U.S Financial Group Wells Fargo Slams NCC for MTN Fine

MTN Nigeria landed the wrath of Nigerian Telecoms regulator NCC who fined the phone company $5.2bn and according to Derrick Irwin, manager of a $3.5bn emerging markets fund at Wells Fargo, this has “seriously negative investment implications” for the country.

Wells Fargo, the United States multinational banking and financial services holding company which is headquartered in San Francisco, California, with “hubquarters” throughout the country said the fine will discourage investors.

The fine “is outrageous by any rational stretch of punishing the company,” said Boston-based Irwin, manager of the Wells Fargo Advantage Emerging Markets Equity Fund, which held MTN stock as of August 31, “If you can shake down MTN, you can shake down anybody.”

The Nigerian government is looking for sources of revenue to plug holes in the budget and this may be a reason for the severity of the fine, Irwin said.

In September, Charles H. Rivkin, the U.S Assistant Secretary, Bureau of Economic and Business Affairs warned the Buhari administration against Shutting out foreign competitors in the country during the Nigerian-American Chamber of Commerce conference for Small, medium, Enterprise Finance Conference in Abuja with the Vice President Osinbajo in attendance.

“Shutting doors to foreign competition, whether through import bans, prohibitive tariffs, or foreign exchange controls, will not make protected domestic firms more competitive.”

“Consumer demand around the world is based on price, quality, and choice. Consumers, whether businesses or individuals, are right, not wrong, in wanting to get the best products in exchange for their hard-earned income.”

He said that the new Nigerian government should learn from African Countries such as Gabon, where at the recently concluded AGOA Forum it showed that businesses are more likely to invest in countries with open and regionally integrated trade.

“While tariffs on their face may be intended as a means to increase government revenues, when prohibitive or exorbitant, they produce little or no revenue except to those engaged in smuggling and corruption, and hurt the development of formal markets.. Among other things, this will help develop more formal markets, which in turn will help set the wheels in motion of a virtual cycle that leads to more jobs and more investment”.