VENTURES AFRICA – Africa’s largest telecoms provider MTN Group have warned of tougher times for growth in Nigeria, its biggest market, caused by the collapse of the price of crude oil, on which the country’s foreign exchange depends.
“In Nigeria some level of uncertainty remains with regards to the implications of the oil price and currency fluctuations, which may lead to slower economic growth,” MTN said in a statement. The west African country contributed nearly 37 percent of MTN’s total revenue, while its South African home market made up about 27 percent.
[pro_ad_display_adzone id=”10″]
Nigeria, Africa’s biggest economy, have suffered a massive currency crises that has seen its Naira capitulate by over 30 percent. The country’s foreign exchange reserves have also depreciated by more than $10 billion because of efforts to prop up the Naira and the steep fall in oil revenue. According to Reuters, a tough regulatory environment has also meant MTN has been forced to offer similar tariffs to its own subscribers and those of its smaller rivals. It has also been hit with bans against selling SIM cards and promotional pricing. “It would appear that the regulatory pressure may ease, but the unknown at this stage is the economic impact of the falling oil price,” Reuben Beelders, portfolio manager at Gryphon Asset Management, told the news agency.MTN has operations in 17 African countries, however it is expected to focus a lot more on its home market in the bid to challenge rival Vodacom’s expansion. The company said it would invest nearly 80 percent more capital in South Africa in 2015, while increasing its capital spend in Nigeria by 5 percent. The country is however, expected to contribute more than a quarter of the 17.5 million new subscribers MTN hopes to sign on this year.MTN surprised investors by declaring a 1,245 cents per share total dividend, up from 1,035 cents last year. It said it planned increases of between 5-15 percent a year, which sent the shares up as much as 2.8 percent, according to Reuters.