South African mobile telephone operator MTN has vowed to invest $1 billion (R17bn) in Ghana over the next five years.
The MTN Group said it will inject this money following the Ghanaian government’s move to exempt its unit from tax claims worth about $773 million.
MTN announced this development on Wednesday as it comes on the back of the Ghana Revenue Authority exempting the company’s bill for back taxes earlier this month after the incident sparked a diplomatic reaction by the South African foreign minister.
As previously reported by BusinessTech Africa, the tax claim was initially issued after the revenue authority audited the telecoms operator for the years 2014 to 2018 and inferred that it under-declared its revenue by about 30% during the period.
MTN CEO Ralph Mupita said the company was determined to invest in the West African nation 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,” he said in a statement.
“MTN intended to invest the amount in 5G technology, which it believed would spur faster growth across sectors.
“One of the largest economies in Africa, Ghana, is reckoning with its worst economic crisis in a generation as capital outflows, a crushing debt-service burden, and rapid currency depreciation wreak havoc on government and household finances.”
Per the latest data, the country’s consumer inflation slowed slightly to 53.6% year-on-year in January from a more than two-decade high of 54.1% in the previous month.
BusinessTech Africa also reported that International Relations and Cooperation Minister Naledi Pandor had urged MTN and authorities in Ghana to deal with a R13 billion tax dispute urgently.
Ghana is the mobile operator, MTN’s third-biggest market, and the South African company was hit with a surprise R13 billion back-tax bill from the Ghana Revenue Authority early this month.
Media reports suggested that the ban was due to a new methodology to track call data records.
Pandor said the government was committed to promoting South African investment in Ghana and elsewhere in Africa.
