Tax modifications drive MTN Group to delay Nigeria share sell-down 

MTN Group’s long-discussed plan to cut back its shareholding in MTN Nigeria is not on a direct timeline. Whereas the Nigerian unit has returned to profitability and resumed dividend funds,  shifting tax dynamics have sophisticated the trail to a public sell-down.

Talking throughout the firm’s Q3 2025 earnings name in November, MTN Group president and CEO Ralph Mupita recommended that current modifications to Nigeria’s capital features tax (CGT) regime have made a near-term discount within the Group’s stake commercially unattractive. In consequence, plans to dilute possession in favour of native traders are successfully on pause.

“That has been sophisticated by the modifications within the tax code,” Mupita stated, based on transcripts launched in December. “There have been some modifications to CGT; proper now, it isn’t one thing that we’re pushing at. We type of pulled again and are holding again. We didn’t put a tough timeline on ourselves, however with the developments on the tax codes, it’s made it a bit unattractive for us to do it proper now, so we’re type of paused on that initiative, primarily pushed by the modifications within the tax code on capital features.”

The pause marks a shift from the telco large’s long-stated plan to deepen native possession of its Nigerian enterprise as soon as it returned to profitability. Whereas the corporate has cleared key monetary hurdles, the upper CGT fee has altered the economics of huge share gross sales, reinforcing investor considerations that the brand new tax regime might gradual main capital market transactions.

MTN Group did reply to a request for feedback on the time of publication.

As a part of current tax reforms, Nigeria raised capital features tax for firms from 10% to 30%, rising the price of giant fairness transactions. CGT applies to earnings realised from the sale of shares and different fairness securities and was raised to curb tax arbitrage between buying and selling earnings and chargeable features.

For CGT to use, share transactions should exceed ₦150million ($105,763.40), with features above ₦10million ($7,050.89).

The tax shift comes at a time when MTN Nigeria has returned to profitability and resumed dividend funds, clearing key situations that beforehand delayed the sell-down. The Nigerian unit posted a ₦750.19 billion ($528.95 million) revenue for the 9 months ending September 2025, from a ₦514.9 billion ($363.05 million) loss in the identical interval final 12 months, and declared an interim dividend of ₦5 per share.

MTN Nigeria’s shares had been buying and selling at ₦573.90 per share as of Monday, January 12, 2026. MTN Group is predicted to obtain a gross dividend of about 975 million rand ($59.19 million) from its Nigerian subsidiary.

MTN Group has lengthy stated it intends to deepen native possession of its Nigerian enterprise. In April 2025, Mupita reiterated plans to chop the Group’s stake as soon as MTN Nigeria resolved its destructive fairness place and resumed dividend funds. That dedication kinds a part of MTN’s localisation agreements with the Nigerian authorities following its 2016 settlement over unregistered SIM playing cards.

“The one localisation we’ve got as MTN Group is we’ve got a possible sell-down in Nigeria sooner or later in time, roughly 11%,” Mupitan stated on the time. “That is one thing we’ve got stated way back, that over time we might need extra Nigerians proudly owning the corporate, and we’re ready to promote all the way down to 65%. We’re at round 76%.”

The proposed transaction would mark MTN’s second main retail public providing in Nigeria, following its 2021 sale of MTN Nigeria shares to native traders. That provide was oversubscribed, with 661.25 million shares allotted, together with a 15% greenshoe choice, decreasing MTN Group’s stake to 75.6% from 78.8%. Greater than 126,000 traders participated, together with Nigerian pension funds representing roughly 6.5 million contributors.

Market analysts emphasise that the upper fee has made transactions of this scale dearer. Nigeria’s CGT fee exceeds these of a number of peer markets, together with the US (21%), South Africa (21.6%), and Kenya (15%).

In November 2025, Nigerian equities misplaced ₦6.54 trillion ($4.61 billion) in worth, the steepest month-to-month decline since 2020, as traders reacted to the deliberate implementation of the brand new CGT regime in January 2026.

Underneath the brand new legislation, features from share gross sales are taxed at 30%, no matter holding interval, in contrast with the earlier framework that allowed short-term trades to be taxed at 10% as buying and selling earnings. As an example, a inventory purchased at ₦600 and bought at ₦1,000 inside a month would have attracted a ten% buying and selling acquire. Now, it’s a mounted 30% on the acquire, altering buying and selling economics fully.

In response to Mustapha Umaru, an business and fairness analysis analyst at CSL Stockbrokers Restricted, a Lagos-based funding firm, the upper CGT fee is especially important for transactions akin to MTN’s proposed sell-down.

“In MTN’s case, an 11% sell-down in MTN Nigeria is a really giant transaction,” he stated. “When you apply CGT at that fee, the premium turns into important.”

Umaru added that international portfolio traders had been the primary to tug again in direction of the tip of 2025. “There may be nonetheless a wait-and-see angle available in the market,” he stated. “Individuals need to see how the legislation performs out in follow earlier than committing contemporary capital.”

He expects this angle to wane because the legislation’s implementation will get clearer.

Whereas the brand new CGT regime has unsettled markets, the federal government maintains that the reforms will strengthen Nigeria’s capital market over the long run, with plans to cut back the speed to 25% quickly.

Taiwo Oyedele, chairman of the Presidential Fiscal Coverage and Tax Reforms Committee, stated in November that the brand new framework improves readability and equity for traders.

“The reform makes funding within the Nigerian capital market extra enticing, reduces funding danger, and ensures truthful therapy of reputable prices incurred by traders,” he stated. “In essence, the reform promotes fairness and confidence available in the market – not the reverse.”

For firms like MTN, nevertheless, timing stays the fast concern—whether or not to attend for readability and softer charges or take in larger prices in a market nonetheless adjusting to the tax reset.