Title Page Karmax

TITLE PAGE

MULTINATIONAL CORPORATIONS AND SOCIO-ECONOMIC DEVELOPMENT IN NIGERIA: A STUDY OF MOBILE

TELECOMMUNICATIONS NETWORK (MTN).

BY

NYOR GABRIEL AZABSU/SS/M.SC/07/3498.

A DISSERTATIONSUBMITTED TO THE POSTGRADUATE SCHOOL, BENUE STATE UNIVERSITY, IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE DEGREE OF MASTER OF INTERNATIONAL RLELATIONS AND STRATEGIC STUDIES IN POLITICAL SCIENCE.

DECEMBER, 2010

DECLARATION

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It is my solemn declaration that this dissertation has been solely written

by myself and has never in no means submitted for the award of any

certificate or degree. It is a product of intense interplay of public opinions,

documentaries and facts which have made this quest a reality.

………………………….. …………………………………Nyor Gabriel Aza Signature/ Date

APPROVAL PAGE2

We certify that this dissertation titled: Multinational Corporations and

Socio-Economic Development in Nigeria: A Study of Mobile

Telecommunications Network (MTN) has been duly presented by Nyor

Gabriel Aza ( BSU/SS/M.SC/07/3498) of the Department of Political

Science Faculty of Social Sciences, Benue State University ,

Makurdi, and has been approved by the Examiners:

Supervisor: Head of Department:

Signature: …………………. …

Signature…………………….

Name: Apam, J.I.(P.hD) Name: Apam, J.I.(P.hD)

Date: …………………………… Date: ………………………

Having met the stipulate requirements, the dissertation has been accepted by Postgraduate School.

______________________ Dean

Postgraduate School _______________________ Date

DEDICATION

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This piece of work is dedicated to the Lord Almighty for giving us life,

grace, protection and ability to carry out this endeavour. This dedication

also extends to my grandmother, father and uncles, brothers and sisters,

supervisor, lectures, friends and all those that contributed to the success

of this programme. Aondo Alu Aven Man Asee Ne Chii Amen.

ACKNOWLEDGEMENT

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In the process of undertaking this programme in its entirety, some persons

of honour gave invaluable and I immeasurable contributions, financially,

morally and otherwise that are worth acknowledging. Some of whom I

have to express my pleasure is my Head of Department Dr. James Apam

who is also a supervisor to this work. It is important to note that through

his constructive criticisms, objective observations and intellectual sound

judgment paved way to this brilliant academic pursuit. His effort as a

supervisor has not helped me only in this regard, but will continue to

guard me in similar ventures and even beyond.

To be acknowledged also is my grandmother whose natural parental

concern, love, advice and prayers attracted God’s presence on my side to

undertake this progamme. My father Asongo Nyor is worth

acknowledging for the parental care and concern, advice and financial

assistance.

My profound gratitude goes to my elder brothers James Nyor and Barr.

Gilbert Tor for their numerous contributions that aided the completion of

this programme. I pray that God in his infinite mercy assist them in the

times of need.

Apart from the above personalities acknowledged, special thanks go to

Uncle TT Gbem, Adekaan, Akpan, Tor Nyor, Nyor Paul, Tor Tiv, Terfa

Ortese, and my brother Detimbi and Selumun, I also acknowledged their

contributions for the success of this programme. This acknowledgement

also goes to the families of Ayom, Pinot Ogbaji, Aondowase Pough Tim,

and friends in likes Terlumun Kaanher, Sunday Sabe, Peter Baver, Doom

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Amokaha, Godfrey Amaakaven, Sam Tough and other too numerous to

mention. Some were instrumental for books, while some right from the

beginning started giving their quota during the course of the study.

My profound gratitude also goes to my lecturers whom through their

efforts impacted knowledge in me and the entire authority for giving me

the opportunity to further my studies.

I wish to thank those whom their names have not been mention in this

acknowledgement but have contributed in one way or the other to the

successful completion of this project. God be with you all amen.

ABSTRACTThis study titled “Multinational Corporations and Socio-Economic Development in Nigeria: A study of Mobile Telecommunications Network (MTN)” was chosen basically to find out if socio- economic development is associated with Multinational Corporations as acknowledged by Obasanjo in 1999. he was of the opinion that the basis for sustaining democratic culture in Nigeria will be possible through socio- economic development

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which will be ensured by Multinationals. It was in this context that the Government of Nigeria pursued some programmes to ensure openness of the economy to attain the goal. Following this, the study wished finding out what might be the impact of MTN teledensity on the socio- economic development of Nigeria. In view of this, four propositions were drawn and data were sourced from both primary and secondary sources with dependency as the theoretical framework of the research. It was at the interface of both propositions and the data that the research discovered that the presence is not meant for the socio- economic development of Nigeria as the research measuring scale scored MTN 36.22% positively and 58.03%negatively. In this regard the research concluded by saying that the presence of MTN as a Multinational does not bring about socio- economic development in Nigeria. On this note the research recommends that the search for socio-economic development will only be realized through socio-political and economic revolution that reduces ties with western capitalism. In addition, a new political order should emerge to reduce emphasis on foreign loans, grants, aids, investments, policies, procedures and strategies in our society. This re-birth will be only our road to socio- economic development rather than encouraging the influx of Multinationals in our economy with it’s abound evils.

TABLE OF CONTENTS

CONTENTS: PAGES:

Title page: - - - - - - - - - i

Declaration: - - - - - - - - ii

Approval: - - - - - - - - - iii

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Dedication: - - - - - - - - - iv

Acknowledgement: - - - - - - - v

Abstract: - - - - - - - - - vii

Table of Content: - - - - - - - - viii

CHAPTER ONE

1.0 Introduction: - - - - - - - 1

1.1 Background to the Study: - - - - - 1

1.2 Statement of the Problem: - - - - - 12

1.3 Objectives of the Study: - - - - - 13

1.4 Significance of the Study: - - - - - 14

1.5 Research Propositions: - - - - - - 15

1.6 Scope and Limitations of the Study: - - - 15

1.7 Methodology: - - - - - - - 16

1.8 Conceptual Clarification: - - - - - 18

CHAPTER TWO

2.0 Literature review and Theoretical Framework: - - 20

2.1 Divergent theoretical views on Multinational Corporations: 20

2.1.1 Theory of Mercantilism: - - - - - - 21

2.1.2 Theory of Absolute Advantage: - - - - - 22

2.1.3 Theory of Comparative advantage: - - - - - 24

2.1.4 Market Imperfection and Oligopolistic Model: - - - 25

2.1.5 Product Life Cycle Theory: - - - - - - 25

2.1.6 Eclectic Theory:- - - - - - - - - 27

2.17 Internationalization model: - - - - - - 28

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2.1.8 Dependency Theory: - - - - - - - 29

2.2 Theories of Economic Development: -- - - - 30

2.2.1 The Liberal Perspective of Economic Development: - - 31

2.2.2 Marxist Perspective of Economic Development:- - - 34

2.3 Multinational Corporations: - - - - - - 37

2.4 Economic Development: - - - - - - 49

2.5 Theoretical Framework: - - - - - - - 55

CHAPTER THREE

3.0 The Nature of Nigeria Telecommunication, the Reform Process and

the Evolution of MTN Telecoms Company in Nigeria’s Economy: 60

3.1 The Nature of Nigeria’s Telecommunications before the Reform: 60

3.2 The Reform of the Telecommunications Sector in 2000: - 62

3.2.1 The Reform Process in the Sector: - - - - - 65

3.2.2 Legal and Regulatory Framework of the Reform: - - 67

3.3 Evolution of MTN in Nigeria’s Economy: - - - - 72

3.3.1 Subscriber Base: - - - - - - - - 73

3.3.2 Tariffs and Rates: - - - - - - - - 75

CHAPTER FOUR:

4.0 An Assessment of Contributions of MTN to Socio-Economic

Development of Nigeria: - - - - - - 80

4.1 Data Presentation and Analysis: - - - - - 80

CHPATER FIVE:

5.0 Summary, Conclusion and Recommendations: - - -

119

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5.1 Summary: - - - - - - - - -

119

5.2 Conclusion: - - - - - - - - -

125

5.3 Recommendation: - - - - - - -

128

Bibliography: - - - - - - - -

131

Appendix A: - - - - - - - -

Appendix B: - - - - - - - -

LIST OF TABLES

Table 4.1.: Distribution and Collection of Questionnaire

(Yes or No base) :- - - - - - - - 81

Table 4.2: Opinion Base Answers: - - - - - - 82

Table 4.3: Results: - - - - - - - - 84

Table 4.4: Questions and Result: - - - - - - 96

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Table 4.5: Subscriber Level/Teledensity: - - - - -

103

Table 4.6: Responses: - - - - - - - -

111

Table 4.7: Summary of the Result: - - - - - 117

LIST OF FIGURES

Figure 1: - - - - - - - - - - 98

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CHAPTER ONE

1.0. INTRODUCTION

1.1. Background to the Study The profiteering outfit called Multinational Corporation whose

activities are pervasive especially in the developing economies in the contemporary world had its origin from the epoch of mercantilism that spanned between 15th – 17th centuries. During this period, the prestige of states was calculated in terms of the amount of bullion acquired, maintained, retained and expanded. In view of this, Spero (1981) submits two underlining principles of the political quantum that shaped economic interactions. The first was the formation of powerful nation states from the ruins of medieval universalism and local particularism. The emergence of newly centralize political units whose policy goal was the consolidation of power, both internally, vis-à-vis local power structures, and externally, vis-à-vis other states. The second quantum was the competition among these many, nearly equal states. Under this, the economic realms become

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the main arena for political conflict and wars. The pursuit of state power was carried out through the pursuit of national economic power and wealth; the process of competition limited by political reality translated into economic competition.

In the 19th century, military and political dominance of Britain enabled her to had adopted and internationalized liberal economic system. However, there was change towards the end of the century, as the liberal economic system all fell along the pale and weak political power domination of Britain. This permitted the emergence of other newly emerging powerful capitalist states and classes which gave rebirth to competition where satellite enclaves were sourced in the international system where imperial capitalism emerged.

The new era that emerged as a result of the emergence of newly powerful states and classes succeeded to establish new International economic system where political domination over other societies warranted economic domination and exploitation. He that dominates others controls investment and trade, regulates currency and production, manipulates labour, thus establishing all structures of economic dependence in the controlled area even after so called independence.

As the practices in the international system were dynamically phasing out for the new ones, so the strength and the locus of activities of multinationals were becoming more expansive and insurmountable especially in developing economics due to the dependencies created at the time of total control. In view of this, the economies of third world societies are in dependent state such that the funds to finance development are unavailable. With this scenario and due to the financial and technological strength of multinationals often they are regarded by some people as agents of development. For example Obasanjo by assuming office in 1999 states that the solution to Nigeria’s economic impasse will be corrected by encouraging Foreign Direct Investment (FDI) in the economy through Investment Promotion and Protection Agreement

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(IPPA) and the Multilateral Investment Guarantee Agreement (MIGA) where multinationals were encouraged to invest in Nigerian economy (Adedeji, 2005).

The phenomenon called Multinational Corporation which was seen by the President as a means of correcting the economic impasse was defined by Vernon (1972) to mean 

a parent company that controls a large cluster of corporations of various nationalities. The corporation that makes up each cluster appears to have access to a common pool of human and financial resources and seen response to elements of a common strategy. 

This view elaborately suggests that, Multinational Corporations have places of origin and only spread out to other places to market their products and make profit and obtain raw materials for production to dominate the market as oligopolistic, eclectic, product life cycle and internationalization theories of Multinational Corporation have submitted.

Regarding their features, financial and technological strengths, Apter (1971) enumerated some distinguishing features of the Multinational Corporations from other industrial giants like extra ordinary size; high profiteering zeal; commitment to activities involving heavy use of skilled manpower and advertising outlays. These enduring features have shown that Multinational Corporation is often represented by different people with different names like Transnational Company, Transnational Enterprise, and Multinational Company or Corporation which could mean the same thing by different people as the case may be.

Generally speaking, the reduction of the borders of the Westphalia peace treaty (state) of 1648 as a result of globalization that succeeded in linking nation states of unequal strength in world affairs has prompted the looming activities of international giants like Coca-cola, Guinness Brewery, Julius Berger, ITT, Exxon, Shell, Agip, Mobil, MTN, Zain and many others into the economy of the Third World. And as the presence of these giants

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is growing, the economic base of these economies is waning down stupendously without limit which posses a worry on why the standard of living of the people of third world is dwindling with the growing number of Multinationals? Being it as it may, scholars have divided themselves on the issue. The first group of scholars looks at these giants as vehicle of development to the host. According to this group, the proliferation of the MNCs is of great significance hence they enhance the volume of trade, assist the aggregation of investment capital that is lacking in most places, which can aid development, finance loans and service debt, lobby for free trade and removal of barriers of trade so as to bring about integration that will benefits all. MNCs also undertake researches that allow technological innovation, which will bring development and diffused it into less developed countries. In the similar vein, the group gives credit to multinationals for the promotion of goods through encouraging their production according to the principle of comparative advantage and granting employment as well as encouraging the training of workers (Madden, 1977 and Cohen 1981)

The worry concerning the above assertion is that, with the growing number of MNCs in third world their economies have not changed, the existing low economic base and technological backwardness is persisting the hosting states. Could it be that the growing number of MNCs have not grown up to the point of changing the existing situation. This is why the other group argument multifarious impasses impacted on development of the host by MNCs. These include encouraging oligopolistic conglomerations and reducing local initiatives that can brings about autonomous development, engaged in repatriation and reducing the strength of capital that will encouraged investment, breeding debtors by creating balance of payment problems through over invoicing of imports and under invoicing of exports.

In regards to the issue of technology transfer, this group looks at the type of technology as a dependent one. Evens (1978) as cited by Gilpin

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(1987) asserts that multinationals do introduces inappropriate technology that hinders indigenous technological development by employing capital intensive productive techniques thereby causing unemployment and preventing the emergence of indigenous technologies. These giants also employ strategies of ensuring control in the process of establishing their presence internationally. Prominent of these strategies according to him is the patent right system to encourage inventiveness of their citizens and controlling of research abroad so that researches funds and development to the foreign companies are in support of future development based on profit maximization against fulfilling them in the poor countries.

The control of the multinationals over the ideology of the poor people is another reason for the attack by this group. The ideological control refers to the values that determine how people live. However this is distorted through advertisement and TV sponsored programmes leading to stimulating consumption in low income countries and accommodating local tastes to globally distributed production which leads to the expansion of the global shopping center. These kinds of practices are consider in one phrase by the research as “cultural and consumption imperialism”.

In view of the above, Vernon (1977) says it succeeded to creates psychological dependence through its machinery of propaganda, thus bringing about hunger and malnutrition, deepening level of poverty where people are cajoled into using scarce resources for worthless items, deepening through the reinforcement of feelings of inferiority which were the essence of colonial mentality.

The issues of sourcing and repatriation from developing economics to the developed economics are stupendous story under the cover of trade, turnkey contracts, loans and aids. A Latin America study on MNCs shows that 83% of US based multinationals in Latin American were from reinvested earnings or from local Latin American Savings; only 17% of US investment during the period represented a transfer of capital from rich

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to poor countries. However profits from these investments were repatriated as soon as possible (Vernon 1977).

Apart from the above example, similar situation is going on in Nigeria. A study conducted on Guinness brewery revealed serious repatriation. It was gathered that from 1983 – 1992, the company was able to raised a profit of 7.9 Million naira. Out of the amount, 93,969 thousand naira was paid to the Federal Government as tax, 45,335 thousand naira reinvested and 573,69 thousand paid to share holders where the remaining 5,739,979 million representing 86.3% of the profit was repatriated to Dublin even though Nigerian having 60% right of ownership (Nyor, 2005).

In the area of decision making concerning the running of the corporation is not in hands of the host but the parent country. Due to their financial and organization strength, they lobby for the change of government policies that prevent them from profit making. They are cases where they sponsor changes of governments and enthronement of new governments that will support their motive in the host state. Example Iran in 1953 under Prime Minister Mosaddegh Mohammed who was overthrew as a result his nationalization of Anglo-Iranian Oil Company which brought in Mohammed Reza Shah Paglavi with the help of UK/USA (Gasiorowski, 1991).

Despite evils associated with multinationals in the host their influx in Nigeria dates back to the colonial period when trading companies such as the Royal Niger Company, John Holt, Leventis, among others were established. The official endorsement was granted by the colonial government of Governor Richard in 1946 by a proclamation in which he declared free enterprise as the ideology of development. According to him “private enterprise has great contributions to make to the future welfare of Nigeria” (Madden, 1977). This conception was applied to indoctrinate the elite class that was about to take the mantle of leadership at independence with the hope to keep the African World (Nigeria) safe for

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capitalism. And a conviction which was further strengthened by the British sponsored World Bank report that prescribes the influx of foreign private capital into the economy of Nigeria as the only path to development of Nigeria in their study of the growth potentials of the Nigerian economy (Fernando 1990).

