MTN Shares Surge After Nigeria Raises Telecoms Tariffs by 50%

MTN Nigeria Communications Plc’s shares jumped after the Nigerian government raised telecommunications tariffs by 50% to offset the impact of the collapse in the naira and surging inflation.

The stock surged the maximum 10% to 256.30 naira at close in Lagos, the commercial capital. Rival Airtel Africa Plc was unchanged at 2,156.90 naira.

The Nigerian Communications Commission announced the tariff hike late Monday to “support the ability of operators to continue investing in infrastructure and innovation,” according to a statement.

The tariff increase — the first in more than a decade — was half of what companies such as MTN had asked for to weather harsh economic conditions, including a 41% depreciation in the naira against the dollar last year and inflation running near a three-decade high.

Even so, MTN Nigeria Chief Executive Officer Karl Toriola said the adjustment was “an important step toward addressing the impact of the prevailing economic challenges on the company and industry. “It will enable us to maintain the critical investments required to deliver reliable, high-quality services,” he said in a filing to the Nigerian Exchange Group.

The increase will also help telecommunications companies in Africa’s most-populous nation return to profitability, Bismarck Rewane, CEO at consultancy Financial Derivatives Co., said. “Giving them the 50% tariff increase is a boost. We are going to see an increase in base stations, an increase in 5G deployment, an increase in capex,” he said by phone.

While the tariff hike is short of what the companies had asked for, Avior Capital Markets Ltd. analyst Mike Steere said it “far exceeds” the 10% to 20% price rise it had factored into its full-year earnings model for MTN in 2025. The increase should eventually support medium-term revenue growth of over 30%, he said.

Higher prices are also likely to have an inflationary impact in the short—term, Rewane said.

“It increases costs, which will pass through to the consumer,” he said. “But you will see that the telcos will have to invest more in capex and the quality of service will become a key issue. If quality of service improves, you will see productivity will improve. That may offset part of the inflationary impact.”

By Nduka Orjinmo and Emele Onu, Bloomberg

Related story: Nigeria approves tariff hikes to protect Telecoms operator margins

Nigeria approves tariff hikes to protect Telecoms operator margins

The Nigerian Communications Commission (NCC) approved tariff increases for operators in a bid to balance rising operational costs with service quality in Nigeria’s challenging economic climate.

Operators sought to double prices, the NCC capped the increase at 50%, emphasising the need to protect consumers while enabling sustainable industry growth.

In a statement, the NCC noted that tariffs had “remained static” since 2013 despite mounting operational costs. It said the adjustment aims to address a “significant gap between operational costs and current tariffs” while ensuring service delivery to consumers remains unaffected.

The regulator added that higher tariffs would allow operators to invest in infrastructure and fund innovation projects, ultimately benefiting consumers through improved services.

Operators have been mandated to clearly communicate price changes to customers and demonstrate “measurable improvements in service delivery” alongside the increases.

Consumer advocacy group, the National Association of Telecommunications Subscribers (NATCOMS), has vowed to contest the decision. NATCOMS president Deolu Ogunbanjo criticised the NCC for failing to involve subscribers in discussions, despite the regulator’s assertion that it held “extensive consultations with key stakeholders across the public and private sectors.” NATCOMS had previously advocated for a more modest increase of 5–10%.

By Manny Pham, Developing Telecoms

Nigeria nears crude oil production quota as per OPEC guidelines

Nigeria came close to meeting its OPEC-regulated crude oil production target in December, averaging 1.48 million barrels per day, just short of the 1.5 million barrels per day quota. The figure however still maintained Nigeria as Africa’s largest producer.

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Death toll in Nigeria gas tanker explosion rises to 98

The death toll from a gasoline tanker explosion in north-central Nigeria has risen to 98, the country’s emergency response agency said Monday.

The blast happened in the early hours of Saturday near the Suleja area of Niger state after individuals attempted to transfer gasoline from a crashed oil tanker into another truck using a generator.

The fuel transfer sparked the explosion, resulting in the deaths of those transferring the gasoline and bystanders.

Hussaini Isah, the National Emergency Management Agency's head of operation for Niger State, told the Associated Press on Monday that there is a possibility that the death toll could still rise.

“The death toll keeps changing,” he said.

On Sunday, Isah said the blast claimed many victims because a crowd had gathered at the scene, including people taking pictures, bystanders and others attempting to scoop gasoline.

Gasoline prices in Africa’s most populous country have soared after the administration of President Bola Tinubu removed subsidies on the product more than a year ago in an attempt to channel the resources to more developmental purposes. However, the policy has caused untoward hardship.

Scooping gasoline from a fallen tanker is common in Nigeria as some people see it as an opportunity to get free product that they could either use or resell for a profit.

By Dyepkazah Shibayan, AP

Related story: Nigerian gasoline tanker explosion death toll rises to 86, with 55 others injured

Video - Digital soil mapping technique helps Nigeria’s farmers

Many small scale farmers in West Africa and the Sahel region have been struggling with low yields for years due to the poor soil quality on their farms or growing crops in unsuitable areas. However in Nigeria, farmers are now benefiting from digital soil mapping that's helping them maximize harvests and identify best areas to grow different crops.

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