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FIRS compounds MTN’s woes with $2 billion tax bill
The Federal Inland Revenue Service(FIRS) has slapped MTN Group with a $2 billion tax bill, compounding the woes of the leading wireless company.
The company made known the tax bill on Tuesday.
The announcement of the tax bill comes days after the Central Bank of Nigeria (CBN) ordered MTN Nigeria hand over $8.1 billion that it said was illegally sent abroad.
MTN, whose Nigerian business brings in a third of its annual core profit, or EBITDA, said its total payment of around $700 million over the 10-year period fully settled the amount owing under the taxes in question.
Shares in MTN fell 17 percent to 72 rand at 1315 GMT, bringing losses since last Thursday, when the central bank issued its demand, to nearly a third.
“These are old issues that have been investigated and closed but now they are being reopened,” Byron Lotter, a portfolio manager at Vestact in Johannesburg, said, adding it was possible MTN would be reviewing its presence in Nigeria.
Vestact owns about 30 million rand worth of MTN stock.
MTN, which has expanded in more than 20 frontier markets including war-ravaged Syria and Afghanistan, called the latest demands by Nigerian authorities “regrettable and disconcerting”.
“We remain resolute that MTN Nigeria has not committed any offences and will vigorously defend its position,” it said.
Nigeria’s head of asset recovery in the attorney general’s (AG) office could not immediately comment on the tax claim but said the AG’s office, headed by Abubakar Malami, was also behind last week’s $8.1 billion demand.
Nigeria’s main allegation against MTN is that it used improperly issued certificates to convert shareholder loans in its Nigerian unit to preference shares in 2007. As a result, $8.1 billion in dividends paid by MTN Nigeria to its parent between 2007 and 2015 were illegal and should be returned. (NAN)
ATIDI CEO, Manuel Moses and Hiroshi Matano, MIGA Executive Vice President (Image: Supplied)
The African Trade & Investment Development Insurance (ATIDI), and the Multilateral Investment Guarantee Agency (MIGA), part of World Bank Group Guarantees, have signed a three-year partnership to accelerate foreign direct investment across Africa. This is the second agreement between the two organizations aimed at maximising development impact.
The organizations will collaborate by leveraging ATIDI’s expertise in insurance and guarantee products across the African continent and MIGA’s range of guarantee solutions and guarantee expertise through the World Bank Group guarantee platform. The partnership will also seek to improve efficiency in joint project due diligence, maximising cost savings and eliminating duplication.
Manuel Moses, CEO, ATIDI: “Enabling more investment to finance transformational projects is vital to Africa’s sustained development. MIGA and ATIDI’s de-risking solutions are essential to achieve this crucial agenda. Beyond signing of this agreement, we look forward to a dynamic collaboration with MIGA, to leverage our institutions’ respective assets for the benefit of our continent.”
The agreement framework emphasizes mutual reliance, accountability, and comparability. Each party will regularly share operating standards and procedures to help identify comparable outcomes to further both organizations’ development mandates.
Hiroshi Matano, MIGA Executive Vice President says; “Our partnership with ATIDI will enable us to support countries in Africa in scaling and replicating development projects, thereby accelerating prosperity. This agreement will play a significant role in helping the continent attract foreign investment for key development projects.”
Both organizations have agreed to set up mechanisms to measure progress and results, including reports on joint projects, new products, capital mobilized, and reduced project processing times. Moreover, both parties will carry out joint marketing efforts, training, and seminars to strengthen cooperation and explore new investment opportunities in Africa.
The strategic agreement framework underscores the commitment of MIGA and ATIDI to create a world free of poverty on a livable planet. The two organizations aim to mitigate investment risks by pooling resources, thereby accelerating sustainable economic growth in Africa.
Hesham Zreik, CEO of FasterCapital (Photo: Supplied)
In a rapidly evolving global economy, Africa stands at the cusp of innovation in entrepreneurship. That said, with a growing population that now comprises youthful individuals who can be more technology-savvy, the nascent startup scene is about to take place across the continent. To understand the landscape of African entrepreneurship, Alaba Ayinuola of Business Africa Online (BAO) spoke with Hesham Zreik, CEO of FasterCapital, an online incubator and accelerator interested in startups from all over the world. Zreik is passionate about the challenges and opportunities on offer within the African startup ecosystem, regarding the role of mentorship, and access to funding. Excerpt.
Alaba: Thank you for joining us, Hesham. Let’s dive into the current state of startups in Africa. What do you see as the most significant opportunities for entrepreneurs on the continent?