In the chapter titled “the conditions of Nigeria’s progress”, the report

submits: 

In Nigeria as in any other country relaying on private enterprise and initiative, the government’s role in economic development is essentially one of providing the basic services for, and giving encouragement and support to private endeavour. Government can assist economic growth by providing such communal facilities as roads, education and training, technical guidance and research which are prerequisites for private business operations. In circumstances common to most underdeveloped countries, it may have to supplement the financial resources of the private sector of the economy with facilities for long term credits and equality financing… and perhaps most important of all, it can adopt polices permitting the free development of private capital formation (Oye, 1985). The follow up of the report brought about numerous laws ranging

from aid to pioneering industries 1952 where selected industries were exempted from company tax for a period of five years; the income (Amendment) ordinance 1952 which allowed public and private companies to write off large sums of their capital in fixed assets during the early years of trading which will enable them to build-up reserves early; and the Industrial Development Income Tax Relief Ordinance 1958, all of which were to ensure favoruable settings for foreign capital investment in the country. Similarly, the three Regional Governments in Nigeria in 1956 issued a joint statement under the title “opportunities for overseas investment in the Federation of Nigeria”, stating: 

The government of the federation of Nigeria … recognizes that, Nigeria will for many years to come need outside capital and managerial and technological skills if

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her resources are to be developed to the extent which the government and the people of Nigeria desired (Ibid).

This conception has continued to grow through numerous enactments. During the SAP period, the scenario was the same as public ventures were privatized. At the beginning of democratic dispensation in 1999, the resuscitation of the Nigerian economy was identified as a central platform for a sustainable democratic order, which a focused foreign policy could tremendously assist by promoting FDI. Through bilateral joint commissions with nations identified as exporters of capital was adopted as a State programme. The President also made several State visits to promote the government’s economic policy of privatization, liberalization and deregulation and commercialization to build up foreign interest in the economy (Adedeji, 2005). This conception with policy frame works set a stage for “Economic Reform” programme that saw the influx of MTN and Econet now Zain as multinationals in Nigeria’s telecommunications industry. The question is how far have the Multinationals in Nigerian telecommunications able to change the problems of communications in the country to aid development?

The above question has been the major concern of the researcher in choosing the area for study. The reason had been that, the economic reform in Nigeria from 1999 acknowledged the critical role of communications in socio-economic development. Consequently, it was recognized that, the quality and density of the telecommunications network and intensity of the use of its services are major indicators of social and economic development. This makes it possible for the amendments of the 1987 and 1998 telecommunication laws which eventually led to the release of a new National Telecommunications Policy in 2000. The new telecommunications policy laid the foundation for the modernization and expansion of the telecommunications industry with it services (Federal Ministry of Information and National Orientation Agency, 2005).

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In 2001, competition in Mobil telephone was introduced with the licensing of three digital mobile (GSM) operators. Each of the operators paid a bid price of $285 million through auction for a digital mobile license with MTN, Econet wireless (now Zain) and Nigeria Telecommunication Limited (NITEL) for its GSM subsidiary M-Tel as winners. With this, the Tele density has risen from 0.42% per 100 inhabitants in 1999 to 13.72 as at the end of September 2005 such that the total subscriber level had shot up from less than half a million in July 2001 to 17 million by the third quarter of 2002. Despite the growth in the tele density, the issues of high tariff as compare to other places, which was initially as high as N50.00 per minute, drop calls, poor coverage and per minute billing and interconnectivity disputes between the GSM operators, were envisaged.

It is against the background of the prospects and challenges that the researcher wishes harmonizing with the intent of finding out whether the resuscitation of Nigeria’s economy will be achieved through the multinationals in the telecommunications industry, with case analysis of MTN Telecommunications Company.

The choice of MTN as the case study for this research is occasioned by the reason of being the biggest multinational in Nigeria’s telecommunications industry. And being it as the economic reforms submits and the researcher considers that, telecommunications sector is one of the causal social drivers and enhancers to development. Similar to this is the importance of information in business, governmental activities and all other areas.

The other area of concern for this choice is to verify claims of two groups of thinkers that see the subject matter from different views. This verification will enables the researcher have something to say about MNCs and see if there is need for the encouragement of multinational corporations in the developing economies or discourage their influx through suggestions.

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All the above issues that inspired this choice will enables the researcher assess the level of participation of MTN in the Nigerian economy in terms of development in the areas like education, health, infrastructural provision, employment etc. By way of effectively attaining to the task, data will be drawn from both primary and secondary sources. From the primary source, structured questionnaires will be design and administer to MTN subscribers in Makurdi town randomly to collect their own opinion on the subject. The primary source will be complemented by secondary data which will be sourced from the library, the corporate affairs commission, and Nigerian Communication commission and from MTN offices.

After the collection of data, it will be presented for analysis with the purpose of testing the validity and the reliability of rejection or acceptance of the research propositions. The data will be presented by the use of tables, charts, graph and other relevant tools, which it will be, analyze with the use of simple percentages and other statistical measuring tools if possible after which conclusion will be drawn on the findings and recommendations will be made. 1.2. Statement of the Problem

There is a simple truth of profound meaning that to live; people must have their physiological needs like food, clothing, and shelter. This is why from all ages of human existence the search for these needs have been paramount endeavours of individual, groups, societies and nation- states as they device different strategies policies and progammes to achieve these needs. This fact was why by assuming office as the president of Nigeria in 1999; obasanjo acknowledged that the solution to Nigeria’s economic impasse will be corrected by encouraging the influx of Multinationals through bilateral/ multilateral foreign policy.

The above shows that Multinational Corporations are capable 0f brinng socio-economic development in Nigeria. Well development is seemed to be ensured through Multinational Corporations in Nigeria, but

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the question is how and to what extent could Multinational Corporations capable to bring and ensure socio-economic development in Nigeria. As Multinational Corporations are seen as the vehicle of development, the researcher therefore focuses on the study of Mobile Telecommunications Network (MTN) with the focus on its teledensity. On this note research find out whether the teledesity has impacted positively on socio-economic development of Nigeria or not. In line with this, the research seek to find out whether there is relationship between Multinational Corporations and socio-economic development of the receiving state as thought by Obasanjo in his assumption of office in 1999 as the president of Nigeria. 1.3.   Objectives of the Study There are quite a number of objectives which this work seeks to achieve; these are some of the objectives

1. The main assumption of this study is to examine the role of Multination Corporations in the economic development of Nigeria with the specific case study of MTN Communications Company. This examination will enables the researcher to find out the extent through which MTN has been able so far to change the bottlenecks that were in existence hitherto their appearance in Nigeria and how this has changed the well being of Nigerians.

2. Similarly the study seeks to find answers to the question of why multinational corporations emerged in first place.

3. This study also intends to find out whether the policy thrust of the reform programme is achieved or not through the activities of MTN.

4. Apart from the above objectives, the study seeks to examine the positions of commentators on the subject of the research and find the truth through MTN.

5. This study also wishes to contribute to the growth of knowledge especially international economic relations and also served as a resource base for intending researchers in this area.

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6. In view of all the above, the research wishes to find out the route of our problems and the path to our development.

7. Lastly, we wish to examine whether the level of the contributions of MTN to socio-economic development is concomitant to its gain in the Nigeria economy and see if their presence worth recommending for or not. 

1.4.    Significance of the StudyThis study is so significant in many ways: theoretical; analytical; and

as well as a policy guide to policy makers.Theoretically this study will improve the strength of some theories

that stand in explaining the wide relationship between MTN as a multinational corporation and economic development in Nigeria. On the other hand it will serve the purpose of challenging some theoretical assumptions and uphold others at the end of the finding.

Apart from the above, with in-depth analysis of the topic, and empirical proofs at the end of finding, the study will serve the purpose of giving answers to some critical questions and serve as analytical tool that will contribute to knowledge development in the field of international economic relations especially and to the general endeavours.

More importantly, the study is significant for the fact that it will form a basis for future policy protection and guide to policy makers as to whether the influx of multinationals should be encouraged or not. At all ends, it will serve as a resource base for interested researchers and international economic practitioners.

1.5.     Research PropositionThe study has drawn up the following propositions to guide this

investigation:(1)        That the relationship between MTN and Nigeria is not possible

to bring development because of their market zeal.(2)         That there is an increase in Tele density in Nigeria with MTN

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but this does not have corresponding effect to development.(3)         That the presence of MTN in Nigeria is meant for market.(4)          The presence of MTN with its technology will discourage local

companies doing business in the area of its investment. 1.6.    Scope and Limitations of the Study

Activities of MTN Communications Company is basically concerns about service provision in telecommunications sector. This has been why the company as a foreign owned came to invest in Nigeria having been licensed by NCC. This gave the company the right to do telecoms business in Nigeria. It is in view of this that the researcher focuses on what contributions MTN has made for the development of the sector as well as the whole economy. This will takes a look at issues like teledensity, interconnectivity, quality of services, billing rates, reinvestment, repatriation, investment conditions, technology transferred. Apart from these, issue of corporate social responsibility will be considered in this study.

However, the research is constrained by a lot of issues. The income of researcher and the current economic impasse in the country and the world at large impacted negatively on the ability to obtain materials for the research work. The time factor is also another limitation to this research. The peculiar problem of limited and non availability of accurate data facing all researchers in the third world does not spare this one. This problem is caused as result of lack of reliable and accurate statistical data and inaccessibility of required information especially about multinational corporations.

Despite all these, the researcher has devised means of standing above the challenges so as to achieve the goal of finding out to what extent MTN is able to bring economic development through its policies and programmes.1.7.    Methodology

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In this part of the chapter, the procedure for data collection will be shown and the method it will be analysed. These procedures range from the source of data, techniques for its collection, sampling procedure and method of data analysis.

As required by this topic to carry out an in depth investigation in order to assess to what extent MTN has been able to contribute to the economic development of Nigeria the research made use of the available data. To this effect, the research resorted to the use of both the primary and secondary sources of data. From the primary source, questionnaires were designed and administered to MTN subscribers in Makurdi town to obtain their views on the project. The questionnaires were then administered with the use of random sampling techniques.

In addition from the above, observations of certain projects sponsored or aided by MTN were also visited and MTN foundation was visited where statistics on development in Nigeria was obtained. Personal interview was another procedure in which data on the subject was sourced.

Apart from the primary source, the secondary source of data was used to complement this endeavour. In this likes, data concerning the subject matter of this study was obtained from the Nigerian Communication Commission (NCC) for the fact of being the regulatory body to the communication industry in Nigeria. Similarly, data was sourced from the Corporate Affairs Commission (CAC) for the fact of being a statutory body in charge of corporate bodies in Nigeria. All these were accomplished with a visit to the MTN office in Abuja where information on its operations was obtained with the hope of testing the stated propositions.

Additionally, information concerning the subject was sourced from books, magazines, articles, newspapers, journals, periodic, monographs, handbills, pamphlets and other documentaries from the library and other relevant agencies. The researcher attempted to collect financial reports

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and accounts of the corporation from NCC, CAC several times but the effort yielded no good result. This was so because as we have mentioned that the generation of data cannot be devoid of limitations. In this likes the information was regarded as classified and as such was not made public. These include financial details such as we needed in verifying available figures by comparing the amount of sales and the reinvestment capital and assisted projects in Nigeria. The worst of it was that MTN is not quoted on the Nigerian stock exchange and this has made it difficult to obtain their financial statement as expected.

Despite all these constraints, the available data the researcher was able to lay hands on has been presented in a tabular form, charts and diagram and analyzed by the use of simple percentages and other statistical tools with the intent of making a varied generalization. 

1.8.    Conceptual Clarification In any meaningful discussion, the contestable concepts have to be

clarified. This is necessary so as to eliminate emerging confusion that might arise in course of going through the work. For the sake of this fact essential contesting concepts will be clarified as applied in this work only.

Multinational Corporation Or Company: this stand in this work to mean any firm or company doing business in the area that is not of its origin. In other words, Multination Corporation means firm or outfit carrying out profit seeking motive in other nations. To be specific, it is that business outfit that controls a large cluster of corporations of various nationalities. The corporation that makes up each cluster appears to have access to a common pool of human and financial resources and seen responsive to elements of a common strategy that is beyond local business outfits. Development: This implies the monumental plus steady change that bothers on welfare through the provision of basic needs like health,

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food, water, clothing, and housing. Development must transform quality of life. It involves improvement of the old existence to a new one. Economic development must be targeted and measured on the welfare, provision of social services and the greater opportunity to access those things at the time of need in quantity and quality.

Growth: This only implies a monumental improvement in the quality of outfit, volume of trade and services without having its reflection in the standard of living of the people.

Tele density: Is the way of determining the total level of subscriber’s line per 100 inhabitants. The Tele density calculates a number of lines per 100 inhabitants in an economy to find out how many have access to communication using the phone (Tele).   

CHAPTER TWO2.0.     LITERATURE REVIEW AND THEORETICAL FRAMEWORK 2.1. Divergent Theoretical Views on Multinational Corporation

International relations before and in the contemporary world constitutes a goal-seeking behaviour and a process of determining who gets what, when and how. This has given more privileged individuals as

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well as states the opportunity to make choices that serve their interest often and on the other end to the disadvantage of others especially regarding interaction among nation states. This scenario has been the reason why trade emerges with different regimes (free trade, protectionalism blocs etc) as acts of replenishing this goal seeking behaviour.

With the above however, since man is insatiable and cannot appropriate all his needs within his immediate environment, there is a need to interact for the purpose of attending to those needs in other places. This therefore gave birth to a complex social setting and the emergence of domestic and international trade where exchange within the same society and among nation-states emerged. It was in this process and the conception that multinational corporations got their footing in world affairs. Different theories stand in explaining why multinational corporations originated. Some of the theories look at the phenomenon as beneficial to all parts of the globe, while some theories see the emergence as exploitative and anti development to the hosts. This sub-section of the chapter will review the related theories that explain, encouraged and discouraged the influx of the industrial global giant in the world affairs. Although the work will be unable to consider all existing theories relating to this, however serious attempt will be made to review related theories with the hope of establishing diverse theoretical explanations of the phenomenon.  2.1.1.Theory of Mercantilism

It has been mentioned somewhere in this work that the origin of multinational corporation dates back to the era of mercantile capitalism that spanned from early 15th to the late 17th centuries. This idea with its practice was a protection oriented one. The theory holds that the strength and prestige of any society is dependent on the accumulation of specie (gold and silver) in other words called the bullion. In achieving this, the

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theory advocates that exports should be encouraged and imports discouraged so that the sales expands the arsenal of bullion. This theory encouraged the passage of laws by policy makers making it illegal to take gold or silver out of society, even if such specie was needed to purchase imports to produce their own goods for sale (Czinkota, 1999).

This assumption gave merchants the courage to go out, do business, invest, sale and acquire bullion to increase the prestige of their own societies. It was in the process that trans-border companies started emerging through the syndicate and guild systems. This idea is highly associated with people like Mun, Misselden, Davenant (1699) and other eighteen and nineteen mercantilist, like Alexander Hamilton, Henry Clay, Henry Charles Carey Abraham Lincoln, Thomas Malthus (www.royalcollection windsor.jps.jpg).

The theory is still relevant today in explaining the influx of multinational corporations especially into the third world. However, the motive is no longer to acquire the bullion, but to make profit from the investment places and take them back home to strengthen economic, social and political prestige of the sending state. For example, the prestige of USA in world affairs is partly financed by the profit made by her multinationals. In this regard Czinkota (1999) submits that US net overseas investment evolved steady from $6 billion in 1919 to $358 billion in 1983.

The strength of this theory is how it tries to protect security of the state despite of it being a trade of greed and power. More importantly, it encourages and protects local firms and technology from external companies especially less advanced technological societies. Despite all these, it falls short as it encourages exploitation, domination of the less powerful by the powerful. This also makes development concentrated and low exchange for the fear of spending the bullion.

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In spite of the shortcomings, this has succeeded to give us theoretical explanation on the subject and how development of any society will and can be achieved through exploitation of other places

 2.1.2.Theory of Absolute Advantage This theory emerged as an attack on mercantilism. This theory is

associated with Adam Smith as contained in his book entitled “An Enquiry into the Nature and Causes of the Wealth of the Nations” published in 1776. According to the theory trade between two nations is based on absolute advantage. This means that one nation is more efficient than another in the production of one commodity but is less efficient than the other nation in producing a second commodity, then both nations can gain by each specializing in the production of the commodity of its absolute advantage and each exchanging part of its output with other nations for commodity of its absolute disadvantage (high variable and fix factors for the production of a commodity).

Mercantile theory discussed above believed that nations could gain only at the expense of another, and advocated strict government control of economic activities and trade, while this theory believed that nations would gain from free trade and advocated a policy of laisser-fair where both juristic and natural persons would do business anywhere as far as they can have absolute advantage.

According to the theory of Absolute Advantage, free trade would cause world resources to be utilized most efficiently and would maximize world welfare for all nations and people. Laisser-fairism associated with the theory encouraged and made it possible, for MTN as a foreign company to be registered in Nigeria in 2001 when they bid and won the auction of license in Nigeria’s telecommunications industry. This theory also encourages the removal of trade barriers among nations so that exchanges will benefit everybody.

