MTN’s battles with Nigerian authorities over $10 billion in repatriated funds and back taxes could increase risk in South Africa’s financial system, the Reserve Bank said.
Africa’s largest wireless carrier by subscribers is facing mounting pressure to return $8.1 billion to Nigeria after its central bank argued that the Johannesburg-based company had repatriated funds illegally. Separately, the West African nation’s attorney general’s office alleges the company owes $2 billion in back taxes.
The “near-term repatriation of the funds to the Nigerian authorities could affect MTN’s ability to continue meeting its debt obligations, including those in the South African banking sector,” the South African Reserve Bank said in its Financial Stability Review released Wednesday in the capital, Pretoria. “Given the interconnected nature of the financial system, that could increase systemic risk.”