It's taken Nigeria's new president five months to bring in a cabinet - and that's been too slow, say his critics. But could a massive fine imposed on South African telco MTN suggest he's trying to show more speed in dealing with Nigeria's economic crisis? David Pollard reports.
There's often rivalry between Africa's top two economies. But a $5.2 billion fine imposed by Nigeria on South African telecoms firm MTN Group is testing relations. Africa's biggest mobile phone company was given the penalty last month after it failed to cut off users with unregistered SIM cards. Nigeria fears unregistered cards are used for criminal activity in a country fighting an Islamic insurgency. Economic analyst Ememanka Onyebuchi. (SOUNDBITE) (English) ECONOMIC ANALYST EMEMANKA ONYEBUCHI, SAYING: "We must establish that an infraction of our laws have taken place and action and reaction are equal and opposite. MTN must be made to pay ... This is a test case for the resolve of our government, ." New president Muhammadu Buhari was elected in March on a promise to clean out corruption - and fix Nigeria's worst economic crisis in decades. But he's been sharply criticised for waiting until now to bring in a new cabinet. More and firmer action needed, says Onyebuchi, to attract investment. (SOUNDBITE) (English) ECONOMIC ANALYST EMEMANKA ONYEBUCHI, SAYING: "Corporations want to play in countries where laws are taken seriously ... It will send a clear message to the international business world that Nigeria is now ready to do serious business." The Group's CEO has resigned over the penalty fine, leaving the non-executive Chairman with the challenge of trying to reduce it. One suggestion some see as more likely is that it's allowed to stagger payments. In the meantime, MTN shares are down around a fifth since the fine was announced - Moody's and Fitch lowering their ratings on the telco to "negative" on the risk of a significant cash outflow.