What is perhaps being lost amidst the frustrations about liquidity and the arguments about the technicalities of MTN’s listing is that they are the fallout that results when markets and politics collide.
When the relationship between public sector and markets is strained, we get anomalies and distortions. This is bad for the government, bad for MTN, bad for interested investors seeking access and most importantly, it is bad for Nigeria.
MTN’s listing should be the stimulus for a new potential wave of listings. All eyes are on it. If it works, we can, and should see Airtel and Glo follow suit. Perhaps others in similar situations. If it fails, we set the market back significantly.
MTN has taken the position that if it cannot see a clear resolution to its dispute with the Attorney General of the Federation, then it is challenging to understand fair value for its shares and so unfair to shareholders, both prospective, and existing, to do a public offer.
Our court systems and processes mean that this dispute could continue for years. What does this mean for markets? What level of uncertainty does it create and what impact does that have on other prospective listings?
Markets work most efficiently and effectively when they have clarity and certainty around the environment within which their participants operate. If that clarity is lost, then it creates volatility and distortion.
That is what we are seeing play out today. A graphic representation of the issues that exist between Nigeria’s public and private sectors.
The communication between government and private sector needs to get better. The status quo is more destructive than it is constructive. MTN and the AGF need to resolve their issues and quickly too.
