South Africa’s Economy 'Catches Cold' Because Of MTN Nigeria Fine
South Africa’s central bank is crying out over the implication of the billions of dollars in fines owed by MTN Nigeria to the government.
The SA apex bank lamented on Wednesday that the fine, amounting to up to $10 billion, could increase the risk to South Africa’s financial system.
Recall that the Central Bank of Nigeria in September fined MTN Nigeria $8.1 billion for illegally repatriating profits from Nigeria.
Shortly after the MTN sanction, the Nigerian government through the office of the Attorney General of the Federation, also demanded $2 billion in related taxes from MTN.
Reuters reports that in its semi-annual review of financial stability on Wednesday, the South African Reserve Bank said that the repatriation claim and the $2 billion underpayment in tax amounted to approximately 100% of MTN’s market capitalisation.
“Any potential impact on the South African financial system arising from this event will depend on the eventual resolution of the matters raised and MTN Group’s ability to continue meeting its debt obligations,” the bank said.
“A potential worst-case scenario would be for the MTN Group to disinvest from Nigeria,” the central bank added.
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