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The theory has brought about innovation as everybody is encouraged to produce the goods he has absolute advantage over another country and import the one he has absolute disadvantage of. The theory is criticized as it has succeeded in reducing absolute advantage as permanent cause in the history of societies. The theory also set the basis for exploitation since it was unable to show how the trade will benefit two trading nations. In view of this however, it has been able to give us sound track to the understanding of the emergence of multinational corporations. 2.1.3.Theory of Comparative Advantage

David Ricardo is the proponent of this theory as contained in his 1899 book entitled “On the Principle of Political Economy and Taxation”. This theory is not too different with the absolute advantage. The major assumption of the theory is that, even if a country possessed absolute advantage in the production of two products, it still must be relatively more efficient than the other country in one good’s production than the other. This means that a nation should specialize in the production of and export of the commodity in which its absolute disadvantage is smallest and import the commodity in which its absolute disadvantage is greatest. This has given ample opportunity to nationals of other nations to invest in other nations where their production has comparative advantage over the host. This theory suggests without reservation that societies with industrial ability should always produce and sell to raw material societies. This is why global giants like Shell, Mobil, Elf, Agip, Zain, MTN, and Exxon etc. do scan the globe and invest in countries where they have comparative advantage in the production of some goods over the host. 2.1.4. Market Imperfection and Oligopolistic Ownership Model

This theory also seeks to explain why multinational companies emerge to invest in foreign territories. This model assumes that business firms make foreign investments to exploit their quasi-monopoly advantages. The advantages of multinationals over the local companies

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like technology, access to capital, differentiated products built on advertising, superior management and organizational scale make them to create market imperfection and dominate the market. These investments according to the theory may be either horizontal or vertical. The horizontal investment of foreign production may reduce the competitor, eliminate duplicating facilities, and expand a firm’s operation in an existing product line. Vertical investments of foreign production are usually on raw materials. The investor controls input as oligopolistic firm, makes it possible to raise barrier to entry of new companies (competitors) whether local or foreign so as to protect their oligopolistic position. This is actually what took place between MTN and M-Tel in Nigeria’s telecoms industry, where MTN came and overthrew Mtel because of the ownership specific advantage. Scholars associated with this theory are the likes of Giddy (1977), Slaubik (1983) etc. 2.1.5.Product Life Cycle Theory

This theory explains changes in location of production. When new products are introduced in home country market, their sales and profit levels tend to increase sharply until they reach maturity. Competition increases rapidly as these products approach their maturity point; this competition narrows profit margins. At this stage, companies may utilize foreign manufacturing location to cover production cost and sustain profit margins (Kim and Kim 1996).

It is assumed by the theory that larger companies in highly advanced countries have comparative advantages in new production over companies in developing nations (eg. MTN, over M-Tel). Highly advanced technologies, highly educated labour resources and abundant capital are essential to develop a new product. But as the products become mature, product defects and technological imperfection, inherent in new products, are ironed out so that the method of production becomes standardized; competition begins to appear during the stage of market growth and becomes highly intensive during the stage of market maturity. At this

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time, so many companies will shift their standard manufacturing methods to developing countries for a number of good reasons:

Standard production requires many unskilled workers; Most developing countries have an abundant supply of unskilled

labour;and Labour cost is lower in developing countries than in advanced Countries.This theory assumes that every product passes through five phases

distinctively: introduction, growth, maturity, saturation, and decline stage. And when the product reaches the declining stage, and for company to stay in business, it must go out to other places were the product will still be of value so that the company will still be relevant in the business cycle (Magill, 1999).

From the standing point of this theory, we have seen why colonialism became possible after the industrial revolution. This means that multinational corporations loom around the world because of the falling profit at home and the cost of production. This is why multinationals go outside their places of its origin, appropriate and expropriate back home to solve production account imbalances. Scholars associated with this theory are the likes of Levitt Theodore (1976), Rosenau (1976), Nelell (1981), Wasson (1978) etc. 2.1.6.Eclectic Theory

This theory is being associated with John Dunning (1981). This theory attempts to explain a logical line between the international allocation of resources and the exchange of goods between countries. In other words, this theory argues the case of an integrated approach to international economic involvement on the basis of the advantage of both country’s location and a company’s ownership. The location specific advantages favour the host while ownership specific advantages favour an investing firm (Kim and Kim 1996:27). Thus, the theory helps to explain cross country differences in patterns of international involvement in international companies.

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The theory adds in its submission that specific endowment of both company and country are necessary for international involvement. This encourages the spread and growth of multinational corporations. This theory set standard that for a company willing to invest in overseas production facilities, it must have the following three advantages:

Ownership Specific Advantages. This is the extent to which a company has tangible and intangible assets unavailable to other firms.

Internalization advantages. It is the company’s best interest to use its ownership-specific advantages rather than license them to foreign firm.

Location specific advantages. The company will profit by locating part of its production facilities overseas (Dunning, 1981).

 2.1.7. Internationalization ModelThis model is highly associated with eclectic model in explaining why

national companies seek foreign base investment. This theory explains that multinational companies may suffer by producing at home to export to other countries because of cost-related factors; labour; transportation; raw materials; and competition. In this situation therefore, companies seek crossing borders to do business in places that are less competitive and business attractive. The internationalization is possible because of the ownership specific advantages possessed by the company which are projected by foreign direct investment (Preston 1993).

The ownership specific advantages enjoyed by the company in relation to comparative advantage over the local companies, even though they are local make the local ones suffer. They suffer because of lack of control over consumption in their own country. This is exactly what has happened in the Nigerian Telecommunications Industry where MTN due to their ownership specific advantages over M-Tel (NITEL) was able to eliminate them and established its own dominance.  2.1.8. Dependency Theory

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This is another theory that seeks to explain the effect of imperial capitalism alongside the looming roles of multinational corporations in the economy of the third world. This theory was influenced by the teachings of Karl Marx and Engels about the evils of capitalism. This theory asserts that the laws of motion of capitalism and contradictions existing in a capitalist economy forced it to expand into the less developed periphery of the world economy, which constitutes the problems of those areas. Because of under consumption and the falling rate of profit at home, the developed capitalist economies must dominate and exploit the less developed countries (Gilpin 1987). This leads to a hierarchical structure of domination between the industrial core and the dependent periphery of the world capitalist economy through multinationals and portfolio investments, uneven trade and exchange.

Advocates of the theory are the likes of Theotonic Dos Santos, Cardoso, Baldwin, Gunder Frank, Amin, Ake, Fanon and so many others. However, they differ in their definitions of precise mechanism that has brought about underdevelopment. The general positions regarding the relationship of the advanced capitalist to less develop economics can be placed into three categories: the exploitation theory, the doctrine of imperial neglect, and the concept of dependent development. All these strands of dependency theory are of the opinion that, any contact of third world economics with advanced ones is aimed at exploiting the former by the latter. To this end, multinational presence in the less developed economics is to maintain the dominance in the process of interactions of unequal partners.

It is worthy to mention at this point that this section of the chapter has been able to review some theories that seek to explain the motive behind the internationalization of companies. It is our desire to mention that, these theories have helped us to understand the nature of international trade. Although only one of these theories alone cannot give us the best understanding, it is the combination of these theories that has

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helped us to note that multinational companies invest in places where their profit motive is guaranteed. This is why MTN saw it obvious to invest in Nigeria where their profit motive is guaranteed as there was no competitor and the vastness of the Nigerian market. 2.2 .   Theories of Economic Development

Before and in the contemporary world, the issue of economic development is seen as the basis for existence. This is so because, for man to live, he must be contented and satisfy his needs, especially the physiological needs (food, housing, clothing etc.). This means that man’s existence is dependent on how far he is able to command nature to favour his existence. This has been why the creation of material conditions, production, distributions, exchange and consumption is obvious. The ability of any society to change nature to her favour has hierarchically differed the nature and type of societies and states. In other words, societies are not the same and this is dependent on their abilities to bring about economic development by changing nature to attend to its needs.

Different theories explain what and how economic development is achieved. In this subsection, two broad theories will be considered as part of explaining what constitutes economic development. These will range from liberal to Marxist perspectives.

2.2.1.The Liberal Perspective of Economic DevelopmentAccording to the liberal perspective, the world economy is a

beneficial factor in economic development; interdependence and economic linkages of advanced economies with less developed economies tend to favour the latter. It therefore means by the perspective that economic development occurs where there is interdependence and linkages since all societies are not endowed in the same way. Too this end, trade, international aid, and foreign investment make less developed economies acquire the export markets, capital, and technology required

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for economic development. This view was summed up in the title of the Pearson report, “Partners in Development 1969”.

This perspective maintains that an interdependent world economy based on free trade, specialization, and an international division of labour facilities domestic development. Flows of goods, capital, and technology increases optimum efficiency in resource allocation and therefore transmit growth from one place to another. It was regarded by this perspective that the basic obstacles to economic development is the preponderance of subsistence agriculture, a lack of technical education, a low propensity to save, a weak financial system, and most importantly, inefficient government policies. Once such bottlenecks are removed and a market begins to function efficiently, the economy will begins its escape from economic backwardness to economic development. In this light, Rostow (1980) wrote that the operation of market forces leads toward equalization of economic levels, real wages, and factor prices among nations and regions of the globe.

To most liberals, the key to economic development is the capacity of the economy to transform itself in changing conditions. Adam smith as he phrased it in his book “An enquiry into the nature and cause of the wealth of the nations”, 1776, showed why certain societies had overcome the obstacles to development had transformed themselves, and through adapting to changing economic conditions had become rich. The answer given is that these successful societies permitted the market to develop unimpeded by political interference (La, 1983).According to this perspective, the failure to develop is ascribed to domestic market imperfections, economic inefficiencies and social rigidities, Political corruption, a parasitic social and bureaucratic structure, and the failure to make appropriate investments in education, agriculture, and other prerequisites for economic development. Improper public policies such as high tariff barriers and overvalued currencies harmful to export interests

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are fostered by burdensome bureaucracies, unbiased, and economic nationalism.

Scholars associated with this perspective are the likes of Adam Smith, David Ricardo, W.W. Rostow, J. S. Mill, Lewis, Lal, Baker, Kindaleberger and many others. Their contributions have given insight on the conditions that constitutes economic development. However, the theory is challenged on the basis of being unable to explain the history of those bottlenecks to development especially what was and is going on in Africa. The market discipline offered by the theory as the way to economic development has placed Nigeria in a perplex conditions. The Structural Adjustment Programme (SAP) imposed on Nigeria by IMF and IBRD succeeded to have indebted the country. Adesina (2003) submits in this respect that in 1999, Nigeria spent 16½ times on interest payment than its pending on health, 8½ times on education not to talk of agriculture and other areas. In the same vein, an assessment conducted by IBRD in 1993 on energy development in Nigeria and other 20 developing countries revealed a highest capacity loss of 33 – 41% and lowest generating capacity at 200% (Nnanna, 2003). The current rate of inflation in the country brought about by the market discipline stands at 31.0% – 43.0% (Zenith, 2008). With the introduction of the market discipline in the country the value of Naira between June 1999 – 2001 had plummeted 30% (Adesina 2002).

Beginning from the time of the introduction of the market thought in the country the GDP has continued to narrow down below 35.5% and even the little remaining is repatriated by multinationals through over invoicing of imports and under invoicing of exports (Lokowa, 1994). The debt profile of Nigeria as 2008 was standing at $16.92 billion (Debt management office cited in Zenith, 2008). With these in mind we can say that liberal perspective of economic development is only a Washington consensus to redefine the world economic environment for their goal seeking agenda, taking into account the low industrial base of the third world. Apart from

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that, the theory tends to neglect the political framework, yet the process of economic development cannot be divorced from political factors. The domestic and international configurations of power and the interest of powerful groups and states are important determinants of economic development which they refuse to acknowledge. With these however it is still a useful theoretical tool in explaining economic development in Western view, which in no way applicable to our own circumstance. 2.2.2. Marxist Perspective of Economic Development

This perspective of economic development is associated with Marx (1818 – 1883) and Engels (1820 – 1895) which differs in what constitutes economic development from the former perspective discussed. Three issues are associated with this thought: economic interpretation of history; the dynamic of the capitalist development; and alternative planed path for economic development. In view of these, two methodologies were developed; dialectical materialism and historical materialism. It is considered by the theory that changes in the historical process are determined by changes in the economic system. This means that historical events are the result of a continuous economic struggle between different classes and groups in society. The major cause of this struggle is the conflict between the means of production and the social relation of production.

According to this theory the history of all societies is the history of Class Struggle emerging from the conditions of ownership of the means of production. This continuous struggle has made society to be in motion such that the law of dialectics: unity and struggle of opposites; transformation of quantity into quality; and negation of negation. It is the interplay of these laws in the context of mode of production and social relations that society moves forward to a next stage that is more developed than the former. In this regard they wrote that:

as a complex ready made things apparently stable… go through an uninterrupted change of coming into being and passing away, in which, in spite of all seeming all

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accidentally and all temporary retrogression a progressive development asserts itself in the end.

 They add that a system develops: 

When there is internal, qualitative transformation of its structures. Structural transformations are clear irreversible and have a clear-cut direction based on material interpretation. 

Going by this assertion, it is clearly observed that class struggle is the basis for change due to the contradictions that emerges within a mode of production. Without the struggle, society should have been static. The level of means of production and social relation in production always put the society in the state of motion such that the resolution of the conflict moves the society forward. In more concrete terms, a progressive nature of productive forces encouraged a progressive production of material goods for consumption, distribution and exchange. And the manners these goods are consumed, distributed and exchanged determine an economic development.

In final note, economic development occurs where there is transformation from quantitative to qualitative change in the economic system. And it emerges from the continuous struggle emerging from conflict between the classes in an economic system. The higher level of development of the productive forces and the social relations of production determines equitable distribution and exchange of the material wealth initiate the highest level of development (socialism and communism).

A look at these two perspectives of economic development differs from each other. The central argument of liberals is that development is determined by the nature and the efficiency of the market while the Marxist thought is that development is the product of the class struggle between the classes in a mode of production. Interplay of contradiction emerging in the mode of production pushes the society to the next stage

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when resolved. With these views in place, the researcher assumed that all the perspectives have a case based on its orientation. But for the researcher, Marxist thought has proven more elaborate and scientific as this had tested right the proposition of why Africa is in her state of economic alexia due to colonialism that militate the development of productive forces, means of labour, class and causes disarticulation, and disarticulation of the sectors through forced labour and mono-cultural production initiative.

 2.3.   Multinational Corporation A critical glance at literature as we have already mentioned

indicates that the discussion on the subject has divided scholars into two camps. One of the camps looks at multinational companies as vehicle of development to the host nations due to the fact that it transfers and diffuses technology, brings capital lacking into the host, solves the problem of balance of trade and payment through the increase of the GDP, solves the problem of unemployment and many other benefits to host. On the other hand, the other group looks at the phenomenon as vehicle of underdevelopment and dependence due to the evils of repatriation of profit through under invoicing of exports and over invoicing of imports, unemployment problem through capital intensive productions rather than labour –intensive, discouragement of local technologies due to their oligopolistic nature and imperfection of the markets, introduction of dependent technology, domination of the market due to their ownership-specific advantages which succeed to change values of the host people are some among reasons given by the other group. It is on the basis of these extreme views that related literatures are drawn. In this regard the views of the favoured group will be first considered.

Madden (1977) in his thought encouraged the looming and influx of MNCs due to the fact that they encourage development among societies.

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According to his view the proliferation of the MNCs is of great help hence they enhance the volume of trade, assist the aggregation of investment capital that is lacking in most places, which can aid development, finance loans and service debt, bring about free trade and removal of barriers to trade in order to integrate societies that benefit all, carry out researches that allow technological innovation and diffuse it for the help of all societies. They also promote production of quality goods through the principle of comparative advantage and training of workers.

The idea presented by the above scholar is so brilliant to some extent but the worry remains how the proliferation of MNCs would cushion development after higher repatriation goes on at the end of the process. A study conducted in Latin America in respect to America’s MNCs based in Latin America between 1965 – 1968 revealed that for every dollar of the net profit earned by a global corporation subsidiary, 52 cents left the country; even though 78% of the investment funds used to generate the dollar of the profit came from local sources (Vernon, 1977). In respect to innovation and diffusion of technology to benefit local companies is another worry. If this is really true, the presence of MTN with its technological outfits would have aided M-Tel to be on the right track but with the presence of MTN in Nigeria, M-Tel is no longer to be found in service provision. So with these, the view is doubtful and challenged as far as these examples are concerned.

Contributing in line with the above scholar, Cohen and Daniel (1981) stated that MNCs are vehicles of most advanced technology. For this, they provide scarce capital and technological know-how; provide commodities at a cheaper rate for the people. They also transfer and diffuse modern technology from advance countries to less develop for the take off of development. In addition due to absence of industries, the present of multinational corporations in the third world increases employment to solve the problem of unemployment in the third world.

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The above view has actually failed to consider the motive for the emergence of multinationals and the historical components of the underdevelopment in the third world. The claim of technology transfer is not possible because the local people are hardly aware of the foreign technology because of the secrecy. For instance our interaction with staff from coca-cola and Guinness Brewery revealed that Nigerians working in those plants knows nothing about the production formula. In this regard the stationing of foreign technology in the host is meant for the purpose of doing business for profit making. In fact the technology is dependent and is a cost factor for doing business. If not being so, the transfer of technology by MTN would have revamped M-Tel from collapse. So the technology is meant for them but not for the purpose of the host. If not so, is the number of MNCs not enough in Africa to solve her problem of low technology base of the continent?

