Ayodeji Ayenuwa
Several telecommunication operators, including IHS Nigeria, ATC Nigeria, and Airtel Nigeria, have voiced their rejection of the Nigerian Communications Commission (NCC) Corporate Governance requirement, which mandates written permission for fund repatriation above 30% of the company’s annual profit. The operators argue that this process could lead to delays and hinder their ability to meet investor expectations, potentially impacting their smooth business operations.
Fund repatriation refers to the act of bringing back or transferring money or assets originally invested or held in a foreign country to one’s home country. This typically involves converting foreign currency or assets into the local currency of the home country. It is executed for various reasons, including returning international business profits, repatriating investments, or complying with governmental regulations, ensuring foreign investors receive the dividends of their investments.
Prominent players in the telecom industry, have strongly opposed this aspect of the Corporate Governance Guidelines. Their primary concern revolves around the lengthy process of obtaining written permission, which they believe may not align with the time-sensitive nature of fund repatriation. They fear that disappointing investors due to procedural delays could have adverse effects on their businesses.
Furthermore, as investors are entitled to dividends or interest based on the capital structure of these entities, any failure to meet interest repayments in a timely manner could result in a negative perception of the country. Lenders may become reluctant to extend further credit to local borrowers, potentially impacting sovereign credit ratings.
In light of these concerns, the telecom operators have proposed an alternative solution. They recommend that the NCC raise the threshold for approval to 80% of their annual profits, as opposed to the initial requirement of 30%.
Responding to these concerns, the NCC has acknowledged the operators’ objections and expressed its commitment to reviewing the situation. The telecom industry and its stakeholders eagerly await further developments in this ongoing discussion.
