Why Nigerian regulators are stopping banks from taking over Etisalat Nigeria

We hope Central Bank of Nigeria (CBN) and Nigerian Communications Commission (NCC) continue to step in to stop banks from taking over Etisalat because if Etisalat goes under, we are left with fewer choices and that will mean higher broadband costs.

The two regulators  have decided to intervene into the $1.72 billion loan issue between Etisalat Nigeria and a consortium of commercial banks which include Access Bank and Zenith Bank.

According to a statement signed by Mr. Tony Ojobo, Director of Public Affairs, the meeting, which was held at the Central Bank Headquarters in Abuja was convened by the financial regulator at the instance of NCC, the telecom regulator, to further deliberate on how best to stave off the attempt by the banks to take over Etisalat.

The statement disclosed that the Central Bank of Nigeria agreed to invite Etisalat management and the banks to a meeting today, Friday, towards finding an amicable resolution.

It added that the NCC as a regulator of the telecom industry decided to move quickly to intervene as a result of the negative impact such a bank take over will have on the industry. “NCC is worried about the fate of the over 20 million Etisalat subscribers and the wrong signals such a takeover may send to potential investors in the telecom industry,” the statement said.

The Loan

A consortium of some foreign and Nigerian banks, including Guaranty Trust Bank, Access Bank and Zenith Bank have been having a running battle with Etisalat over a $1.72 billion (about N541.8 billion) loan facility obtained in 2015.

The loan, which involved a foreign-backed guaranty bond, was for Etisalat to finance a major network rehabilitation and expansion of its operational base in Nigeria.

But no matter what, Nigeria must not bail our Etisalat Nigeria – it has tons of money through its parent company and it is not a local company.