Gustar Rains (1971) arguing similar with the above scholars looks at MNCs as being so instrumental to development as it concerns the maturation of the indigenous entrepreneurial and management capacities of less developed countries (LDC) and increases scope for a functional symbolic association between foreign and domestic capital as well as talents. Complementing this view Moran (1977) argues that over time LDC acquire skills in bargaining with, and controlling MNCs as well as developing the technical and managerial skills to run the industry. He used Chile’s copper firm where Chileans increased their shares or profit over time and he postulated that this came from:

moving up a learning curve of negotiation; operation; and supervisory skills…that lead from monitoring industry behaviour to replicating complicated corporate functions

.This means that Chilean government increased the share of profits

from the middle managers and engineers arose, who performed most of the day-to-day operations, and the company did not displace local business, rather instill fresh life into the industry that was unable to exploit

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profitably the lower quality ore left over from the earlier ventures which had concentrated on mining the high quality in vein.

However, he noted that the political ruling elite gradually move away from being uncritical supporters of the copper MNCs have adopted a more nationalistic attitude. There was nationalization of the firms and an increment of taxes. With this we think that there was something wrong somewhere which necessitated indigenous ownership.

Kay (1982) further maintains as a support of MNCs that, the import of technology has positive effects on the developing world especially with regards to economic development. He eluded this point to the mass industrialization taking place in specific developing countries. Elaborating this point he used US MNCs on what they do in the developing countries. They speed up the process of industrialization through a rapid diffusion of production and managerial technology. Also the presence of MNCs brings the world closer, where productive technology would be equally made available to all countries. It is quite acceptable that MNCs integrate societies in the world more closely but not for the purpose of every society integrated in the process. This is why we look to it that, the integration of Africa into world capitalist system from slavery, colonial and post imperial eras were and are only beneficial to the programmer. We quiet agree with the position that capital, technology and the market in third world is lacking and narrow, but we think empirically the process of integration is the historical root to the explanation of the perplex nature of the continent. In fact, the influx of MNCs today in Africa especially is the replication of domination of the past decades in the new era.

Regarding the above arguments marshaled by the group who are pro-MNCs proliferation, other group as mentioned before has taken contrast views about the phenomenon. Vernon (1978) has taken us back to the evolution of MNCs. He noted that MNCs have passed through various stages that can be summarized as the era of tight controls in which international trade was prohibited by governments. However, World

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War I and II broke the barriers through improvement in transportation and introduction of Eurodollar. The final stage that gave strength to MNCs was the era of reorganization of the common and control mechanism signaling the elevation absorption of the business done abroad into the mainstream of corporate strategy (liberal ideas) or the obliteration of the invidious distinction inside the corporation between and foreign business.

Apter (1971) showcases in line with the above view concerning various stages characterizing the evolution of the MNCs. These stages pass from charter stage to the cartel stage through the tertiary stage of capitalism that gave rise to the MNCs. He analyzes the various ways through which the MNCs are a modernizing influence among nations, detailing this process through the primary to the intermediate and tertiary stages. His conclusion points out that at all the stages, MNC generates inequalities and instability.

In view of quite a number of examples already given we totally agree with the above that because of ownership specific advantages of MNCs, they create inequalities and instability. The line of Salvatore (1983) asserts that one of the most developments significant to international economic occurrences of the postwar period is the proliferation of MNCs. These are firms that own, or manage production facilities in several countries. They account for over 20% of world output, and intra-firm trade, which is trade among the parent firm and its foreign affiliates, is more than25% of the world trade in manufacture. In the process, the parent firm usually provides its foreign affiliates with managerial expertise, technology, parts, and a marketing organization in return for some of the affiliates’ output and earning. From this stand point it means therefore that the host country has nothing to decide on the running of the company since all it takes for its running is sent from the parent base. If this is so, therefore the way MTN is run in Nigeria is determined by policies from South Africa where an MTN headquarter is based.

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Relating to the reasons for the existence of MNCs, the writer offered that the basic reason for the existence of MNCs is the comparative advantage of global network of production and distribution. To him this arises in part from vertical integration, most MNCs can ensure their supply of foreign raw materials and intermediate products and circumvent (with more efficient intra-firm trade) the imperfection often founding foreign markets. They can also provide better distribution, and service returns. By Horizontal integration through foreign affiliates, MNCs can better project and exploit their monopoly power, adapt their products to local conditions and tasks and ensure consistent production quality for their own advantage.

Another reason he gave was competitive advantage of MNCs based on economics of scale in production, financing, research and development, and the gathering of market information. These allow them to carry division of labour and specialization in production much further than smaller national firms. MNCs with their affiliates have greater access to better terms of international capital markets than national firms. They also concentrate research and development in one or a few advanced nations’ best suited for these purpose because of a greater availability of technical personnel and facilities. With these, they are able to funnel information around the world to the parent firm; placing it in a better position than national based firms to evaluate, anticipate, and take advantage of changes in comparative cost, consumers’ tastes, and market conditions generally.

Apart from the above the scholar adds that MNCs shop around for the low-wages nation that offer the most incentives inform of the tax holidays, subsidies and other tax and trade benefits. This is seen from a good example in Nigeria and MNCs in the telecom industry where they (MTN) were given tax waiver of 5 years that account for 1.7 billion dollars that encouraged them to stay in our economy (Tribune, 2008). They can buy up promising national firms to avoid competition and are much better

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than local firms to engage in acts that will increase their profits. This is why MTN is engaging in business such as internet provision through GPRS and fast link, who wants to be a millionaire, league sponsorship and many others which M-Tel cannot sponsor.

Increasingly, MNCs artificially over price components shipped to an affiliate in a higher tax nation and under price products shipped from the affiliate in the low tax nation these with the intention of minimizing its tax bill. In other words, they over invoice imports and under invoice export which is technically called “transfer pricing”. This argument has given us clear picture of MNCs to host. In addition it has been able to cut across most of the theories reviewed that seek to explain the nature, goal and character of Multinational Corporation. In fact we totally agree with the argument that MNCs control quality and quantity of production in the host especially in the areas of low technology and less competition. In so far as they control the technology, capital and managerial skills, the local firms are total out placed and local technology is also displaced through corporate strategies. This is why they invest in places where quick and huge profit could be made. Today the number of MTN subscribes in Nigeria is 35.7% of 57 million subscribers of all networks in Nigeria (allafrica.com). The billing is higher in Nigeria than South Africa with only 9 million subscribers as of end of 2008 (Ibid). How can these kinds of acts bring development in Nigeria?

Similarly, Ake (1983) and Nnoli (1985) have presented their argument that the development of Europe and an alexia situation in the continent combined in a single system that of capitalist imperialism. The capitalist logic of expansion as an aftermath of the internal logic of their competitive system to seek profit abroad in less developed countries is the logic of underdevelopment in the continent. This has found its way into postcolonial society virtually uninhabited through the increase of Foreign Direct investment (FDI). With this, there is growing dependence on the developed nations in all sectors of the economy inter-alia trade, finance,

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technology etc reflecting in the monocultural nature of the society. Apart from the structural disarticulation of the entire society, there are also monopolistic tendencies of European companies (MNCs) and monetary institutions (IMF, IBRD, Paris club etc). These have made the postcolonial society being expected to bring socio-economic and political emancipation of the people to be rather an extension of colonial exploitation through pillage by Foreign Direct Investment (FDI) and debt peonage. This assertion shows that the narrow economic base in Africa (Nigeria) is a historical event brought by the process of integration that gives one advantage over the other, which liberal economic theorists claimed to be a pathway for our development. To them MNCs are vehicles of underdevelopment and an extension of colonial motive in the post colonial time.

Spero (1981) consider multinationals to be firms with foreign affiliates where production and marketing are extended beyond the boundaries of one country. She notes that being larger firms, in 1976, each of the top 20 multinationals had sales in excess of $2 billion. The top 6 MNCs had sales well over $48 billion each, and the largest Exxon had sales in 1976 of over $48 billion and this is achieved through their oligopolistic characteristic. They dominate the markets because of their size, financial resources, control of technology, and possession of special differentiated products. They have important organizational characteristics in the host countries that are directly owned by the parent either through sole ownership or through joint venture with public or private groups.

Concerning decision making in the running of the MNCs she states that such is so centralized without the control of the host. Key decisions involving foreign activities; location of production facilities; distribution of markets; location of research and development facilities; and long-range planning tend to be made by the parent base. This means therefore that the government of Nigeria with a regulatory body Nigerian Communication

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Commission (NCC) does not have control over the issues identified by the scholar as far as MTN is concern. In final analysis she states that due to their vast size, centralized organization, integrated production and marketing are powerful resources which the firm can use to follow their international goals or policies not in consideration of the goals of the host area, even if it challenged the security of the host. This is seen from the worry of the House of Rep challenging the decision of Mr. Ernest Ndukwe, the Executive Vice chairman of the NCC for the tax waiver to MTN and other MNCs in telecoms that amounts to $1.7 billion (Tribune, 2008). This is also why the desire of the commission for charges on calls to stand at N20 is not a reality. The point we are trying to make is that due to the power of MNCs (MTN) the government with its agencies have no control over MNCs in Nigeria looking at the submission and good examples given.

Shapiro (1986) states along side the above other scholars that, the rise and evolution of MNCs was possible as raw materials seekers and market seekers. He opined that material seekers were the first MNCs and the market seekers were the latter. He adds that a new group has emerged in recent times regarded as cost minimiser. This is a fairly recent category of firms doing business internationally. These firms seek to invest in low-cost production sites overseas like Africa, Asia, and Latin America in order to remain cost competitive both at home and abroad. Wilmont (1979) testifies to this by saying that MNCs are the chief Western instrument of imperialism manifesting in post colonial era through super exploitation, under pricing, transfer, under-invoicing of exports and over-invoicing of imports and other practices that enable Western imperialism to perpetuate what might be termed as “pillage” of the third world countries resources.

Nwankwo (1981) followed other scholars in discrediting the presence of MNCs in third world (Nigeria). He points out that these firms are foreign based and due to their monopoly in all facts, they try to militate against all efforts in host countries towards achieving take off into sustained growth

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and development. They invest mostly in extraction, distribution and service more than production industries and the generated profits goes to the home base as such the production function conducted in the areas of investment is “fixed technical coefficient, which is capital intensive. With this, we think the growing number of multinationals in Nigeria’s economy has not changed the situation; rather the scenario is worsening every day. The acclaimed technology transfer to be found in the manufacturing sector is stupendous. Down is the picture of manufacturing performance from 1986 – 1991.

 Year Capacity Utilization % Share of GDP %1986 36.4 9.431987 40.9 9.661988 41.5 8.71989 41.6 8.11990 39.0 8.21991 39.8 8.3Source: (CBN (Various) cited in Umoren (2001).Looking at the table above, it is clear to say that the manufacturing

sector of economy which is supposed to be the linchpin to development is weak even with the alleged diffusion of Western Technology through MNCs to aid technological development. An average per day income of Nigerians is less than $1.00 (IMF, 2001). Infrastructural decay, low saving, hunger, disease and many others are serious indicators of underdevelopment that are abundantly found in Nigeria (Ochugudu, 2005).

Going by a critical look at the literature based on the two extreme views the research decided at this point to take side with the group that looks at MNCs as agent of underdevelopment based on the existing evidences. By and large, the research looks at multinational companies as agents of advanced capitalist system searching for raw materials and market in foreign lands for the development and survival of advance capitalist world that emerged during industrial revolution and sustained

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through expansion and exploitation of lesser developed parts of the world. 2.4.     Economic Development

Generally speaking, economic development is the major course of existence at all ages of human history. This euphoria has made production and material creation, distribution and exchange necessary in human interaction. Fundamental to this effect is that the ability of the society or state to meet up its demands is depending on its capacity to command nature to her advantage determines the level of her develop.pment. This is the same way of saying that, development is heavily dependent on the capacity of the state to provide her needs through production. Since societies have different history, endowments, human capacity and other requisites, they cannot be the same. This is why some countries are considered developed and some underdeveloped. So far as our concern is on economic development we will not waste time to explain reasons for this disparity, but look at different views on what constitutes economic development.

According to Ochugudu (2005) economic development is not the same as economic growth which means more than mere growth of the economy (in terms of increased output). It means the process of increasing real per capita income and engineering substantial positive transformations in the various sectors of the economy. The positive changes which take place to improve the general well being of the people and ensure sustained rise in the standard of living of the masses. With economic development, there are structural transformations in different sectors of the economy as well as general improvements in various areas of economic activities and in different areas of the country, leading to increase economic welfare of the citizens.

This scholar went ahead to stress the features of underdeveloped economy as:

Low per capita income.

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Low level of technology High level of illiteracy Low level of productivity of labour in agriculture and industry Primary forms of production contribute a greater percentage of the

GDP. High degree of unemployment and underemployment. Inequitable distribution of income. The rate of capital formation is slow. Infrastructural facilities are poorly developed. Quicker widespread of disease. Low saving High birth and high death rate.

A look at this argument brings together the concept of Multinational Corporation and economic development. A sparkle back on the extreme views shows that the pro-group looks at MNC’s presence is aim at ensuring economic development as the scholar look at it, while the other group see it from the other way round (underdevelopment). By and large, economic development involves positive change that seeks to improve the type and quality of life of the people. It is not just improvement in one sector, rather a sectoral revolution involving all with goal and ability of changing life standard to quality stage. A question is how does the presence of MTN change the economic turmoil in Nigeria?

Schumpeter (1934) contributes in this akin to of what development stand for. His argument was meant to distinguish economic development and growth. To him economic development means a discontinuous and spontaneous change in the stationary state which forever alters and displaces the equilibrium state previously existing; while growth is a gradual and steady change in the long run which comes about by a gradual increase in the state of savings and population. From his stand point, economic development means higher than growth because it implies changes in the composition of output and in the allocation of inputs by sectors. This is why

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Friedmann (1972) asserts that development is an innovation process leading to the structural transformation of social system.

Supporting the above Myrdal (1970) opines that growth and development are used by people inter exchangeable, however for its real application, economic growth is related to a quantitative sustained increase in the country’s per capita output or income accompanied by expansion in its labour force, consumption, capital and volume of trade. On the other hand, economic development is a wider concept than economic growth “it is taken to mean growth plus change” it is related to qualitative changes in economic wants, goods incentives, institutions, productivity and knowledge or the “upward movement of the entire social system”. This argument is empirical looking at what happened in Brazil some years ago where growth was 1000% but it does not trickle down to better the lives of the people, rather it has been hijacked by few people. Thus, economic development takes place only when quality of life of people is improved by the occurring change. This is why Jhingan (2005) has identified ways through which economic development can be measured.

According to him this measurement is done on four bases: Gross national Product (GNP); GNP Per Capita; Welfare; and Social Indicators. On the GNP, economic development is measured in terms of an increase in the economy’s real national income over a long period of time. The second way of measuring it is GNP per capita which relates to an increase in per capita real income or output. Meier defines economic development in this context “as the process whereby the real per capita income of a country increases over a long period of time-subject to stipulation that the number of people below an absolute poverty line does not increase, and that the distribution of income does not become more unequal”. The third tendency to measure economic development according to this scholar is welfare. This implies the process whereby there is an increase in the consumption of goods and services of individuals. In this regard Okun and Richardson have written that economic development is “as sustained, secular improvement in

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material well being, which we may consider to be reflected in an increasing flow of goods and services”. The last in this range is social indicators. Some are inputs such as nutritional standards or number of hospital beds or doctors per head of population. While others may be outputs corresponding to these inputs such as improvements in health in terms of infant mortality rates, sickness rates etc. Social indicators are often referred to as the basic human needs to the poor. The direct provision of such basic needs as health, education, food, water, sanitation and housing affects poverty in a shorter period and with fewer monetary resources than GNP/GNP per capita strategy which aims at increasing productivity and incomes of the poor automatically over the long run. The provision of these basic needs lead to a higher level of productivity and income through human development in the form of educated and healthy people.

From the foregone, economic development indicates the capacity of the state to have been able to provide good conditions of living of the people. This is why the wealth (income) of a nation determines the extent through which the welfare of the people is attended to. Without the provision of the basic needs identified by the write makes nothing to be considered as development. This enables Rodney (1972) to consider development as:

a many sided process. At the level of the individual it implies increase skill and capacity, greater freedom, creativity, self-discipline, responsibility and material well-being. 

One thing central to this view is the issue of the well being of people. At any time where the people’s well being is not attended to, such situation is not development. This enables Todaro cited by Ujo (1994) to have said that development is:

a multi-dimensional process involving the re-organization and reorientation of the entire economic and social system. This involves in addition changes to improvement of income and output, radical changes in

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institutional, social and administrative as well as in popular attitudes, customs and beliefs.

If development stands for this, it therefore means that it does not only mean income and output monumental change, but also sustainability such with hope of changing the quality of life and general orientation in the positive direction.

