A Lesson From Thabo Mbeki

Nigeria must take positive cue from the recent intervention by President Thabo Mbeki of South Africa in the contractual deadlock involving telecoms giant, MTN, and the telecommunication authorities in the Republic of Benin. Indeed that was useful lesson in economic diplomacy.

President Mbeki's mediation was truly timely and tactful. With a customer base of 570,000 in the tiny West African country, MTN, readily one of South Africa's largest exports, had its telephone services suspended in July this year alongside some other operators, for not willing to honour fresh contract and licence terms. However, while the other affected telecoms providers-Atlantique Telecom, Libercom and Bell Benin - later complied, Spacetel, the company MTN inherited from Investcom, remained adamant. It was then that Mbeki brokered a deal with his Beninois counterpart, Thomas Boni Yayi, on behalf of his country's corporate ambassadors.

And because of that presidential interposition, MTN will now pay a $60million contract fee-with relative convenience-and resume its service delivery. After the initial instalment of $30 million to be paid within 30 days of the agreement, $4.2million will be paid annually thereafter to offset the balance. Also, the telecoms front-runner will enjoy a three-year tax holiday, customs duties exemption for five years and a reduced annual licence fee-from six to three per cent. For an establishment of MTN's stature, the package, no doubt, is sumptuous.

That transaction is indeed instructive. Take Globacom, Nigeria's second telecoms carrier and MTN's leading competitor, for instance. Since its debut in the country's robust telecommunication market four years ago, it has made tall efforts to spread its operations to other African countries. Although it commenced operations two years behind the other GSM companies in Nigeria, it has sufficiently closed ranks with MTN and is poised to overtake the South African firm on the continent. Only last August, it beat nine rivals to sign a 10-year pact in Benin. This enviable profile has enlisted Globacom in the elite club of top 10 mobile telephone networks in Africa and the Middle East. These superlative credentials do qualify it as one of Nigeria's worthy institutional envoys at the moment. Yet, it has not been accorded the kind of open endorsement and patronage that its South African counterpart has just received. But as the African business climate becomes more active and competitive, the resources, will and gut of individual investors will not be enough to conquer and dominate markets. Those qualities need to be augmented with pragmatic governmental support.

This has become imperative as Nigerian companies, notably in the financial sector, have also attempted to expand their spheres of influence and operation beyond the nation's shores. Rather than leave them to their own devices, the government should, as the need arises, lend its weight to the noble quest to explore and exploit fresh business frontiers.
Happily, there are credible antecedents in this regard. The United States government, for example, once stepped into the relationship between America's top automobile makers, and their Japanese counterparts over access to markets. That move resolved the stalemate that would have crippled a stupendous bargain.

If it wants to, the government should not find it difficult to provide the necessary support for the country's corporate citizen that aspire to open their posts abroad. After all, we need not remind the government that Nigeria has borne the main brunt of peace keeping operation at a great cost to our citizens. This is the time to reap the goodwill in form of economic gains. In any case, international relations recognise the link that sometimes exists between diplomatic or military gestures and economic gain. Failure to utilise this connection, even if modestly, would continue to deprive the nation of its entitlements as one of Africa's most paternal nations.

And if nothing else motivates the government to protect indigenous organisations outside the country, the prospects of job creation for Nigerians and the inflow of capital into the domestic economy should. The import of Mbeki's action must not be missed.