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MTN Group says it is unable to source foreign exchange to service its debt in Nigeria as a result of monetary policy and regulatory restrictions in the foreign exchange market put in place by the Central Bank of Nigeria.  

The CBN has recently put in place some measures to restrict access to foreign currencies due to tremendous pressure on the naira at the foreign exchange market.

According to Bloomberg on Monday, MTN Group abandoned its plans to repay early about $500 million of its debt held in Nigeria. The telecom company said it could not get hold of dollars in Nigeria, which is MTN's biggest market.

Nik Kershaw, MTN’s Head of Investor Relations, reportedly said: “We had looked to do the early resettlement but currently, we are not able to. In Nigeria, there is limited availability of the hard currency.”

In April 2013, it was announced that MTN Nigeria, signed a N470 billion (about $3 billion) loan deal with a consortium of 17 Nigerian banks led by Zenith Bank, to expand, modernise and improve its network infrastructure.  

MTN Group said on August 5 it was in talks with the Central Bank of Nigeria about the early repayment of its debt to reduce exposure to the naira, which has depreciated against the U.S. dollar. Africa’s biggest mobile-phone company, with more than 229 million customers in 22 countries in Africa, Asia and the Middle East, recently announced an 11 per cent decline in the company’s 2015 first half profit due to weakening currencies in Nigeria and South Africa, two of its major markets.

According to Head of Investor Relations at MTN, declines in emerging market currencies will hurt the business. Kershaw said MTN would take appropriate measures to respond to the currency crisis.

He said: “When we do the next budget cycle, we’ll review that. We’re not going to have a short-term knee jerk reaction to the currency moving. You need to see how things play out over the next couple of months.”