MTN Nigeria Communications Limited (MTNN)

MIGA has issued a $50 million guarantee to Mobile Telephone Networks International Limited (MTNI), a Mauritius-registered company, wholly owned by Mobile Telephone Network Holding Limited (MTN) of South Africa, covering its $285 million non-shareholder loan to MTN Nigeria Communications Limited (MTNN) in Nigeria, against the risk of war and civil disturbance.

The project involves the installation, operation and maintenance of a country-wide mobile telephone network, based on the GSM technology, under a 15-year license. This project supports the governments ongoing efforts to address the acute shortage of reliable telephone services in the country, and, as such, is expected to have a positive impact on the economy in general. By the end of 2004, the network is expected to cover about 60 percent of the geographic area of Nigeria, and have sufficient capacity for about 2,000,000 subscribers. MTNN is also helping to establish telephony infrastructure in the country, which is essential to attract foreign direct investment. The project is expected to generate numerous employment opportunities, as about 1,000 Nigerian staff are expected to be hired and trained for mobile operations, and it is anticipated that a further 800 local staff would be outsourced for the provision of security, catering and maintenance. In line with international practice, the project will provide the government with an up-front license fee (of $285 million), as well as an additional annual fee equal to 2.5 percent of net revenue. The project is expected to facilitate additional tax revenues by accelerating economic development and improving the efficiency of local business enterprises.