According to the online IT news source, “after the Nigerian government removed fuel subsidies, mobile-phone operator MTN Group posted their biggest two-day decline since January 2009. As fuel subsidies are cut, consumers face the tough choice of either buying airtime or fuel.”
The publication noted that while the company has a market value of R248.9-billion, stocks in MTN dropped by 5.4%, ending the trading day in question on R132.06 per share.
“People will have to choose between buying phone airtime and paying for transportation as fuel prices climb”, it quoted Khulekani Dlamini, Head of Research at Cape Town-based Afena Capital as saying.
“Nigeria contributed R16.5 billion ($2 billion) to MTN’s total revenue of R56.5 billion in the first half through June, about a third of the group’s total revenue, when the nation generated earnings before tax, interest, depreciation and amortisation (Ebitda) of R10.48 billion, 42 percent of MTN’s total Ebitda,” it cited Leadership as writing.
The federal government of Nigeria January 1, 2012 removed subsidies on fuel, and as result fuel price in Nigeria has almost doubled and transport fares have gone up.
Since Tuesday January 3, 2012 Nigerians protesting the removal of the subsidies occupied streets in various parts of the country.
Thousands, according to reports reaching ghanabusinessnews.com went out onto the streets.
The labour union subsequently announced a nationwide strike action which started Monday January 9, 2012. The action according to reports has crippled the whole country and one person is reported dead.
By Emmanuel K. Dogbevi