In view of the above, Seers (1969) as cited by Ujo (1994) observes that: 

The questions to ask a country’s development are therefore: what has been happening to poverty? What has been happening to unemployment and what has been happening to inequality? If all three of these have declined from high levels, then beyond doubt this has been a period development for the country concerned. If one or two of these central problems have been growing worse, especially if all three have, it would be strange to call the result development, even if per capita income doubled. 

This definition is important for the understanding of development because it is central in the improvement on the living condition of the individual. By implication, it means that the economy can grow without development. This has been why Todaro submits that the objectives of development are concerned with the following things:

-  Life substance-  Self-esteem or respect and-  Freedom.The above objectives as reiterated by Todaro about development

convinced our thought because development connotes improvement in the life cycle of the people. This is why the research consider development (economic) for not just being an increase in the GNP, GNP per capita but the ability of the GNP to increase welfare through the provisions of social services like hospital, education (Schools), water housing, electricity; roads

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and other social goods. It is in view of this that we attempt to find out if MTN is ensuring this in Nigeria through its foundation. 2.5. Theoretical Framework

In research like this, theoretical framework is fundamental because it serves as a guide. It gives the researcher the way to investigate and find out what was hiding. This also guides how facts and variables are arranged with the hope of achieving the objective set forward.

Due to the utility of this tool, this work adopts two theories for analysis of the role of multinational companies. This choice is sought from the fundamental basis of assumptions of those theories. The internationalization model and dependency theory will be combined for this study as analytical tools of investigation.

The internationalization model holds that a national company may suffer by producing at home to export in other parts of the world because of cost related factors: labour, transportation, raw materials and competition. In solving this, companies seek crossing borders to do business in places that are less competitive and business attractive. We quiet agree with this submission because the falling profits and the increased cost of production were the reasons that encouraged the internationalization of political and socio-economic domination in the colonial times. Internationalization is possible because of the ownership specific advantage (oligo-polistic status) possessed by the company over the local firm. That the ownership-specific advantage enjoyed by the company in relation to comparative advantage over the local companies, even though they are local (example MTN over M-Tel) is obvious with companies crossing borders. The local companies also suffer lack of control over consumption in their own country because of the oligo-polistic advantages enjoyed by MNCs.

Going by these assumptions, MTN a South African based company existing with more than 34 service providers, owned by USA shopped around the world and internationalized in Nigeria during the blowing wind of economic reform in 2001. This internationalization into Nigeria economy

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was based on less competitive nature of the market and attractiveness of the market with population of 120 million people as of 1999 census figures. In internationalizing into Nigeria in 2001, the teledensity has shot from 0.42 in 1999 to 40.7% in 2008 (The Nation 25 August, 2008). In this, MTN accounts for 35.70% of the growth teledensity. This means that they control almost half of the Telecommunications consumers in the country.

Following the above, dependency theory looks at the internationalization as the cause of the problem of the continent of Africa generally and Nigeria in particular. Advocates of this school are the likes of Dos Santos, Cardoso, Baldwin, Ake, Nnoli, Fanon, Gunder Frank, Amin, Ominbode, and many others. Marxist thinking about the capitalist world generally influenced the theorists.

This theory opines that the law of motion of the capitalist system forced it to expand and internationalized into the less develop areas. This expansion has been the process of development in few and under development of many. In view of this Baldwin (1980) wrote, “Development and underdevelopment constitute a system that generates economic wealth for few and poverty for many”, which Frank called this “The development of underdevelopment” (Frank, 1969). Their argument was also that there is only one functional integrated whole in which the underdeveloped periphery is necessarily exploited and prevented from developing by international capitalism. This has brought about backwardness and underdevelopment because the periphery is systematically exploited and prevented from developing by international capitalism with its outfits like multinational companies, financial and trade institutions.

This theory emerged in 1960 as a response to the import-substitution strategy because the result had been an increased mal distribution of income, domestic demand too weak to sustain continued industrialization, and ever-greater dependence on those multinational corporations of developed economies that took advantage of the strategy. They lost control over their domestic economies.

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The major components of dependency theory include analysis of: the nature and dynamic of the capitalist world system; the relationship or linkages between the advanced and less advanced, and the internal characteristics of the dependent countries themselves. In these issues, analyses of the theorists are placed into three: the exploitation theory, the doctrine of imperial neglect, and the concept of dependent development.

The exploitation position maintains that the third world is poor because it has been systematically exploited (Amin 1976). The theory offers that the core drain from the periphery of its economic surplus, transferring wealth from the less developed to developed world through trade and investments. This means that multinationals only drain the economies of the third world.

The imperial neglect holds that the expansion of World Capitalism through trade, investment, and European migration has created an International division that favours some lands and neglected others (Brown 1970).

The dependent development holds that the type of development claim to have been transferred is not meant to bring development because it does not lead to national independence. This is to say that the people are not part of the change and it does not effect change in their standard of living.

This theory concludes by saying that the problem of less developed countries is caused by the process of integration into the imperial capitalist circle, which has produced multiple evils as:

Over dependence upon raw materials export with fluctuating prices, this causes domestic economic instability (example present state of prices of crude oil in the world market)

Misdistribution of national income Manufacturing investment by MNCs and dependent industrialization,

which have the effect of creating a branch plant economy with high

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production cost, destroying local entrepreneurship and technological innovation, and bleeding the country as profits are repatriated;

Foreign firms that gain control of key industrial sectors and crowd out local firms in capital market.

Introduced inappropriate technology An international division of labour created between the high

technology of the core and low technology of the periphery. Prevention of autonomous or self-sustaining development based on

domestic’s technology and indigenous entrepreneurship. Distortion of the labour market because MNCs pay higher wages than

domestic employers and therefore causes waste and increase unemployment.

Finally, reliance on foreign capital, which generally encourages authoritarian type of governments that cooperate with and give foreign, companies the political stability they demand.In summary, these theories adopted as analytical tool for this work

have shown that companies do go international. The first theory considers this to be possible because of the cost factor problem and at the same time ownership specific advantage. It is on this standpoint that the dependency looks at the internationalization as the cause of the problem of the third world, and the only solution is autarky

CHAPTER THREE3.0 THE NATURE OF NIGERIA TELECOMMUNICATIONS, THE

REFORM PROCESS AND THE EVOLUTION OF MTN TELECOMS COMPANY IN NIGERIA’S ECONOMY.  

3.1 The Nature of Nigeria’s Telecommunications before the Reform.

It is generally believed and it is a fact that information is a critical social driver and enhancer to economic development. Consequently, it is assumed also that the quality and density of the dissemination of information through the telecommunications network and the intensity of

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the use of its services are the major indicators of social and economic development.

Following the above, Nigeria made serious effort during the sixties in meeting up this challenge through the Post and Communications Department where postal houses and telecoms houses were established for this purpose. This desire was more attended to when the Post and Telecommunications Department were separated. In view of this the postal authority was separated from the telecommunications institutions. This made it successful for the establishment of NITEL separate from the postal department, which was an amalgamation of two arms: the P & T and the Nigeria External Telecommunication (NET) (Information and National Orientation Ministry 2005).

The establishment and the separation were to make NITEL vibrant and to provide Nigerians access to information through easy communication. In this regard, the company attracted the subsidy of government between 1975 and 1999; of about N30 million to assist them provide the service needs of the people in information dissemination. However, until the time of its privatization, the national telecommunications carrier NITEL as a monopoly was characterized by inefficiency, poor service and very much unaffordable for the average Nigerians. For instance between the time of its creation till 1999, the national carrier had only 400,000 working lines constituting about 0.42% teledensity of the estimated population of 120 million in the 1999 census. This is another way of saying that until 1999 when the population of the country was estimated at about 120 million; the working lines were only 400,000. This means that in each 100 Nigerians only 0.42 had access to communication in the telecommunications sector. This inability we think was caused as a result of the nature of the society itself ranging from its total over dependence on equipment from developed countries. This affected the state of NITEL because the economic base of Nigeria was low and unable to provide to the company the desired equipment for proper

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operation. This point we are trying to make here is that the dependent nature of Nigerian state was responsible for this inability of NITEL to stand up to its goals.

The state of affairs in Nigeria economy generally turned to affect the company in the provision of the services to the people. It was the alexia state of NITEL and the perception of the critical role of the communications sector for economic development that NITEL was to be privatized during the reform process of Obasanjo’s government in 1999.

With the reformation and privatization of the sector, private telecommunications operators (foreign and local) emerged as providers of telecoms services in the country. With the growing number of service providers, the teledensity has grown beyond the days of NITEL. For instance in 2005 December, about 19,810,258 was the subscriber levels. In third quarter of last year, the subscriber level in the country stood at 57 million with more than 14 service providers both mobile and fixed (http://www.sidaw.com/telecomprovider.htm and allafrica.com). Out of the 57 million subscribers level in Nigeria MTN has 20 million subscribers representing 35.70% of the figure. The growth still persists with the issues of poor coverage, interconnectivity etc makes one fills how this can aid development. In this like the research argues that the internationalization of Foreign Service providers in Nigeria is encouraged by less competitiveness of Nigeria’s economy and availability of the large market. The internationalization of the MTN into Nigeria is also encouraged and influenced by her dependent nature which is reflected by the type and quality of services render by our institutions.  3.2.  The Reform of the Telecommunications Sector in 2000.

The reform of the telecommunication sector in 2000, which made MTN and Zain to internationalize into Nigeria, was motivated by the claim of the inability of government to continue to fund the public enterprises due to the dwindling resources. This situation is caused by the integration process within the capitalist economy that succeeded in establishing

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dependencies in the forced incorporated areas as explained by the dependency theory.

In the above regards, it was perceived that, for the sector to perform its goals in the economy of Nigeria by ensuring affordable access to service and infrastructure needed to improve operational efficiencies in all aspects/sectors of the economy it must be reformed. The search for the restructuring was through the platform of liberalization, deregulation and privatization where there was a shift from public sector led to private sector driven activities.

In regards to this thought, Obasanjo stated that:

Privatization permits government to concentrates on their functions and responsibilities, which enforcing the ‘rules of the game’ so that the market can work efficiently with provision of adequate securing and basic infrastructures, as well as ensuring access to key services like education, health, environmental protection. The objective is to assist in restructuring the public sector in a manner that will attracts a new synergy between a learner and more efficient government and a revitalized efficient and service oriented private sector (Hobson 2007).

This assertion is a complete liberal thought about a search for economic development. However, we think ensuring market discipline in Nigeria cannot be the route to our development, rather a route to our underdevelopment. In spite of this, he went ahead to say that: 

It is estimated that successive Nigerian governments have invested N800 billion in public owned ventures. Annual returns on these huge investments have been below 10%. These inefficiencies and, in many case high losses, are charged against the public treasury, with declining revenue and escalating social services, the general public has stepped up its yearning for state owned enterprises to become more efficient( Ibid).

The above conception was the linchpin through which the reform of the sector was promised. This we think was not the panacea to the impasse in the economy, but was influenced by the changing phases of

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capitalism that succeeds at every phase of expansion assign roles and duties to its peripheries with the hope of its growth and sustenance which weakens the autonomy of the peripheries. Due to this scenario, the telecoms sector alongside other sectors has become weak and incapable to provide requisite needs of their existence for Nigerians. It was in this regard that reformation of the entire sector became obvious to cushion development as the reform objectives consider. To this effect, the reform of the telecoms sector evolved from administrative, structural and operation changes since 1960 through three National Development Plans. The first major reform process was the separation of the Post and Telecom Departments in 1965 and the establishment of a public monopoly telecommunications company, Nigerian Telecommunications Limited (NITEL), an amalgamation of the telecommunication arms of the P & T and the Nigerian External Telecommunications (NET) (Ministry of Information and National Orientation Agency 2005).

A seminar on Telecoms sector restructuring in 1987 led to the first National telecoms policy, whose recommendation included:

Privatization of the public monopoly (NITEL) Deregulation/liberalization of the sector Establishment of the National Regulatory Authority in which Nigerian

Communications Commission was created in 1993.At the end of the day, there was partial deregulation of the sector to

correct the ineffectiveness associated with NITEL which between 1975 and 1999 attracted subsidy of over N30 million with poor tele density of 400,000 working line, one of the lowest telephone density rates in the world (ibid). To correct this, there was a review and amendment of the telecommunications law in 1998 and a review of the 1987 telecommunications policy which eventually led to the release of a new national Telecommunications Policy in 2000, which laid foundation for the modernization and expansion of the telecoms network and services.

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In 2001, competition in mobile telephones was introduced with the licensing of three digital mobile (GSM) operators. Each of the operators paid a bid price of $285 million through auction for a digital mobile license. The winners were MTN, ECONET (now Zain) and Nigerian Telecommunication Limited (NITEL) for its GSM subsidiary M-Tel. In 2002, Globacom Limited emerged as the second National carrier, which gave it the authority to operate GSM Network hitherto provided by NITEL, which was the only national carrier. 3.2.1.The Reform Process in the Sector.

In restructuring the sector, the government pursued a four-phased reform programme; namely

A new telecommunications policy Design a new legal and regulatory framework Restructuring of the sector (including promotion of a strong and

independent regulator). Privatization of NITEL

By February 2000, the National council of Privatization (NCP) inaugurated the Telecommunications Sector Reform Implementation Committee (TSRIC) to facilitate the restructuring of the telecommunications sector and privatization of NITEL. The terms of reference of TSRIC included the following:

Formulate sector proposals to create conditions for the reform, deregulation and suitable private sector led development of the sector.

Advise on related policies and programmes to promote competition, efficiency and transparency in the restructuring, deregulation and privatization within the sector.

Formulate proposals to attract private financing and investment in, and market-led growth of the sector.

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Advise on steps to be taken, while undertaking the reform of the sector, to improve the efficiency, quality, affordability and geographic spread of telecommunications services in Nigeria.

Oversee the activities of various government agencies, parastatals, operators and consultants to NCP in the communications sector leading to the restructuring and ultimate privatization of NITEL

Coordinate all sector activities of the Ministry, the regulator, Public Enterprises and Private Operators and brief the NCP on a regular basis, drawing attention to progress, constraints and proposed solutions.

Provide information briefs and guidance to all appointed consultants of the NCP on the execution of their assignment of the legal and regulatory reform, restructuring and privatization of NTEL.

Carry out other functions related to the reform, including proposals for the institutional and legislative strengthening of the NCC or other activities as may be assigned from time to time by the NCP.As soon as the TSRIC was inaugurated and in pursuit of the objective for which it was established, it outlined four principal approaches:

Policy review and formulation Legal and regulatory framework design Restructuring and liberalization of the sector Privatization of NITEL

In view of the above, an initial major step was taken by TSRIC in prioritizing the review and formulation of policy in line with the economic reform philosophy of the Federal Government of Nigeria which postulates that government should only legislate, regulate, impose and collect taxes rather than being an operator competing with her citizenry in the telecommunications sector.

After extensive consultation with stakeholders such as the ministry of communications, Nigerian Communications Commission, Nigeria Broadcasting Corporation, Private Telecommunications Operators, etc.

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The Telecommunications Policy was drafted and adopted by TSRIC and subsequently approved by the Federal Executive Council in September (Ministry of Information and National Orientation Agency, 2005). In adopting the telecoms policy, the objectives were clearly defined as thus:

Create enabling environment for cost effective telecoms services. Promote competition, deregulation and liberalization Provide flexible pro-active regulatory environment Autonomous sector specific regulator Encourages Nigeria’s participation in provision of telecommunication

service and manufacture of telecommunications equipment. Promote universal access Ensure high quality standards and consumer protection.

3.2.2. Legal and Regulatory Framework of the Reform.After the drafting of the telecommunications sector policy, putting in

place an appropriate regulatory framework was the next step in the four phase programmes towards the eventual privatization of NITEL. The designing of the legal and regulatory framework became a matter of serious concern because of the following:

The existing structure was quiet deficient and NITEL and its wholly owned subsidiary M-Tel were not adequately regulated.

he need to position the telecommunications industry to fulfill and respond, adequately, to the objectives of the telecommunication policy.

There was also the need to ensure that the telecommunication sector is responsive to future trends and changes, both locally and internationally.

Towards a swift and expedient transformation of the legal and regulatory framework, the TSRIC procured the services of. Arthur Adersen, a reputed world-class consultant to design a new framework. The terms of reference were:1. Review the existing laws and regulation in the telecoms sectors.

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2. Prepare an overview report on the legal and regulatory framework in the sector with comments on:

  Nigeria’s telecoms policy  The Nigerian Communications Commission Decree 1992. Public enterprises (privatization and commercialization) Act 1999. Other relevant Acts, Legislations, and Regulations with direct relevance to telecoms sector. Regulatory instruments such as orders, operation licenses, tariff fillings and interconnection agreements and existing procedure for policymaking, rule making licensing appeals, consumer affairs, etc.