Hesham: Thank you for having me! Africa is currently experiencing a surge of creativity primarily fueled by advancements in technology. These developments present opportunities across fields such as financial technology (FinTech), health technology (HealthTech) and online commerce (E-commerce). Young business owners are using technology to address challenges – be it enhancing financial access or improving healthcare services. The need for innovations is constantly increasing, reinforcing an environment for startup ventures.
Alaba: While there are many opportunities, challenges still exist. What do you believe are the primary hurdles facing African startups today?
Hesham: The opportunities are great, but so are the challenges. Aside from access to funding, a fact to which many entrepreneurs will readily attest, access to funding remains a big barrier. Traditional banks often avoid lending to startups with unproven track records. Finally, there is still a need for more mentorship and networking that better equips entrepreneurs with ways to navigate the nuances of building a business. It’s time organizations should intervene and offer any help needed, which is what we are trying to do at FasterCapital.
Alaba: Speaking of support, how does FasterCapital specifically empower African startups?
Hesham: At FasterCapital, we have been working extensively with startups through mentorship, technical support, and funding opportunities. A different model of ours is the ability to work with entrepreneurs virtually, which would also avoid geographical boundaries. Moreover, we have a huge network of mentors who would give guidance at each step of development, from marketing to product development.
Alaba: Collaboration seems vital in this space. Can you elaborate on the importance of partnerships for startups?
Hesham: Partnerships are essential for startup growth. They provide access to new markets, resources, and expertise. For example, when a startup collaborates with established companies, the infrastructures already exist, as does an existing customer base; this substantially reduces entry barriers. We encourage our portfolio companies to pursue partnerships actively because they can foster innovative solutions and sustainable growth.
Alaba: Looking ahead, what trends do you foresee shaping the future of African startups?
Hesham: One trend that excites me is the rise of impact-driven startups. Most entrepreneurs are getting into solving social problems and environmental issues. We have companies and projects sprouting that are not strictly money making but very vital in approaching some of these challenges. And with this very rapid acceleration of the digital transformation, we are going to see more startups leveraging AI and blockchain technologies. It’s going to be great, and I think Africa will lie at the epicenter of making this happen globally.
Alaba: As we wrap up, what advice do you have for aspiring entrepreneurs in Africa?
Hesham: My advice is simple: be persistent and adapt. On this entrepreneurial journey, there is bound to be ups and downs, and it is only through resilience that you can navigate through. Seek mentorship, build a strong network, and do not be afraid to take risks. Leverage resources around you, such as organizations like FasterCapital, to help navigate these challenges ahead. The world is looking toward Africa, with the next wave of innovation coming from here.
Lendsqr, a global provider of loan management software for banks, microfinance institutions (MFIs), and digital lenders, has launched a groundbreaking onlending initiative aimed at bolstering the capacity of Nigerian lenders to extend credit to their customers.
With this new initiative, Lendsqr is setting up a capital pool of up to N1 billion line of credit for lenders targeted at Lenders with State Moneylender or Cooperative licenses, giving them the much-needed access to capital that can drive sustainable growth and expansion.
“For a long time, we believed that providing top-tier lending technology was enough to help lenders scale,” said Adedeji Olowe, CEO of Lendsqr. “But technology alone cannot scale a loan business without adequate capital. That’s why we decided to go a step further and solve this critical need.”
The onlending model is designed to support digital lenders who often face challenges accessing loan capital, allowing them to access credit at a reasonable rate. Through this initiative, Lendsqr aims to bridge the gap between technology and capital, ensuring lenders can meet the demand for loans while remaining competitive.
A new era of B2B2C lending
Lendsqr’s onlending initiative represents a strategic step forward in Nigeria’s lending ecosystem. With the ability to offer overdraft loans, the company enables smaller financial institutions to lend confidently, knowing they have a reliable source of capital backing them up. This move is expected to deepen financial inclusion, create a ripple effect on local economies, and ultimately support the development of a healthier financial services landscape in Nigeria.
Lendsqr now joins established onlending capital in Africa such as Lendable, the Nigerian Bank of Industry, and the African Finance Corporation, in providing capital to lenders to drive financial inclusion and much needed growth within the SME economic subsector.
Expanding access and opportunities
By providing loan capital directly to digital lenders, Lendsqr aims to empower lenders to reach more customers, serve new markets, and achieve more stable growth. The initiative not only addresses immediate funding gaps but also sets a foundation for long-term partnerships across the financial industry.
“We’re excited to be the catalyst for growth in Nigeria’s lending sector. Our onlending initiative isn’t just about providing capital. It’s about enabling a stronger and more inclusive financial ecosystem where every licensed lender, big or small, can thrive,” added Joy B. Bello, Head of Sales at Lendsqr.
Lendsqr’s onlending initiative is currently available exclusively to Nigerian lenders. Interested parties can learn more and apply at Lendsqr Capital Portal.
