MTN Group’s long-discussed plan to reduce its shareholding in MTN Nigeria is no longer on the immediate schedule. The Nigerian unit has returned to profitability and resumed paying dividends, but changing tax dynamics complicate the path to a public sale.
MTN Group President and CEO Ralph Mupita indicated during the company’s Q3 2025 results conference in November that recent changes to Nigeria’s capital gains tax (CGT) regime make short-term reductions in the group’s stake uncommercially attractive. As a result, plans to dilute ownership in favor of local investors have effectively been halted.
“Changes in tax law have complicated the situation,” Mupita said, according to records released in December. “There have been some changes to CGT, but at the moment it’s not something we’re pushing for. We’re in a sense backing off and holding back. We haven’t set ourselves a hard timetable, but developments in tax law have made it a bit less attractive to do that now. So it looks like we’ve put a pause on that effort, mainly due to the changes in tax law around capital gains.”
The suspension marks a shift from the telecom giant’s long-standing plan to deepen local ownership once its Nigerian operations become profitable. Although the company has cleared key financial hurdles, investors are increasingly concerned that rising CGT rates could change the economics of selling large shares and that new tax rules could slow major capital market transactions.
MTN Group responded to requests for comment at the time of publication.
As part of recent tax reforms, Nigeria increased capital gains tax on companies from 10% to 30%, increasing the cost of large stock transactions. CGT applies to gains made on the sale of shares and other shares and was created to limit tax arbitrage between trading income and taxable profits.
For CGT to apply, the share transaction must exceed £150 million ($105,763.40) and the profit must exceed £10 million ($7,050.89).
The tax changes come at a time when MTN Nigeria has returned to profitability, resumed dividend payments and cleared key conditions that had previously delayed the sale. The Nigeria unit posted a profit of ₦750.19 billion ($528.95 million) for the nine months to September 2025, compared with a loss of ₦514.9 billion ($363.05 million) in the same period last year, and declared an interim dividend of ₦5.00 per share.
MTN Nigeria stock is trading at ₦573.90 per share as of Monday, January 12, 2026. MTN Group is expected to receive total dividends of approximately R975 million ($59.19 million) from its Nigerian subsidiary.
MTN Group has long expressed its intention to deepen local ownership of its Nigerian operations. In April 2025, Mr Mupita reiterated his plans to reduce his stake in the group once MTN Nigeria eliminates its negative equity position and resumes dividend payments. The initiative forms part of MTN’s localization agreement with the Nigerian government following a 2016 settlement over unregistered SIM cards.
“The only localization we have as MTN Group is that at some point there is a potential sale of about 11% in Nigeria,” Mpitane said at the time. “This is something we have been saying for a long time. Over time we want more Nigerians to own the company. And we are ready to sell up to 65%. We are at about 76%.”
The proposed transaction will be MTN’s second major retail public offering in Nigeria, following the sale of MTN Nigeria shares to local investors in 2021. The offering was oversubscribed and 661.25 million shares were allotted, including a 15% greenshoe option, reducing MTN Group’s stake from 78.8% to 75.6%. More than 126,000 investors participated, including Nigerian pension funds representing approximately 6.5 million contributors.
Market analysts stress that rising interest rates have made deals of this size more expensive. Nigeria’s CGT rate is higher than that of several peer markets, including the United States (21%), South Africa (21.6%) and Kenya (15%).
Nigerian stocks lost ₦6.54 trillion ($4.61 billion) in value in November 2025, the biggest monthly decline since 2020, as investors reacted to the implementation of the new CGT regime scheduled for January 2026.
Under the new law, gains from the sale of shares will be taxed at 30% regardless of the holding period, compared to the previous framework, which allowed short-term transactions to be taxed at 10% as trading income. For example, if you buy a stock for ₦600 and sell it for ₦1,000 within a month, you will get a 10% trading profit. Now, profits are fixed at 30%, completely changing the economics of trading.
Mustafa Umar, an industry and equity research analyst at Lagos-based investment firm CSL Stockbrokers Limited, said the increase in CGT rates is particularly important for transactions such as MTN’s proposed sale.
“In the case of MTN, the sale of 11% in MTN Nigeria is a very significant transaction,” he said. “If you apply CGT at that rate, the premium is significant.”
Umar added that foreign portfolio investors were the first to exit towards the end of 2025. “There’s still a wait-and-see attitude in the market,” he said. “People want to see how the law will play out in practice before they commit new capital.”
He expects this attitude to fade as enforcement of the law becomes clearer.
Although the new CGT regime has destabilized the market, the government insists the reforms will strengthen Nigeria’s capital markets in the long term, with plans to cut interest rates to 25% soon.
Taiwo Oyedele, chairman of the Presidential Committee on Fiscal Policy and Tax Reform, said in November that the new framework would improve transparency and fairness for investors.
He said: “The reforms will make investment in the Nigerian capital market more attractive, reduce investment risks and ensure fair treatment of legitimate costs borne by investors.” “In essence, this reform promotes fairness and trust in markets, not the other way around.”
But for companies like MTN, timing is an immediate concern: whether to wait for interest rate transparency and relief or absorb higher costs in a market that is still adjusting to tax restructuring.