3. Prepare a new legal framework for the Nigerian telecoms sector.4. Prepare a new law for the telecoms sector, which addresses the rights and responsibilities of the ministry, NCC and licensed operators.5. Provide support to the regulatory agency in drafting and finalizing the new licenses for NITEL, M-Tel and other regulatory instruments regarding:

   Numbering plan Spectrum management; and Internet serviceThe consultant’s deployed cross-country experience in over 30

nations and, using the telecoms policy as a foundation, developed a Bill. By late 2000, the consultant submitted the first draft of the bill to the steering committee and this draft was accepted and approved for public discussion by the President in Council on 20th, December 2000. The approved draft copies were distributed far and wide for public debate following inputs from Federal Agencies, State Governments, the National Assembly, the Judiciary, Trade Unions etc. the bill was revised, culminating in the production of a fifth draft which was debated and finalized at a National Workshop held on 3rd and 4th April, 2000 in Kaduna. Following the workshop, the approval of the bill was obtained from the workshop and was subsequently sent to the Federal Executive Council, which after due consideration passed it to the National Assembly in September 2001, for

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enactment into law. The bill was enacted and signed into law on 8 th July 2003 as the Nigerian communication Act 2003. The key elements of the bill include:

 Creation of a modern and independent regulator with sufficient power/competence to supervise and guide the sector. Establishment of a transparent licensing process, and an investor friendly license modification, renewal and revocation system.  Clear interconnection rules and regulations Putting in place level playing field by preventing anti-competitive conduct.  Creation of a non-discrimination tariff structure  Provision of efficient frequency management/monitoring  Provision of regulatory certainty (Ministry of information and National Orientation Agency, 2005 and Nigerian Communication Act 2003). It was these rigorous processes that set the stone for the

restructuring, liberalization of the telecoms sector towards eventual privatization of NITEL, the commitment of the Federal Government of Nigeria to effectively restructure the telecoms sector evident by:

 The emergence of a more assertive NCC in line with conscious government policy to all NEC greater autonomy.   NCC’s successful digital mobile license auction that brought about MTN, Econet (now Zain) and M-Tel   NITEL pre-privatization restructuring    Licensing of the second National Operator – globalcom by the fourth quarter of 2002.   And the licensing of the third generation operators that has made the number of both fixed and mobile operators to 14 in 2008 (allafrica.comm and the Nation 2008).In as much as the reform saw the importance of telecoms industry

as a catalyst for rapid economic growth and development through an

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increased access to telecoms services by a growing number of Nigerians, there are quiet numbers of challenges militating this thought. Some of these range from inability to ensure yet universal access coverage, high cost of telecoms services to especially low income Nigerians, anti competitive attitudes emerging from refusal interconnectivity request which Nigerian Communication Act 2003, section 101(1) states: “A network facilities provider and a network service provider shall provide access to their network facilities or network services to any other:

 Connection of equipmentPhysical infrastructure including building, ducts, and masts etc.  Access to software system, including operating support system.  Access to number to translation of systems offering equivalent functionality.  Access billing system  Access to unbundled network components, including local loops. Equal ease of customer access (e.g. customer dialing parity) Andzenge, 2005).In the above respect, (Andzenge, (2005) lists some of the existing

disputes on interconnectivity before the Nigerian communications commission:

Between NITEL and other PTOs. Between NITEL and newly licensed mobile operators Between Major mobile operators and other PTOs M-Tel interconnectivity with mobile operators through NITEL fixed

network as a M-Tel billing system incapable of capturing all call records.Other existing challenges still persisting are issues of limited

territorial coverage, concentrated mostly in selected urban centers, long waiting period for connection, call traffic congestion, poor quality of service unreliable, sub-standard service, poor equipment to aid telecoms performance, limited investment in the sector, drop calls etc. are some

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among other existing challenges persisting in the sector. All these we think cannot in no way have a linchpin to economic development which MTN as multinational claiming to bring in Nigeria through its investment. With this e think their motive in the economy is to invest and make profit as capitalist oriented outfit. However, we cannot go into detail into this yet, our findings in chapter four will have more in-depth discussion on this.3.3. Evolution of Mobile Telecommunications Network (MTN) Nigeria’s Economy.

Mobile Telecommunications Network (MTN) is a global cellular provider headquartered in South Africa which came into existence in 1994 and owned by corporate investors in Uganda, Cameroon, Rwanda, Nigeria, Ghana and other sub-Saharan African countries. In Nigeria, MTN became internationalized on 16, May 2001 following the globally launched Nigeria GSM auction conducted by Nigerian communications commission earlier in the year in view of the reform process of the Federal Government of Nigeria in 2000. Therefore, the company launched full commercial operations beginning with Lagos, Abuja and Port Harcourt with less than a million customers.

Before becoming part and parcel of the telecommunications family in Nigeria as the reform required, it made a payment bid auction of $285 million as one of the four GSM licenses in Nigeria in January 2001 which has given it the legal right to render service in Nigeria. This has made the company to make an investment that is worth $1.8 billion in building mobile telecommunications infrastructure to aid both fixed, mobile and internet services (http://www.mtnonline.com/).

Since it is launch in August 201, MTN has steadily deployed its services across Nigeria. It has now provides services in 223 cities and towns more than 10,000 villages and communities and a growing number of highways across the country, spanning the 36 states of Nigeria including Abuja. More of these villages communications for the first time

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ever since the teledensity was low in the country before its emergence (http://www.allafrica.com/) .

During the time NITEL was the sole provider of telecoms services in the country, the teledensity was low standing at 0.42% as of 1999 calculated on the basis of 1999 census figure of 120 million. With the company’s digital microwave backbone “the 3,400 klilometre Y’elloBahn” commissioned by Obasanjo in January 2003, as a reputed most extensive digital microwave transmission infrastructure that revamped the sector, the number of working lines (400,000) in 1999 has shot to 57 million in 2008 (allafrica.com). With the backbone Y’elloBahn, the quality quantity and density of calls on MTN network has improved, enabling it to expand its numbering range with 0806, 0703, thus, making it the first GSM network in Nigeria to have adopted an additional numbering system, having exhausted its initial subscriber numbering range of 0803.3.3.1. Subscriber Base.

The overriding mission of the reformation of the telecoms sector was to make it possible to be the catalyst for Nigeria’s economic growth and development, helping to unleash Nigeria’s strong developmental potential not only through the provision of world class communications, but also through innovative and sustainable corporate social responsibility initiatives.

Following this, in the last four years, the Nigerian telecoms industry has experienced tremendous growth. There has been a rise from 400,000 working lines in 1999 to 57 million in 2008. With MTN having 20 million subscribers, representing 35.70% of the subscriber levels in the mix of more than 14 service providers in Nigeria’s telecoms sector (allafrica.com).

In ensuring the availability of telecoms services in the country, MTN with its slogan “Everywhere you go” provides quiet a number of products and services which some are to aid quality of calls, create friendly environment for both MTN and customers and at the same time provide

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access to some information in the internet world according to MTN. down are the products and services of MTN:

MTN loaded - MTN Treasure Hunt MTN downloaded - Voicemail Music carriers - E recharge Conference call - Caller Tunez Settings - Welcome back Share sell - Directory enquiry Migration - WAP service SMS - Roaming Connect life - Family and Friends MTN enterprise solution - Midnight calls MTN 3.5G - Black Berry from MTN Extra connect - Extra special Extra cool - Extra promo

All the above products and services are the areas through which MTN Nigeria has been able to secure 20 million subscribers as of September 4th 2008 as against 9 million in South Africa (allafrica.com). A statement from the Company in this regard said that the growth of the subscriber base of the Company in Africa has increased from 80,750,000 million on September 30th 2008, a 9% increase from the 74,088,000 million in June 2007. Accordingly, a statement from the MTN international managing director, Lazarus Tim said, the West African Region increases its subscriber base by 10% while Nigeria contributed 56% of this increase (Daily Trust 4th November 2008). This shows that with MTN, the telecommunications base of Nigeria has increased. Taking a look at the number of working lines in 1999, which were 400,000 with the teledensity of 0.42% while the figure has plummeted up to 57 million with the teledensity of 42.50% in 2008.3.3.2 Tariffs/Rates.

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With the introduction of the GSM technology in providing services, consumers were attracted by availability of the phones and convenience of mobility. This meant that subscribers could carry these phones anywhere, make and receive calls.

To be registered as MTN subscriber, one is expected to buy the MTN SIM card, activate and get started. In this regard however MTN offers expensive billing calls from both MTN to MTN and other networks and SMS rates to communicate with family and friends everyday of the week. It is based on our understanding according to the MTN that due to the peculiar communication needs of our customers that we offer plans to suit these needs (MTN manual). From the young and trendy or family oriented individuals to professionals and high flyers, MTN has both pre and post paid plans, which the researcher think is not mainly for the needs of the customers, rather for the strategic needs of the market and profit making which are the core reasons for her investment.

During the time of its first commercial operations in Nigeria, the cost the SIM card was between N25, 000 to N19, 000 which is now sold at N250 and the billing rate of N50 per minute. As off then, that is from 2001 to 2005, per minute billing plan was not her option. This is to say that even if one makes a call of not up to one minute as the case may be , he has to be charged N50 flat. This kind of operation was exploitative in the sense that consumers were paying for what they were not consuming. This continued until the emergence of the second national carrier “Globacom” through its introduction of per second billing plan forced MTN to have adopted the new policy occasioned by the directives of the NCC (NCC).

Today calls on MTN to MTN are charged between N19.80 to N25.80 at off peak times customers on extra connect, between N28.20 to N31.80 to both off and peak of period for subscribers under extra cool. Calls to other networks are charged at N42.00 flat. Down is the summary of the MTN prepaid billing plans.

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Table 3.1.Packages Off peak Peak hours Other networks

Extra cool 43k(N25.80 per min) 53k (N31.80per min) 70k(N42 per min)

Extra connect 42k(N25.20 per min) 50k (N30 per min) 70k(N42 per min)

Extra profit 33k(N19.80 per min) 47k (N28.20 per min) 67k(40 per min)

Extra special 33k(N19.80 per min) 33k (N19. 80 per min) 67k(40 per min)

Extra promo 33k(N19.80 per min) 42k (N25.20 per min) 67k(40 per min)

To be on the extra special for instance one is expected to pay an access fee of N3000.00 that enables the subscriber enjoys the package for 30 days. To get connected you are expected to simply text 730 to 131 which you will be migrated.

Apart from the prepaid billing plans, MTN also offers a postpaid billing plans to packages like extra smart, extra value, MTN messenger, MTN EK, MTN beef con and toll free line. For instance the extra smart package expects the subscriber to make a monthly payment of either N3000, N5000, 10,000 depending on his or her desire. Calls under this plan are charged at 35 kobo and 42 kobo to other networks. Similarly calls made from 12.30am to 4.30am are charged 10 kobo per second while SMS is charged for N5 within MTN and N12 to other networks. To get connected under this package is through the MTN connecting store or buying a recharge card using the IVR (www.mtnonline.com).

The extra value is also a postpaid plan which the MTN offers where billing rate of 27 kobo is charged. In line to this a monthly access fee of N1500 is required. SMS is charged N5 within MTN and N12 to other networks, will calls 35 kobo and 42 kobo respectively. To access this plan N5000 security deposit which enables her enjoys GPRS monthly capacity of 500kbs. In addition EK is free web management base that enables MTN customers view and download their account status and bills online. One views this plan only by completing an EK registration form and submitting it to any of the MTN centers or connecting store to enjoy the plan (MTN

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call center). In the same vein the black berry is one of the MTN package. This is a communication solution that keeps mobile professionals connected to their customers, colleagues and internal data. The black berry smart support e-mail, mobile telephoning web browsing and business application to MTN customers while on the move. This is aided by the use of the MTN 3.5G which help in delivering video telephoning, mobile broad band and MTN portal service.

The latest of the MTN services is the MTN FAST LINK DATA MODERN which offers her customers with computer the easiest, fastest and most convenient way to access the internet at home, in the office or on the move everywhere within MTN data service coverage. To get started, insert your MTN SIM card into the MTN fast link data modern and get it connected to your computer where you will be connected to the internet at high speed everywhere have MTN 3.5G coverage. Down is the summary tables of both pre and post paid tariffs and rates of MTN fast link modern.

Table 3.2

Prepaid data options Cost per month Activation codes Inclusive data/monthly usage

30 days night plan (10pm-5am) N2,500 102 3GB

Daily pan 24 hours (daily) N5000 103 50MB

Pay as you use 15 kobo per kilobyte default

rate. No migration code

required.

Text all respective activation codes to 131.

Table 3.3

Postpaid data option Price for new activation Price for existing Inclusive data

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3o days all hours 24/7 monthly

(voice plus data

N11, 500 N11, 500 3GB

30 days all hours 24/7 monthly

(data only)

N10, 000 N10, 000 3GB

30 days night plan (10pm-5am)

data only

N2, 500 N2,500 50MB

Source: MTN Fast Link Modern.

In ensuring the patronage of its products and services, MTN has en massed N 1.8 billion in 2009 to expand their horizon of investment (www.bus.rep.co.za/index.php). This expansion enables for the expression of a total oligopolistic zeal with the intention of taking control of Nigeria’s telecoms market. This is possible with its leadership and the bureaucatisation of the company. It is in view of this that the goal of its profit making is ensured in Nigeria.

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CHAPTER FOUR4.0 AN ASSESSMENT OF CONTRIBUTIONS OF MTN TO SOCIO-

ECONOMIC DEVELOPMENT OF NIGERIA 4.1 Data Presentation and Analysis

In this chapter, the data for this study has been presented for analysis based on the earlier stated propositions. The answers or responses given to these various questions has been expressed and quantified in percentages, which have been used in testing the set propositions.

In attending to the target of investigating what might be the impact of MTN teledensity on socio-economic development of Nigeria, 200 questionnaires were administered to MTN subscribers in Makurdi town and all collected to ascertain their views on the subject matter. Below is the summary of the responses toward the questions set in testing the validity and reliability of the propositions. These responses are expressed and quantified in a simple percentage asN x 100, 200Where N = number of responses200 = the total number of questionnaire

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Table 4.1: Distribution and collection of questionnaire

No. Question No. Issued No. Returned

Yes No Total

6 Do you think that the relationship between MTN and Nigerian government can bring economic development?

200 200 8040%

12060% 100%

8 Does the regulatory body in the telecoms sector have control over activities of service providers especially MTN?

200 200 9045%

11055% 100%

10 Do you think that the presence of MTN in the telecom sector has increased the teledensity (number of people access to telecoms per 100) in Nigeria?

200 200 19296%

84% 100%

11 If yes, does it have a corresponding effect to your welfare and standard of living?

200 200 7839%

12261% 100%

13 Are you satisfied with the quality of services provided by MTN to you as a customer and the billing rate to your package?

200 200 000%

200100% 100%

16 Do you think that the presence of MTN in Nigeria is only meant for market (profit)?

200 200 17989.5%

2110.5% 100%

17 If yes, do you think the profit made is repatriated out of Nigeria?

200 200 18190.5%

199.5%

100%

20 With the presence of MTN and their advanced technology do you think can assist the performance of local companies in their service delivery ?

200 200 9145.5%

11154.5s% 100%

Source: Field Work 2009

Apart from the yes or no based questions, the questionnaire contains opinion-based questions in which respondents gave different answers. Down is the summary of the opinions.

Table 4.2: Opinion Base Answers

No. Question Issue Number of 0% Total

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frequency

7 In what areas do you think MTN has assisted in bringing economic development in Nigeria?

A. EmploymentB. TransportationC. HousingD. HealthE. EducationF. Communication

351051535100

17.5%5.0%2.5%7.5%17.5%50.0%

100%

9. Suggest what will happen if yes or no is the option to question 8

A. Submissive to Nigerian telecoms laws

B. Suppress telecoms laws

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113

43.5$

56.5% 100%12 If yes is given is to

question 11, in what ways?

A. Reduce cost of transportation and accident on our roads

B. Business performance150

50

75%

25% 100%

14. If No, what are those things that make you not to be satisfied?

A. Poor serviceB. Poor CoverageC. Interconnectivity problemD. High billingE. Drop callsF. Lack of Uniformity billing to

their packages

200200

200200200

200

100%100%

100%100%100%

100%

100%

. What do you think are the solutions to issue raised in 14.

A. Introduce uniform tariff (N20.00).

B. Improve on their servicesC. Give incentives to customersD. Raise BSS in rural areas.E. Ensure provision of good

services as against developed countries.

50

100

20

16

14

25%

50%

10%

8%

7%

100%

18. If yes, is answer to16, suggest the impact you think it has on the Nigeria economy.

It will reduce investible capital in the country.

120 60% 60%

21. If yes, how do you think this will

A. Increase coverage and level of

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assist the performance of the local companies in the telecoms service provisions.

communications.B. InterconnectivityC. CompetitionD. Innovation and creativity in

the sector

23

30

36

11.5%

15%

18%

48%

22 If No, what do you think will transcend between the MTN and the Local companies (NITEL and Globacom)?

A. Domination due to advanced technology owned by MTN.

B. Discouraging the growth of local companies in the sector.

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93

53.5%

46.5%100%

23 Suggest solutions to the issues raised in 22.

A. Defining proper relationship between foreign and local companies.

B. Ensuring that the local companies controls the telecoms market in Nigeria

93

78

46.5%

39%

46.5%

85.5%

Source: Field Work 2009.

The above data were drawn from 200 respondents with a view of ascertaining to what extent; MTN through its investment in Nigeria brings about economic development. To this end, data will be analysed in respect of the stated propositions.Proposition One: That the relationship between MTN and Nigeria is not possible to bring development because of their market zeal.

