Kogi State vs MTN Nigeria: Navigating the Complexities of Taxation, Regulation, and Sustainable Development
Dr. Aiyeku Olufemi Samuel Ph.D.
Lead Consultant, Global Human Capital & Energy Management Limited
Introduction
The clash between Kogi State Government and MTN Nigeria has once again spotlighted the underlying friction in Nigeria’s federated system regarding taxation, infrastructure deployment, and the ease of doing business. While governments at the subnational level are increasingly under pressure to generate internal revenues, the strategies employed often risk alienating critical investors and crippling long-term economic growth.
This write-up critically examines the Kogi-MTN standoff, identifies the core issues, analyses the macroeconomic and microeconomic implications, and offers actionable solutions and strategic recommendations.
Background: A Brief on the Dispute
In recent years, Kogi State officials have accused MTN of:
• Non-payment of certain state-imposed taxes and levies,
• Violating environmental regulations,
• Defaulting on business premises and infrastructure levies.
In reaction, Kogi authorities threatened (and at times enforced) the shutdown of MTN’s critical infrastructures including base transceiver stations (BTS), fiber optic cables, and data hubs, resulting in service disruptions across the state and neighboring regions.
MTN, on the other hand, maintains that:
• They have complied with all constitutionally mandated federal taxes.
• Many of the levies are duplicative, arbitrary, and damaging to their operations.
• The dispute discourages private sector investment critical for economic development.
Core Problems Identified
Multiplicity and Ambiguity of Taxes
The Nigerian business environment is characterized by over 50 different taxes at federal, state, and local levels, many overlapping and conflicting. In Kogi’s case, these include environmental taxes, business premises registration, and telecommunications infrastructure levies, among others.
Effect: Increases operational cost, reduces willingness to invest in infrastructure, and slows broadband penetration.
Weak Regulatory Coordination
Federal agencies like NCC regulate the telecom industry, but state authorities often impose conflicting demands without a clear harmonization framework.
Effect: Disrupts regulatory certainty needed by investors.
. Revenue Hunger at the Expense of Development
In its 2024 budget, Kogi projected around ₦34 billion as IGR (Internally Generated Revenue), much lower than Lagos or Rivers. In attempts to meet revenue targets, states often resort to aggressive tactics against large corporations.
Effect: Short-term revenue gains but long-term investor flight.
Disruption to Service and Economic Activities
Shutdowns of telecom installations threaten banking operations (POS, ATMs), emergency services, e-commerce, education, and overall productivity. MTN controls a significant chunk of mobile and data services in Nigeria.
Effect: Loss of productivity, security risks, and hardship for citizens.
Microeconomic and Macroeconomic Indices
Indicator Data (as of 2024 estimates)
Kogi State GDP $5.4 billion
Telecom Sector Contribution to Nigeria’s GDP 16.5%
MTN Subscriber Base in Nigeria 76 million
Unemployment Rate (Kogi) 28.5%
Inflation Rate (National Average) 28.92%
Broadband Penetration in Nigeria 45.5%
Nigeria’s Ease of Doing Business Rank (World Bank 2020) 131/190
Broader Challenges Highlighted
• Poor Ease of Doing Business in Subnationals: Kogi State’s actions worsen Nigeria’s global image as an unstable investment destination.
• Poor Infrastructure Financing: Rather than facilitating telecom expansion, the government seems to be stifling it.
• Security Risk: With telecom shutdowns, emergency communication systems are impaired.
• Youth Unemployment: With e-commerce, fintech, and remote work heavily reliant on stable telecom infrastructure, Kogi’s youths are disproportionately hurt by disruptions.
Strategic Solutions
Tax Harmonization and Digital Tax Registry
• Establish a Kogi State Unified Business Tax System integrating federal, state, and local taxes into a seamless platform.
• Reduce taxes into manageable and predictable frameworks.
Public-Private Partnership for Infrastructure
• Collaborate with MTN and other telecoms to co-invest in rural broadband expansion.
• Offer tax incentives for network rollouts to underserved areas.
Establishment of a Telecom-Friendly Policy
• Enact a State Telecommunications Investment Bill that protects telecom assets, regulates fair taxation, and supports infrastructural expansion.
Alternative Revenue Strategies
• Develop agro-processing zones, industrial parks, and ICT hubs.
• Tap into digital economy initiatives rather than overburdening traditional corporations.
Conflict Resolution Mechanism
• Create a Standing Business Council comprising:
o State Representatives
o Organized Private Sector Groups
o Telecom Associations
• Resolve disputes internally before escalation.
Policy Recommendations
Recommendation Impact
Tax harmonization Improves predictability and reduces conflict
Dialogue and Mediation Committee De-escalates tensions and ensures continuity
Telecom Investment Incentives Accelerates infrastructure growth
Public Sensitization Campaigns Builds citizens’ trust in government policies
Infrastructure Protection Laws Safeguards national security and economy
Conclusion
The Kogi State-MTN face-off is a warning sign that Nigeria’s federated governance model needs urgent recalibration, especially in the area of economic governance. Over-reliance on aggressive taxation without strategic economic thinking will only drive critical investors away, worsen unemployment, and inhibit the state’s developmental aspirations.
The future must focus on partnership, innovation, and building a competitive investment climate. Kogi State has the opportunity to transition from conflict-driven revenue generation to a collaborative, tech-driven, and investor-friendly economy.
If it chooses wisely, Kogi can lead Nigeria’s journey toward a sustainable digital economy in Africa.
