Adebayo Okeowo: Nigeria & Big Business – Putting MTN’s Penalty in Perspective

 

When in July 2015, it was reported that Shell BP had been fined a staggering amount of $18.7 Billion for the 2010 fatal oil spill in the Gulf of Mexico, environmentalists objected that the court was too lenient in its fine.

But when telecoms giant – MTN was recently fined by the Nigerian Communications Commission (NCC) to the tune of $5.2 Billion for failing to deactivate a whooping 5.2 million unregistered SIM users, economic analysts described it as an excessive penalty. Some even suggested that it was Nigeria’s way of generating

money following the global oil decline.

Why can’t this be seen for exactly what it is: a government taking the responsible step to regulate activities of corporations within its space? Nigeria has been severely accused for having weak regulations which allow corporations take advantage of the loop-holes to act irresponsibly. But now that the ropes are being tightened, some people are crying foul. Why should it be ok for the NCC to lax in its penalty just to play nice?

The NCC has stated that MTN was fined so high because unregistered SIM cards pose a threat to national security particularly in light of the Boko Haram insurgency. Why then is the NCC being chided for taking the initiative to curb unacceptable corporate behaviour whereas MTN is getting sympathy for failing to abide by the rule books? Ask the average Nigerian, and they will likely tell you they wish MTN could also be fined for poor service delivery.

Some have actually claimed the fine to be unfair because it makes up 1/4 of MTN’s total asset and may as a result push them out of business. But my question is: should the fairness of the fine meted out be based on MTN’s profit margins and its ability to pay or the magnitude of the problem being addressed – which in this case is: ending terrorism and other criminal acts. I believe the latter should be the litmus test for fairness. It is the reason the Gulf of Mexico settlement was deemed insufficient because the oil spill claimed 11 lives and 4.2 million barrels of oil were spilled over a period of 87 days!

If you are familiar with corporate behaviour in Africa as compared to the rest of the world, you will know that corporations have constantly exploited weak regulatory bodies to get away with a lot that they wouldn’t dare attempt in the Global West. It is due to this disparity that a global treaty is now being crafted to regulate businesses and multi-national corporations, so that a minimum standard is maintained whether you are operating in the New Zealand or in Angola.

MTN is already engaging with the NCC to request a lesser fine or be given the allowance to stagger the payment. This, I believe is the way to go.

As for the speculations that NCC’s fine will discourage foreign investment; investors don’t avoid territories because they may be slammed with a fine. They avoid them because they are unstable and unprofitable. So the quest should be to make Nigeria more stable and safe and the investments will come.

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