that will arise from US tariffs.
By Adedapo Adesanya
The duo of Afriland Properties Plc and Geo-Fluids Plc crashed the NASD Over-the-Counter (OTC) Securities Exchange by a marginal 0.06 per cent on Wednesday, December 11 due to profit-taking activities.
The OTC securities exchange experienced a downfall at midweek despite UBN Property Plc posting a price appreciation of 17 Kobo to close at N1.96 per share, in contrast to Tuesday’s closing price of N1.79.
Business Post reports that Afriland Properties Plc slid by N1.14 to finish at N15.80 per unit versus the preceding day’s N16.94 per unit, and Geo-Fluids Plc declined by 1 Kobo to trade at N3.92 per share compared with the N3.93 it ended a day earlier.
At the close of transactions, the market capitalisation of the bourse, which measures the total value of securities on the platform, shrank by N650 million to finish at N1.055 trillion compared with the previous day’s N1.056 trillion and the NASD Unlisted Security Index (NSI) went down by 1.86 points to wrap the session at 3,012.50 points compared with 3,014.36 points recorded in the previous session.
The alternative stock market was busy yesterday as the volume of securities traded by investors soared by 146.9 per cent to 5.9 million units from 2.4 million units, as the value of shares transacted by the market participants jumped by 360.9 per cent to N22.5 million from N4.9 million, and the number of deals increased by 50 per cent to 21 deals from 14 deals.
When the bourse closed for the day, Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units valued at N3.9 billion, followed by Okitipupa Plc with 752.2 million units worth N7.8 billion, and Afriland Properties Plc 297.5 million units sold for N5.3 million.
Also, Aradel Holdings Plc, which is now listed on the Nigerian Exchange (NGX) Limited after its exit from NASD, remained the most active stock by value (year-to-date) with 108.7 million units sold for N89.2 billion, trailed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units worth N5.3 billion.
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