In view of testing the validity of this proposition, five questions were raised in this regard as Table 4.3 shows the result.

Table 4.3

No. Question No. of Respondents

Yes No Yes % No % Total

6 Do you think that the relationship between the MTN and Nigerian government can bring economic development?

200 80 120 40% 60% 100%

7 In what areas do you think MTN Employment Frequency % Total

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has assisted in bringing economic development in Nigeria?

TransportationHousingHealthEducationCommunication

351051535100

17.5%5.0%2.5%7.5%17.5%50%

1000%

8. Is the regulatory body in the telecoms sector has control over activities of services providers especially MTN?

200 90 110 45% 55% 100%

9 Suggest what will happen if yes or no is the option to question 8.

A. Submissive to Nigerian telecoms laws

B. Suppress telecoms laws87

113

43.5%

56.5%100%

13 Are you satisfied with the quality of services provided by MTN to you as a customer and the billing rate to your package?

200 0 200 00% 100% 100%

Source: field Work 2009.

The above table indicates that as the Federal Government in 1999 wishes to bring about economic development through Foreign Direct Investment (FDI) that brought MTN is impossible based on the above result. In respect to this, 60% of the two hundred responses represent a negative dimension to the initiative. According to the findings 60% representing 120 respondents submitted that the presence of MTN in Nigeria couldn’t bring about development but dependency and underdevelopment.

The above submission is proven by responses in question 13 of table 4.3 where 200 respondents representing 100% attest to the fact that the quality of services provided by the MTN is not satisfactory. Similarly, question 14 of table 4.2 exposes issues in regards to question 13 as poor service, poor coverage, interconnectivity problem, high billing, drop calls, lack of uniformity billing to their packages and so many lapses are inhabiting performance in the telecoms sector and universal access coverage are associated with MTN. Looking at these issues raised by question 14, it is quiet unfortunate to consider the teledensity to bring about development, instead of MTN ensuring good quality of services, affordable tariff and other measures that can ensure quality telecoms services the opposite is the case. It was discovered that the subscriber base in Nigeria increases as quality dwindles. This is an indication that the quality services is not the concern of MTN.

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Apart from the above raised issues, respondents through question 8 asserted that the Nigeria’s telecoms regulatory body (NCC) has no total control over the MTN. 55%, representing 110 respondents out of 200 gave their views in this direction. In this ends Salvatore (1983) in his argument asserts that the proliferation of MNCs in world affairs is one of the developments of the post world war era, which accounts for more than 25% of world trade. This trade according to him is between parent firms and its foreign affiliates, where the parent firms usually provides its foreign affiliates with managerial expertise, technology, parts, marketing organization, investment and policies for its running, which is conditioned by the reason of strategic nature of MNCs over comparative advantage of global network of production and distribution. Going by this assertion how can such regulators have total control over a firm whose policies are determined from other country? As capitalism is cardinal about profit making, any regulation in the place of its investment that thwarts this goal such investment will not be possible as it challenge profit-making goal. The point hers is that, since issues of management, technology, marketing organization and the total policies on its running are determined externally, NCC will have little to say about the running of MTN despite operating in Nigeria. To some extent this shows logically how Nigeria has little to determines how much profit earned by the MTN to be reinvested back to our economy.

The above has made Aremu (1997) to identify two areas that the host state should take seriously in considering the permission of any FDI. These include screening and monitoring respectively. These areas are sub divided into pre-application, application stage, evaluation stage, and implementation stage and monitoring. According to him monitoring stage is the most critical aspect that if taken seriously would benefit the host. However, he makes it known that the monitoring of these outfits is poorly conducted in Nigeria. Apart from the Central Bank of Nigeria’s Annual FDI survey, for the purpose of balance of payment compilation, limited efforts

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are put in place in this effect. The question to this kind of situation is how you can ensure the adherence to the proper conditions of investment if proper monitoring is not carried out. This situation spills to the telecoms sector such that the goal of the sector to bringing universal access coverage, affordable calls, quality calls and friendly competing environment has been identified by Communications week as the challenges of the sector (Communication week, September 21, 2008).

According to Ndukwe the executive Vice Chairman of NCC, noted at the communications week that the growth in the sector had thrown up new challenges including lack of adherence to the telecoms regulations. For instance, Section 38 (2) of the Nigerian communications; Act 2003, makes it mandatory for all operators to comply with their license terms as well as subsidiary legislation. This law requires among other things as: “promptly declare information on statistical data, technical roll out plans, equipment types, interconnection agreements payment and renewal of regulatory fees”.

However, it was noted by the executive vice chairman NCC that many operators breached the statutory and regulatory requirements, thereby stifling consumer satisfaction. According to him “so often these failures of the operators hamper the work of the commission to deliver to its various stake holders in Nigeria. And the commission spent a lot of productive manpower in following up with licenses, to ensure compliance which is yet difficult to be realised”. This shows clearly that NCC has no total control over telecoms service providers in Nigeria. This situation of lack of control is what the research considers as “Mirage of appendages” ensured through internationalization process that laid the ground for dependences of all strands in the peripheries. In view of this however, the mission of the NCC is to regulate the supply of telecoms services and facilities; to promote fair competition; to set performance standards for telephone services; as well as to encourage the development of other

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sectors of the economy through the development of the telephone industry. Thus the decree sets forth the functions of NCC as follow:

Economic and technical regulation of the privatizedportions of the telecommunications sector;

Determine the standard for safety and quality of telecommunications services;

Regulation of the telecommunications services; provide advice and assistance to the entire industry; facilitate entry into market for services; promote competition within the telecoms industry; protect the public interest; protect customers from unfair practices; developed performance standards and indices regarding the quality

of telecoms services; issues telecoms licenses; and monitors holders of licenses (NCC decree 1993).

In spite these, the regulator mal function due to the thwarting of telecom laws by operators including MTN. This is why she does everything possible to thwart the communications laws in Nigeria for the purpose of profits making.

It has been stated somewhere in this work that according to MTN,

the

Overriding mission is to be a catalyst for Nigeria’s economic growth and development, helping to unleash Nigeria’s strong developmental potential not only through the provision of world class communication but also through innovative and sustainable corporate social responsibility initiatives. As intended by MTN through its foundation, economic empowerment

is a designed empowerment programme by providing people affordable capital, appropriate technology, and capacity building resources they need to lift themselves out of poverty. Accordingly MTN provides this

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opportunity through micro-finance to help people reap the rewards of their labour. To this effect, the Rural Telephone Project (RTP) was designed as a micro-finance scheme referred to as “phone ladies” where money was lend to women through micro finance institutions (MFIs), (www.mtnfoundation.com).According to the foundation, the objectives of the programme were:

wealth creation for the ‘phone ladies’. The phone ladies average income was N17, 000/monthly.

Increase in social status of the phone ladies. Enhanced productivity in the community due to access to

telecommunications services.The project called the Akede Project was launched in Ilorin, Kwara

State in June 2004, with a total number of 30 women involved in the project. This involves the training and equipping rural women with equipment need for them to start a call centre in their communities. These equipment included handsets, simpacks, airtime, promotional materials (umbrellas, Banners, wind vanes, T-shirts and face caps), antennas and battery packs.

The total cost of the equipment and airtime provided is converted into a loan given to the women through a MFI. Today the Rural Telephone project has 100 phone ladies in over 20 communities. The project currently runs in the following states Enugu, Akwa Ibrom, Edo and Kwara State. The project is looking ahead in phase II where 200 women in 70 communities, will benefit from this project. Over the next 5 years the project will be extended to over 3000 beneficiaries all over Nigeria (www.mtnfoudnation.com).

Apart from a miserable economic empowerment scheme designed by the MTN, housing was considered as the other area of social responsibility in ensuring good habitat. In this regards, Rural Housing Project (RHP) was initiated. This project is a four years project, which involves the construction of 600 low cost housing units in all geopolitical

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states of Nigeria. Through volunteer labour and founding from MTN foundation, a simple and decent house will be built with the help of the homeowner’s family. The houses are sold to the families at non-profit according to MTN foundation. The sale of the house is financed with an affordable, no interest loan. The home ownership’s monthly mortgage payments are used to build more habitat houses.

Cost of house is about N400, 000. The homeowner will have 7 – 10 years to pay this back. Repayments are tied to the price of cement, as homeowner will repay about 2 bags of cement a month. The total cost of the project over the four-year period is about N600 million. The first phase of the project was completed in 2008 in Nasarawa state where 100 housing units were built with the hope of ensuring good accommodation in Nigeria (www.mtnfoundation.com).

MTN also identified education sector as another area it can span it social responsibility in ensuring its development in Nigeria. According to MTN foundation in this regards, it has committed to investing in education such that the various levels; primary, secondary and tertiary are positively affected. The objectives are:

To empower through the provision of information and technology resources.

To enable skills acquisition, transfer and development. To raise national literacy levels To provide educational resources for effective learning To enhance educational infrastructure development

In view of the above objectives, MTN foundation initiated Schools Connect Project (MSC) with the hope of using ICT to enhance teaching and learning in secondary schools in Nigeria. In the first two phases, the foundation provided fully operational computer laboratories with 21 personnel computers, VSAT interconnectivity and hand-on teacher training in 24 secondary schools in Kaduna, Lagos, Enugu, Kwara, Rivers State and

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Abuja. In all, more than 49,524 pupils and 2,412 teachers have benefited from the ICT facilities and training provided by the foundation.

The third phase was completed in 2006 in states like Ogun, Bauchi; Cross-Rivers. Thus, they connected 37 schools in the country with a total of 85,610 students and 3,817 teachers as beneficiaties. This initiative is financed by the foundation and manaaged by schoolnet Nigeria, an ICT in Education NGOs.

Similar to the above effect is the universities connect. It was identified by the foundation that in today’s hi-tech digital world, the role of libraries has changed dramatically from the provision of physical books, to a network of information resources across the globe. The MTN foundation universities connect project provides a link to the world’s longest collection of digital resources from over 5,500 libraries and 300 publishers to assist university students and professors with research. This valuable resource according to them (MTN) will also be beneficial to government officials, the media, industry experts and researchers in other academic institutions.

The online research library is equipped with 125 network computers, servers, printers and photocopiers; internet connectivity for receipt and update of content for two years; a two year subscription to electronic resources through the Net Library Network, and a conducive study environment through spare renovation provision of adequate lighting, furniture and alternative power supply. The project, which is managed by Net Library Network, was taken off at UniLagos, ABU Zaria, Abuja, UNN and Ibadan.

Apart from the above the foundation carried out a beautification of the King’s College Lagos football pitch in partnership with Newton and David Floral Decorators to create an appealing environment for recreation and physical development of students in February 2007. The beautification was also intended to assist the college in generating revenue through renting of the pitch for events and supports the

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development of sport talents. Other measures also taken in this respect were MTNF – UNICEF child friendly school initiative, MTNF school bags and Exercise book are among some of the efforts taken by MTN Nigeria to assist the educational development in Nigeria. More detail of this will be seen from appendix B on MTN sponsored projects in Nigeria.iv. Health

It is believed generally that a disease-inflicted society cannot be a good place for investment since the life expectancy of the labourer may be short and patronage may be low. This has been the reason why the researcher thinks, the effort of MTN in this direction is to ensure healthy customers that will be all times patronising it’s products and services. To this end, MTNF in its initiative “partners Against AIDS in the Community” in partnership with Hope World Wide Nigeria et al to implement projects on awareness, prevention, voluntary counseling and testing (VCT) and prevention of mother-to-child transmission. This was aimed at reducing the spread of AIDS in Nigeria and managing the life span of AIDS patients. There was also provision of nutritional and psychosocial support to HIV/AIDS positive people registered in the MTNF PAAC support group. 60 members of the support group from Gombe, Sokoto, Delta and Kaduna States enjoyed viable businesses set up for them by MTNF. There was also provision of 12 HIV/AIDS information interactive touch screens in 2006 in Anambra State. At the end of the day, 538 members of the support group were provided with nutritional and psychosocial packages monthly. For instance, 30 members of the group undergone training in fashion designing, embroideries, soap and candle making in Gombe, Sokoto, Kogi; 10 in FCT undergone training in GSM repairs in 2007; 10 members of the support group in Anambra were trained and provided with equipments as call centre operators.

Also the MTNF in partnership with Sickle Cell Foundation of Nigeria assisted sickle cell clinics for the provision of preventive and curative healthcare services for suffers of the sickle cell disorder. To this effect,

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MTNF supported the two sickle cell clinics: Children’s hospital, Massey Street Lagos Island and Primary Health Centre, Amuwo Odofin with polymerase Chain Reaction Machine (PCRM) for DNA analysis and the training of 41 healthcare workers for counseling. The MTNF project CLEAN in partnership with NINAAFEH and MTNF project CARES are some of the effort in the health sector, details of all these is contained in Appendix B.

In considering these spheres in which MTN has made attempts in improving for the fact that they are not well attended to. For instance, economic empowerment scheme initiated by the MTN is market inclined strategy, poorly inclusive and concentrated with the hope of ensuring investment imperialism amongst women in the selected areas. The economic empowerment was only meant in training and equipping rural women to set up call centres in their areas. Why not other areas of investments considered under this scheme? Can everybody be successful in the call business? All these efforts were market strategy to expand the volume of subscribers in Nigeria an indirect manner and exploitative way as the initiative requires an insurance fee of N5, 000 at the rate of N125 weekly as well as saving at least N100weekly. Similarly, the issue of number counts against this initiative. If development involves improvement of the old existence to a new one, targeted and measured on welfare, social service provision and the greater opportunity to access those things at the time of needs in quantity and quality. How can the scheme said to aid development when only few women are able to access the loan and covering only four states out of 36 states in Nigeria.

The above defaults associated with the economic empowerment scheme spanned to education. Out of thousands of schools existing in Nigeria only few were selected to enjoy the MTN foundation school connect. To spread this so that all the states of the federation enjoy the initiative was not possible. Does it mean that if these schools and states selected to enjoy this initiative are developed, then Nigeria is developed educationally? Why is that all the 36 states are covered with MTN mast,

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BSS and recharge cards but it is not so with the educational development initiative? For this the research holds that MTN efforts in education especially the university connect is of strategic aim of aiding selected universities in graduating ICT graduates that can attend to MTN’s ICT demand in Nigeria. This is why the research considers their presence not for the development of Nigerian economy but for market. The efforts in the health and housing sectors are all profit inclined. Since MTN represents a capitalist outfit, nothing will stop her from stationing profit motive as its core value. This is why the repayment of rural houses is tied to the cost of cement at every payment between 7 – 10 years period. This means that the cost of the house is calculated in number of bags of cement such that if in the years ahead the cost of cement rises the house owners are going to pay the number of bags of cement that were agreed upon. A look at MTN’s efforts in health indicates to be a Lagos affair. By and large, in depth look at both economic empowerment schemes, education, health, housing initiatives taken by MTN foundation, is nothing but all profit motivated initiatives with the hope of sustaining its corporate existence in Nigeria.

Proposition two:That there is an increase in teledensity in Nigeria with the presence of the MTN but this does not have corresponding effect to economic development.Under this proposition, five questions were raised in determining the

likely probability of acceptance or rejection of the proposition. Down is table 4.4 containing the questions with their results.No. Question No. of

RespondentsYes No Yes No Total

10. Do you think that the presence of MTN in the telecoms sector has increased the teledensity (number of people access to telecoms per 100)?

200 192 8 96% 4% 100%

11 If yes, does it have a corresponding effect to your welfare and standard of living?

200 78 122 39% 61% 100%

12 If yes is given to question, in what A. Reduce cost of Frequency % Total

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ways? transportation and accidents on our roads

B. Business performance

150

50

75%

5%1000%

13 Are you satisfied with the quality of services provided by MTN to you as a customer and the billing rate to your package?

200 0 200 0% 100% 100%

14 If no, what are those things that make you not to be satisfied?

A. Poor ServiceB. Poor CoverageC. Interconnectivity

problemD. High billingE. Drop CallsF. Lack of uniformity

billing to their packages

200200

200200200200

100%100%

100%100%100%100%

100%

Source: Field Work 2009

From the above table, it can be seen how proposition two has been accepted. 192 respondents representing 96% of the sum total accepted one aspect of the proposition that, with the presence of the MTN in the telecoms sector, the teledensity has grown. This view expressed in the other way holds that with the presence of MTN in the sector the number of people access to communication has shot up reasonably. This is true because studies have shown that before the reform of the sector which warranted the influx of MTN, NITEL was only able to provide paltry 400,000 working lines until 1999, representing 0.42% teledensity level calculated based on 1999 census estimates.

