South Africa-based telecoms giant MTN Group has announced plans to invest $1bn in Ghana over the next five years. The move follows an announcement earlier this month that the Ghana Revenue Authority (GRA) would exempt MTN’s Ghanaian unit from tax claims of around $773m.
The claims were made after the GRA audited the company for the years 2014 to 2018 and concluded that it had under-declared its revenue by approximately 30%.
The announcement from MTN Group CEO Ralph Mupita comes as Ghana’s economy is struggling with its worst economic crisis in a generation, caused by capital outflows, a crushing debt-service burden, and rapid currency depreciation.
Despite these challenging macroeconomic conditions, Mupita said that the company was committed to investing in Ghana in the medium and long term. The investment will focus on 5G technology, which MTN believes will spur faster growth across sectors.
Ghana, one of Africa’s largest economies, has been hit hard by the pandemic, with a sharp contraction in its growth rate. However, the country has been praised for its efforts to contain the spread of the virus and to protect its people from the economic impact of the pandemic.
As well as investing in 5G technology, MTN’s investment is expected to create jobs and help boost economic growth in Ghana, which is striving to become a regional hub for business and innovation.
The tax exemption granted to MTN has been welcomed by the South African government, which had threatened to take retaliatory measures against Ghana if the tax claims were not dropped. The decision to exempt the company from the tax claims is seen as a positive move for foreign investors in Ghana and a sign of the government’s willingness to work with companies to drive economic growth.
While the news of MTN’s investment is positive for Ghana, the country still faces significant challenges in its efforts to revive its economy. Consumer inflation in Ghana is running at a high rate, with January’s figures showing a year-on-year rate of 53.6%, a slight improvement on the previous month’s more than two-decade high of 54.1%.
The government is grappling with high levels of debt and a fiscal deficit, which is expected to reach 9.5% of GDP this year.
Despite these challenges, Ghana has been recognised as a leader in Africa’s efforts to drive economic growth and reduce poverty. The country has made significant progress in recent years, with improvements in education, healthcare, and infrastructure, and a growing reputation as a hub for innovation and entrepreneurship.
MTN’s $1bn investment in Ghana is a welcome boost for the country as it seeks to overcome the economic challenges posed by the pandemic and to create opportunities for growth and development.
The investment in 5G technology is particularly significant, as it has the potential to drive innovation and productivity across a range of sectors, and to help Ghana to position itself as a leader in the African telecoms market.
While there are still significant challenges facing Ghana, the news of this investment is a positive sign of the country’s potential for growth and prosperity in the years to come.