By Christian George
The Chief Executive Officer of MTN, Ralph Mupita, said that the economic reforms in Nigeria are a shock to the company.
The telecom boss, in an interview on Bloomberg Television aired on Thursday, stressed that it might take the company more time to recover from the pain.
He expressed optimism that the company will soon recover from the pain and bounce back fully into business and make a profit.
He said, “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.
“And beyond that — we see our business being able to pick up growth and repair the profit and earnings profile of the group,” he added.
Recall that the naira has plunged since the government eased foreign exchange controls earlier this year, weighing on company earnings, while the removal of fuel subsidies has 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 is MTN’s biggest market by subscribers and the Lagos-listed unit contributes more than a third of the group’s total revenue. “Nigeria drives growth in digital adoption and financial inclusion. MTN has Nigeria as a big growth vector for the company,” he said.
The naira has been weakened by a local shortage of dollars with companies complaining they are unable to repatriate earnings, though the Nigerian government is trying to clear the backlog of dollar demand.
Finance Minister Wale Edun has said he expects to attract $10 billion of inflows to help clear the overhang, ease liquidity and stabilise the currency.