MTN Group to Cut Stake in Nigerian Subsidiary Amid Financial Struggles and Local Ownership Push

Introduction

In a strategic shift aimed at reinforcing local participation and navigating ongoing financial headwinds, MTN Group has revealed plans to reduce its stake in MTN Nigeria. The announcement, made by MTN Group President Ralph Mupita, underscores the telecom giant’s continued efforts to align with its long-standing commitment to Nigerian market localization. As the company grapples with major economic pressures and seeks a return to profitability, this move represents both a recalibration of ownership structure and a calculated bet on the country’s long-term economic recovery.

Key Developments from MTN’s Strategy and Financial Outlook

MTN Group plans to reduce its ownership in MTN Nigeria from 76% to 65%.
The stake reduction will be carried out via a public sale, aiming to enhance local ownership once profitability is restored.
This will mark MTN’s second major public offering in Nigeria after it sold 575 million shares in 2021.
The 2021 offering was oversubscribed, bringing over 126,000 investors on board and reducing MTN’s stake from 78.8% to 75.6%.
The Group reiterated its localization commitment during an editors’ roundtable discussion led by President Ralph Mupita.
Mupita confirmed the next sale will only occur after MTN Nigeria becomes profitable again and resumes dividend payouts.
Despite revenue of ₦3.36 trillion in 2024, MTN Nigeria posted a ₦400.44 billion loss after tax, up from ₦137.02 billion in 2023.
Causes include Nigeria’s soaring inflation, currency devaluation, and rising operating costs.
The Nigerian unit, once MTN’s cash cow, is now overtaken by MTN South Africa in profit contribution.
MTN expects a V-shaped recovery by 2025, citing reforms like fuel subsidy removal, naira stabilization, and better dollar access.

– Current share price of MTN Nigeria: ₦235.

MTN is also eyeing a bold push into video streaming, partnering with UK’s Synamedia to launch a new Africa-focused platform.
This service will challenge Netflix, Showmax, and others, combining linear TV with on-demand content for broadband and mobile users.

What Undercode Say:

MTN

Let’s unpack this.

The proposed sale—dropping MTN’s stake from 76% to 65%—demonstrates a rare level of patience from a multinational. Instead of rushing the market, MTN is waiting until its Nigerian arm regains profitability. This speaks volumes about the Group’s confidence in a turnaround, despite the current bleak numbers.

To put it in context, MTN Nigeria’s revenue surged to ₦3.36 trillion, yet it ended up losing over ₦400 billion. That’s not a small miss. The 192% spike in losses, driven by macroeconomic distortions like inflation and currency instability, underscores the real cost of doing business in Nigeria right now. Even with high income, profitability remains elusive due to operational volatility.

What’s interesting is MTN’s long-view mindset. Mupita’s reference to a “V-shaped recovery” is ambitious but not unfounded. Reforms such as the removal of fuel subsidies and better access to foreign exchange are structurally sound. If executed effectively, these can indeed revive consumer spending and stabilize business operations.

However,

From an investor standpoint, this sale—once MTN Nigeria returns to black—could be a rare opportunity. A company with a huge user base, solid infrastructure, and strong brand loyalty is temporarily battered by macroeconomic winds. Those winds will eventually shift.

Then there’s the tech play: MTN’s upcoming video streaming service in partnership with Synamedia. With Nigeria and broader Africa moving rapidly into mobile-first media consumption, this could be MTN’s next cash cow—especially if it leverages its data ecosystem for bundled services.

Still, MTN’s immediate challenge remains rebuilding profitability. Until then, any share sale would not only undervalue its Nigerian arm but might send the wrong message to the market.

In summary, MTN is playing a delicate balancing act—juggling market pressures, investor expectations, and regulatory dynamics. If its bet on Nigeria’s economic reforms pays off, the Group might just emerge stronger, more localized, and digitally diversified.

Fact Checker Results:

MTN Group has publicly stated its intention to reduce its Nigerian stake from 76% to 65%.
Financial losses and macroeconomic headwinds in Nigeria are confirmed by 2024 financial statements.
The 2021 public offering and share sale to over 126,000 investors is well-documented and aligns with the company’s localization agenda.