MTN Group will spin off its fintech operations in Nigeria, Ghana, and Uganda to facilitate a $200 million investment from Mastercard. The fintech unit is valued at $5.2 billion, with mobile-money transactions increasing by 35%. MTN also plans to explore network-sharing deals and has declared higher dividends for shareholders.
MTN Group Ltd. intends to separate its financial technology operations in Nigeria, Ghana, and Uganda within the first half of the year. This strategic reorganization aims to facilitate a minority stake acquisition by Mastercard Inc. in these high-growth business units, as indicated by Chief Executive Officer Ralph Mupita during an interview with Bloomberg.
The growing population of tech-savvy individuals in Africa is increasingly utilizing mobile phones for essential services, including banking, driving demand in the fintech sector. MTN has reported a significant rise in mobile-money transactions, which grew by 35% in constant currency terms, surpassing $320 billion.
Mastercard’s potential investment in MTN could reach up to $200 million, valuing the fintech unit at an impressive $5.2 billion. Specifics regarding the stake size will be disclosed upon the deal’s completion. According to Mupita, progress is more advanced in Uganda and Ghana, while Nigeria encounters regulatory complexities that need to be navigated.
Additionally, MTN is considering network-sharing agreements, aligning with trends observed in European markets, as stated by Mupita. The company, recognized as Africa’s largest carrier by sales, has declared a 2024 dividend of 3.45 rand per share, which exceeds the 3.35 rand average analyst estimate, and aims for a higher dividend of at least 3.70 rand per share for the current financial year.
In conclusion, MTN Group is embarking on an important reorganization of its fintech operations in Nigeria, Ghana, and Uganda to enable Mastercard’s minority stake acquisition. The significant rise in mobile-money transactions highlights the growth potential of the fintech sector in Africa. As the company navigates regulatory complexities and explores network-sharing opportunities, it remains committed to ensuring strong financial returns for its shareholders.
Original Source: businessday.ng