Nigeria’s recent overhaul of its tax framework is beginning to ripple through corporate boardrooms, and one of the clearest examples is the pause on a long-anticipated share sell-down by MTN in its Nigerian business.
For years, the telecoms group has said it intends to reduce its stake in MTN Nigeria to deepen local ownership once the unit returned to financial stability. That moment has now arrived: MTN Nigeria has returned to profitability and resumed dividend payments. Yet, rather than moving ahead, the group is holding back, citing changes to Nigeria’s capital gains tax (CGT) regime.
Speaking during the company’s Q3 2025 earnings call, MTN Group president and CEO Ralph Mupita said recent adjustments to the tax code had made a near-term sell-down commercially unattractive. Nigeria raised capital gains tax for companies from 10% to 30% as part of broader fiscal reforms, sharply increasing the cost of large equity transactions.
“That has been complicated by the changes in the tax code,” Mupita said, adding that the company had “pulled back” and paused the initiative for now. While there was never a fixed timeline, he said the higher CGT rate had altered the economics enough to warrant caution.
The decision marks a shift from MTN’s long-standing plan to gradually reduce its ownership in favour of Nigerian investors. The proposed sell-down of about 11% would have brought the group’s stake closer to 65% and represented its second major retail public offer in the country, following the oversubscribed 2021 share sale that attracted more than 126,000 investors.
The timing is notable. MTN Nigeria recently cleared the financial hurdles that had delayed the sell-down for years. The company posted a ₦750.19 billion profit for the nine months ended September 2025, reversing a loss recorded in the same period the previous year, and declared an interim dividend of ₦5 per share. MTN Group is expected to receive roughly 975 million rand in dividends from the Nigerian unit.
But analysts say the new CGT regime has reshaped incentives across the market. By taxing gains from share sales at a flat 30%, regardless of holding period, the reforms have made large transactions significantly more expensive. Nigeria’s CGT rate now exceeds those of several peer markets, including the United States, South Africa, and Kenya.
The policy shift has already unsettled investor sentiment. Nigerian equities suffered a sharp sell-off in late 2025 as investors reacted to the planned implementation of the new tax rules in January 2026. Market participants say a wait-and-see attitude has taken hold as companies and investors assess how the reforms will play out in practice.
For MTN, the issue is less about intent than timing. The company has reiterated its commitment to local ownership, but with higher taxes now factored in, the sell-down is unlikely to proceed until the market adjusts or further clarity emerges around the tax framework. Until then, a deal years in the making remains on hold caught between improved company fundamentals and a tougher fiscal environment.
