MTN to invest $1B in Ghana

Mobile operator MTN has announced that it will invest US$1 billion in Ghana over the next five years. The announcement comes after the country's government exempted the telco's Ghanaian unit from tax claims worth about US$773 million.

According to the African wireless carrier, the tax bill was scrapped after "extensive and productive discussions" between itself and the West African nation's authorities.

The tax claim was initially issued after the Ghana Revenue Authority, in January 2023, audited the company for the years 2014 to 2018.

Ghanaian authorities alleged that the telco had under-declared its revenue in its West African operations by as much as 30%.

The telco strongly disputed the accuracy and basis of the assessment, including the methodology used in conducting the audit.

MTN Chief Executive Officer Ralph Mupita said in a statement that the company was committed to investing in Ghana despite short-term headwinds.

"To be sure, macro-economic conditions are very challenging in the near term. That said we are focused on the medium and long term, and we are seeing growth," Mupita said.

MTN Group CEO Ralph Mupita (Source: MTN Group)

Mupita added that the telco intends to invest the amount in 5G technology, which would spur faster growth across sectors.

The mobile operator was supposed to roll out its 5G network in Ghana in 2022 but postponed the rollout to 2023. However, the African wireless carrier has rolled out 5G in other African countries including Nigeria and Zambia.

Ghana tax woes

MTN has fought other tax issues in Africa before. In 2020, the company won a 16-month-long battle against the Nigerian government which had levied a US$2 billion claim for back taxes against the telco.

Furthermore, the mobile operator is not the only company that had been hit by tax bills: The Ghana Revenue Authority has also slapped Tullow Oil, Goldfields Limited and Kosmos Energy Limited with hefty tax demands.

MTN has faced other problems in Ghana. In 2020, its dominance got it into trouble when Ghana's National Communications Authority (NCA) classified MTN as a "Dominant/Significant Market Power" and implemented a set of policies to reduce its dominance in the telecoms market.

The mobile operator initially tried to fight the matter in court, but later withdrew the court case, choosing to focus instead on finding an amicable resolution with the regulator.

MTN is by far Ghana's biggest mobile operator with over 67% market share at the end of 2022, according to Omdia, a sister company of Connecting Africa.

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