MTN Ghana’s localization push: A great agenda
By Prof. Samuel Lartey,
Introduction
IN a landmark move for Ghana’s economy, MTN Ghana has increased local ownership of its subsidiaries, Scancom PLC and MobileMoney Limited, from 27.9% to 30%, according to its Q3 2024 performance report.
This strategic shift, achieved on October 31, 2024, reflects MTN’s broader commitment to deepening local investment and aligning with regulatory expectations.
With a potential to bring sweeping economic benefits, this localization initiative stands as a testament to MTN Ghana’s dedication to empowering citizens and transforming the business landscape.
Collaboration with the Ghana’s Socioeconomic Sector
MTN Ghana traces its origins back to 1996, when it was initially launched as Spacefon by Scancom Limited. The company’s entry into the Ghanaian telecommunications market marked the beginning of a new era for mobile communication, as it introduced innovative services that quickly gained widespread adoption.
In 2006, the company became a part of the MTN Group, one of Africa’s largest telecom operators, and rebranded as MTN Ghana. Over the years, MTN has undergone significant expansion, becoming the dominant player in Ghana’s telecom industry, with over 27 million subscribers as of 2024.
MTN Ghana has been instrumental in driving technological advancements and digital transformation in the country. The company has invested heavily in infrastructure, including 4G network expansions and pilot projects for 5G, to improve connectivity and coverage nationwide.
As a market leader, MTN has played a key role in enhancing communication services, driving internet penetration, and introducing groundbreaking innovations in mobile technology.
MTN Ghana’s most significant impact beyond telecommunications has been through its MobileMoney service, which was launched in 2009. This service revolutionized financial transactions in Ghana, providing a convenient, accessible, and secure platform for millions of people, especially in rural areas where access to traditional banking is limited.
MobileMoney has significantly contributed to financial inclusion, with over 16 million active users as of 2024, making it a cornerstone of Ghana’s financial ecosystem.
MTN Ghana actively collaborates with financial institutions to offer a wide range of services that enhance lives and livelihoods.
Partnerships with banks and fintech companies have enabled innovations such as digital savings accounts, microloans, mobile insurance, and payment platforms that facilitate seamless transactions for businesses and individuals.
These collaborations have empowered SMEs, provided financial solutions for unbanked populations, and supported entrepreneurial growth.
Additionally, MTN’s integration with the financial services sector has boosted the informal economy. MobileMoney agents, who operate as financial service providers, create income opportunities and drive economic activity across the country.
By facilitating access to financial services, MTN Ghana has improved economic stability for many Ghanaians, allowing them to save, invest, and grow their businesses.
Overall, MTN Ghana’s growth and strategic partnerships with the financial services sector have been pivotal in transforming the lives and livelihoods of millions, making the organization a key player in the country’s socioeconomic development.
Empowering Citizens and Local Investors
This increase in local ownership marks a significant win for Ghanaian investors and citizens. By raising the localization stake to 30%, MTN Ghana enables more Ghanaians to share in the company’s financial success, directly impacting household incomes and overall financial well-being.
As of Q3 2024, MTN Ghana reported revenues of GH₵12.7 billion, driven by data and mobile money services, indicating that local shareholders stand to gain significantly from dividends and future growth.
This move has already piqued the interest of local investors, boosting public confidence in the stock market. More Ghanaians owning shares in a telecommunications giant like MTN creates wealth within the country and contributes to increased financial literacy, a key driver for economic resilience.
Boosting Business and Innovation
MTN Ghana’s localization drive has immense implications for the local business environment. With the increased stake, the company is poised to foster greater collaboration with local businesses and technology startups, spurring innovation.
Ghana’s digital economy, valued at $4.5 billion as of 2023, could see further expansion, especially in areas like mobile financial technology and digital services.
The MobileMoney Limited subsidiary continues to be a critical driver of financial inclusion, having processed transactions worth GH₵1.2 trillion ($100 billion) in 2021 alone.
With local ownership, there is an opportunity for MobileMoney to develop even more relevant solutions tailored to the needs of small and medium enterprises (SMEs), which constitute over 80% of Ghana’s private sector.
Customized financial products such as microloans and mobile-based savings options could drive entrepreneurial growth, increasing productivity and creating a more dynamic business environment.
Reducing Service Costs and Enhancing Quality
High telecommunications costs have long been a concern for Ghanaian businesses and citizens. However, MTN Ghana’s localization and subsequent collaborations with regulatory authorities could pave the way for cost reductions.
By prioritizing local governance and efficient resource management, MTN could implement measures to make services more affordable while maintaining high quality.
Data usage remains a primary driver of MTN Ghana’s revenue, having contributed to over 60% of the company’s earnings as of September 2024. With strategic local investments, MTN can expand its infrastructure to provide more reliable and affordable internet and mobile services.
This would be a crucial development in a country where digital connectivity is pivotal for both personal and business growth.
Creating Employment Opportunities
MTN Ghana’s localization strategy also promises to generate significant employment opportunities, both directly and indirectly. Currently, MTN Ghana employs over 2,500 people directly and supports thousands more through its expansive network of MobileMoney agents, distributors, and partners.
The increase in local ownership could lead to further expansion, especially in underserved rural areas, providing steady income for thousands of Ghanaians.
MobileMoney agents, for instance, play a crucial role in the informal economy, with the sector employing over 180,000 people nationwide.
As the company expands its services and local investment, more opportunities for youth employment and entrepreneurship will arise, boosting economic inclusivity.
The formal sector is also likely to benefit, with potential increases in hiring for roles in customer service, technology development, and business management.
Strengthening Ghana’s Economy
At the macroeconomic level, MTN Ghana’s localization achievement contributes to the strengthening of Ghana’s financial system. The telecommunications sector, which contributed 10% to Ghana’s GDP in 2023, is a critical pillar for economic development. By increasing local ownership, MTN Ghana ensures that a larger share of profits remains in the country, fueling economic growth and infrastructure development.
Moreover, MobileMoney’s impact on financial inclusion cannot be overstated. With over 16 million active MobileMoney users as of Q3 2024, MTN Ghana has revolutionized access to financial services, particularly for rural populations.
The ongoing localization of MobileMoney Limited could lead to even more tailored services, such as mobile insurance and micro-investment platforms, which would benefit both individual users and businesses.
Conclusion
MTN Ghana’s push for deeper local ownership is more than a regulatory compliance measure; it is a transformative economic strategy with the potential to empower Ghanaians, drive business innovation, reduce service costs, and strengthen the nation’s economic fabric. With increased investment from and for Ghanaians, the country is set to experience significant gains, making MTN’s localization initiative a pivotal moment in Ghana’s journey toward economic prosperity.
Prof. Samuel Lartey
sammylaatey@yahoo.com