By the time the reform process was in progress and liberalization in the sector started occurring, the teledensity level started going up. By 2001 when MTN became a licensee, the subscriber levels shifted from 508,316 working lines both fixed and mobile to 866,78. In 2002 the growth reached 2,271,050 with the teledensity level of 1.89, which hits 15.72 with 19,810,258 in December 2005. This growth hits 57million subscriber base in the last quarter 2008 with MTN having 20 million out of the figure, which represents 35.70% in the mix of more than 14 service providers (allafrica.com). This has really shot up the growth of the sector such that the number of working lines from 400,000 in 1999 has grown to 57 million with teledensity growth of 0.42% to 40.7% derived from the

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1999 and 2006 census respectively. The phenomenal growth of connected subscriber and teledensity is shown in the table 4.5 below:

SERVICES SUBSCRIBER LEVELS/TELEDENSITY

1999 2000 2001 2002 2003 2004 2005 2008

Fixed 473,316 553,374 600,321 702,000 888,519 1,027,519 1223258 5123258

Mobile 35,000 35,000 266,461 156,050 3,149,472 9,174,209 18587000 51876742

Total 508,316 588,374 866,782 2,271,050 4,038,006 10,201,728 19810254 57000000

Teledensity 0.42 0.49 0.72 1.89 3.36 8.50 15.72 40.71

*Teledensity was calculated based on population estimated of 1999 census and 2006. Source Federal Ministry of information and National Orientation Agency Publication 2005.

Apart from the above, the chart 1 below is used as part of showcasing the validity of the proposition. The figure below is used in showcasing the trends of connected total lines and teledensity (1999 – 2005) in Nigeria.

Figure 1

30,000,000 Total 24

Teledensity 22

25,000,000 20

18

290,00000 16

14

15,000,000 12

10

1,200,000 8

92

6

5,000,000 4

2

Y 0

Dec. Dec. Dec. Dec. Dec. Dec. Dec.

99 00 01 02 03 04 05

Periods

Source: FMINO 2005

The above table and the opinions of respondents have proven that with the emergence of MTN in the sector, the number of people accessing communications has increased. The table above has shown a dramatic shift from 2004 to 2005 which represented an increment of more than 9 million. This increment went up to 57 million in three years with 37189742 increase from 2005- 2008. Is this increment capable of sustaining socio- economic development in Nigeria?

The above question is the second part of the proposition, which holds that there is teledensity growth with the presence of MTN but it impacted positively on socio- economic development. This aspect of the proposition has expressed from views in question 11 of table 4.4. In this question, 61% representing 122 respondents accepted that; the growth of the teledensity does not accompanied welfarism and quality of life in Nigeria. This expression is contained in question 13 where respondents rejected 100% to be satisfied with the quality of services provided by the MTN and their billing rate. This was based on the views as contained in question 14 that the telecoms sector is associated with poor services, poor coverage, interconnectivity problems, high billing, drop calls and many others.

The above issues raised by respondents depict the fact that though there is quantitative change but the change is not qualitative enough to serve the needs of Nigerians. Despite all these, as reported by Maleye Daniel House of Rep Committee Chairman on Information and National

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Orientation that the MTN Annually makes a turnover of N300 billion and an approximate turnover of a N1 billion every day. The question here is how does this turnover impact on the Nigerian economy?

The researcher is of the opinion from the above question that the impact is a stupendous one because the turnovers and the profit have made no positive impact to both government and people of Nigeria. Hence the profit made is taken away to service other economies, Nigeria’s economy suffers economic distress. This scenario is so because all capitalist outfits are profit motivated and directed. This is why the internationalization employed in this work suggests that companies cross borders for the sake of correcting cost related factors and is influenced by ownership specific advantage. In this fact the dependency sees it that such companies reduce the capital basis of the receiving state due to oligo-polisitic advantage and super repatriation. To this ends, respondents in question 16 of table 4.1 agreed that the presence of MTN is meant for market. This agreement represents 89.5% of the 100% that MTN is only coming to invest and make their profit without considering the economic instability in Nigeria and quality of its services to her subscribers. This was why insisted they sought and were given tax waiver for 5 years that amounted to $1.7 billion (Tribune 2008). This is same way of saying that the act is denying the government with funds which would have assisted her in providing social services for Nigerians.

Similarly to the above, responses in question 17 from table 4.1 suggest convincingly that much of profit made in Nigeria by the MTN is repatriated out of Nigeria. This view was expressed by 181 respondents out of 200 representing 90.5% that the profit made is repatriated to the home country. This by implication means increasing the GDP base without trickledown effect on the living standard of Nigerians just like what happened in Latin America between 1965 – 1968 as expressed by Vernon (1977) as cited in the first chapter of this work. This is why the super motive of its investment in Nigeria has made her to deploy all market

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measures of ensuring her motive through its packages and services, billing rates and tariffs. Thus, her motive is achieved through exploiting people from calls, internet and other packages which other national carrier especially NITEL (Mtel) is unable to provide in the sector. Reference of this will be seen from Table 3.1, 2 and 3. This is why apart from the auction bill of $250 million, it was able to reinvest $1.8 billion from 2001 – 2008 and only en masse N1.80 billion to expand their horizon of investment (www.bus.rep.co.ra/index.pup). This means therefore that all what the company had invested in the Nigerian economy is N253.368 billion with a turnover of N300 billion annually as expressed by House of Representative committee chairman on information and national orientation. If this is taken into account the total turnover of N2, 400 billion in 8 years is realised. The balance of investment and turnover stands at N2146.634 billion representing gross profit in this regard. With this figure even if N146.634 billion is used for other logistics and social responsibilities what has happened to the N2000 billion realize through their operation in Nigeria? It is in view of this fact that question 18 suggested 60% that this act will reduced investible capital in the country as what is produced in our economy is taken away. And as dependency suggests placing Nigeria with weak economic base where they only relay on foreign capital, which generally encourages authoritarian type of governments that cooperate with and give foreign companies the political stability they demand to ensure their exploitative and profit motives. Eg Obasanjo’s reforms.

In view of all the above however, respondents in question 12 suggested that with MTN presence in Nigeria, transportation cost and the accidents on our road have reduced as people can communicate to long distances without necessary going to the places. In the same vein, business performance has improved as sellers and buyer can reach their ends on the phone. This does not mean that they are satisfied with the quality of services provided by the MTN following their views given in other questions discussed under this proposition. It is important to mention at

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this point that this proportion is upheld and proven to be correct that there is teledensity increase with presence of MTN, but this does not impacted positively on development in Nigeria looking at issues and proofs raised in the process. This is because an economy suffering from super repatriation will have little funds in investing in the economy to better the lives of people. This is why teledensity has increased without impacting positively on socio- economic development of the Nigerian people.Proposition threeThat the presence of MTN in Nigeria is meant for market.

As a matter of determining the likely possibility of acceptance or rejection of the above proposition, three major questions to this effect were contained in the questionnaire: 16, 17 and 18 which will be discussed in consonance with other questions from other proposition.

No. Question No. of

Respondent

Yes No Yes % No % Total

16 Do you think that the presence of

MTN in Nigeria is only meant for

market (profit)? 200 178 22 89.0 10.0 100%

17 If yes, do you think the made profit

is repatriated out of Nigeria? 200 181 19 90.5% 9.5% 100%

18. If yes is answer to16, suggest the

impact you think it has on the

Nigerian economy.

It will reduce invest able capital

in the country. 120 60% 60%

Table 4.5

Source: Field Work 2009.

From the above table, it can be seen that 178 respondents representing 89.5% of 200 accepted that the presence of MTN in Nigeria is only meant for market but not Nigeria’s socio- economic development as pro MNCs holds. The 89.5% expressed their opinion that the presence of MTN in Nigeria is meant for market purpose. That is to say that they are only all out to make profit from their investments. This is why table 3.1

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and subsequent discussions on the post-paid packages especially those contained in table 3.2 and 3.3 have depicted the fact that MTN is market zealous, profit motivated and directed which has made it run its services throughout Nigeria with poor quality. This fact is seen from its subscriber base of 20 million in September 2008. A glance at the three mentioned tables indicates the fact that all MTN services and packages are all market strategies in maintaining oligo-polistic position in the Nigerian telecoms sector.

In the above, Salvatore (1983) writes on why companies cross borders. He is of the opinion that this is influenced by comparative advantage of global network of production and distribution. By this he meant ensuring their supply of foreign raw materials and intermediate products and circumventing the imperfection often found in foreign markets. They can also project and exploit their monopoly power, adapt their product to local tasks and ensure consistent production quality for their own advantage. One point the scholar made that interests the researcher most is the fact that they shop around for low wage nations that offer the most incentives in form of the tax holidays, subsidies and other tax and trade benefits.

The above issues raised by the scholar were responsible factors that encouraged the presence of MTN investment in Nigeria. This was why the company saw Nigeria as good invest able society with 140 million people and with weak indigenous telecoms company (NITEL). This scenario encouraged the investment for market zeal with subscriber base of more than the home country South Africa; 20 million – 9 million (auafrica.com).

From the above, it is assumed by the researcher that all multinational investments and capitalist outfits are profit motivated, directed and inspired. This has been the reason why Nigeria was seen by MTN as an attractive environment for investment. However, this investment was tied to some requirements as contained in part 11, section 37 – 48 of the Nigerian communications Act 2003 pertaining license

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conditions. Most times these conditions are thwarted for the purpose of profit intention and motive. This fact can be seen from statement made by Chief Ernest Ndukwe, the Chief Vice Chairman NCC expressed during Communication Week 2008 as cited in proposition one in this chapter.

In view of the above, chapter 5 of the Nigerian communications Act 2003, document spelling out economic regulation. The chapter spans to incorporate general competition practices in part 1. In this ends, section 91 (1) state that:

A licensee shall not engage in any conduct which has the purpose or effect of substantially lessing competition in any aspect of Nigeria’s communication sector.

This issue has been one of the major challenges facing the sector where because of oligo-polistic posture and ensuring more relevance in the market, MTN does refuses in most case to interconnect other operators which section 91 (2) is against as it states that:

A licensee shall not enter into any investment or agreement, whether legally enforceable or not, which provides for, rate fixing, market sharing, and boycott of another connection, boycott of a supplier of operators or equipment or boycott of any other licensee.

The above section was included in the Act to ensure smooth and friendly competitive arena for operators for ensuring good service delivery so that the teledensity impacts positively on socio- economic development of Nigeria. However, as we discussed in propositions one that Nigerian government lacked total control over service providers especially foreign base due to their foreign based shifted policies. These shifted policies and the lack of control has made the intention of chapter vii of the Act on consumer affairs not a reality. As part 1 of this Act on consumer protection and quality spelt out in section 104 that:

All service providers shall, in respect of other specific services: meet such minimum standard of quality of ser

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vice as the commission may from time to time specify and publish; due reasonably with consumer; and adequately address consumer complaints.

In view of the above however, consumer complaints are not taken care of. I have been a victim of this circumstance not only once where I recharge N200 and only made a call for three minutes and the credit finished. After I made a complaint nothing was done about it. Situations of these similar circumstances were discovered in course of investigation as the experiences of MTN customers. This was what the researcher expressed somewhere in this part of the work as the “mirage of the appendages” indicating act of state not having control over her domestic affairs. The above section constrains service providers to address issues as identified by question 14 of table 4.2 as challenging the services offered to consumers in the sector. Despite these issues, MTN is not committed to addressing them but it is busy making its sales, which stood at 2400 billion roughly estimate (NTA 2009). What happens to the profit made from the sales?

The answer to the question above is contained in responses to question 17 of table 4.5. In this regards, 181 respondents representing 90.5% of 200 respondents were of the opinion that the profit made by MTN is repatriated out of Nigeria to the home country. In view of these only 19 respondents representing 9.5% reject that the made profit is not repatriated. If the company is not profit directed why should they seek tax waiver before investing in Nigeria? What is happening to their profit made if not repatriated? Another argument is why have they committed less than their earnings in the country as discussed somewhere in this proposition?

Looking at these worries, the work acknowledged the fact that MTN is repatriating the profit made out of Nigeria. This is said not only because of high percentage of respondents accepting this view; the existing literature has proven this fact. This is why internationalization model holds

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that national companies cross borders for the sake of correcting cost related factors of production suffered at home but if they are reinvesting the profit made their goal will not be achieved. This is why from evidence MTN is able to reinvest less than her earnings in Nigeria and repatriates to solve the base problems. And for MNCs (MTN) to do this perfectly, they only invest in places that are less competitive, business attractive and less monitored. In this regards, exploitation theory, a strand of dependency theory holds that third world is poor because it has been systematically exploited (Amin 1976). This is done according to them by draining of economic surplus, transferring wealth from the less developed to developed world through trade and investments. This view shows that multinationals (MTN) are only investing in less competitive areas to drain such economics. This is what the researcher considered to be the major concern of MTN in Nigeria. If this is not so, the profit made would have by now been used in developing good telecoms system in Nigeria. In spite of the profit, the quality of services provided by the MTN is so poor such that people have lost confidence in them. This is why question 14 pointed some of challenges facing MTN subscribers. However, the research considers that MTN is not yet willing in solving these problems, but only willing to expand its subscriber base so that their recharge cards would be bought worth of billions every day. What effect does this have on the Nigerian economy?

Responses from question 18 in table 4.5 treat the above question. It was the opinion of 120 respondents representing 60% of the sum total that the repatriation conducted by MTN in Nigeria will reduce investible capital in the country. Their view is acceptable by the researcher taking into account of the fact that the monetary content of what is produced in Nigeria is taken out of the country, thus creating economic stress that is in most case expressed in social and political violence. This scenario occurs because the state becomes incapable of providing social services that better quality of life of the citizenry. There was a questions raised in the

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introductory chapter of this research challenging the position of pro MNCs that the economic impasse and low technological basis persisting in third world is not historically considered by their argument. It was considered by their arguments that MNCs are vehicles of development and if allowed to flourish in third world would assist in bringing development through technology transfer, capital, employment and many others. If this is so the numbers of MNCs looming in the continent are not enough to assist in solving the persistent poverty, economic decay and technological imbalances.

The above issue raised is explained from Vernon study of MNCs in Latin America. His study was able to show that 83% of USA based MNCs in Latin America were from reinvested earnings, only 17% of USA investments during the period represented a transfer of capital from home to the host. This study went ahead to show that for every dollar of the net profit earned by a global corporation in such subsidiaries, 52 cents left the country even though 78% of the investment funds used to generate the dollar profit came from local sources. This situation applies to MTN and Nigeria because the worth of MTN assets is not much of what they transfer into Nigeria. This is taken from the fact that from 2001 – 2008, only $1.8 billion was invested and N1.8 billion was en masse in 2009 to be reinvested. However, from rough estimate, they have made a sale of up to N2400 billion in 8 years (NTA 2009 and FRCN 2009).

The sales and profit does not have positive effect on our economy because such is taken out of this economy to another as it is seen as the general characteristic of all multinationals. Reference from Vernon’s study from 1965 – 68 in Latin America reveals that such societies that experienced such may not have enough capital to invest for the take off of indigenous controlled development.

In view of these discussions it worth mentioning that the proposition is upheld. This is because percentage of acceptance outweighs the ones of rejection. For instance 178 respondents representing 89.5% of 200

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respondents accept that MTN presence in Nigeria is meant for market. This is complemented by table 3.1, 3.2, 3.3 and all the discussions on MTN tariffs and rates. It can be seen from these tables and subsequent discussions that follows that all MTN services and packages are attached to market strategy. This analysis went ahead in looking at whether the profit made in the process stays in Nigeria or not. It was gathered in the process that such monies are often repatriated back home as literature has shown cum opinions of respondents. It was at this point that 60% respondents suggested that this will have negative effect to the Nigerian economy as such act will reduce available and investible capital in the country.

It is in view of the above that the research holds the view that the presence of MTN in Nigeria is meant for profit making but nothing short of that.Proposition four states that:The presence of MTN with its technology will discourage local companies doing business in the area of its investment.

In view of the above, 20, 21, 22 and the following were designed in the manner of seeking explanation and testing of the proposition. Below is table 4.6 indicating responses to this effect.

Table 4.6

No. Question No. of Respondent

Yes No Yes % No % Total

20 Do you think the presence of MTN with its technology will assist the performance of local companies for the development of the telecoms sector in Nigeria?

200 91 109 45.5% 54.4% 100%

21 If yes, how do you think this will assist the performance of the local companies in the telecoms provision?

A. Increase coverage and Level of communications.B. InterconnectivityC. CompetitionD. Innovation and Creativity in the sector

7233035

3.5%11.5%13%18%

48%

22. If no, what do you think will transcend between the MTN and the local companies (NITEL and Globacom)?

A. Domination due to advanced technology owned by MTN.

B. Discouraging the growth of 107 53.5% 60%

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local companies in Nigeria

93 46.5% 100%

Source: Field Work 2009.

From the table above it can be seen that the higher number of respondents are of the opinion that the presence of MTN with its technology cannot assist local companies in improving their quality of service rendered to its customers. This view was overwhelmly expressed by 109 respondents representing 54.5% of the total respondents out of which 45.5% representing 91 respondents accepted that the presence of MTN can assist the performances of local companies in the telecoms sector. This view as expressed by those group rejecting the fact that the presence of MTN with its technology is not meant in assisting local companies in their service delivery is strengthened by market imperfection and oligo-polistic model that holds:

Business firms makes foreign investment to exploit their quasi monopoly advantages like technology, access to capital, differentiated profits built on advertising, superior management and organizational scale make them to create market imperfection and dominance (Preston1993 and Friedman 1999).

These investments according to the theory may be horizontal or vertical. Horizontal investment may occur with intention of reducing the competitor, duplication facilities and expand a firm’s operation in an existing line of production. Apart from the horizontal dimension of investment, it may also takes a form of vertical angle where the investor controls input as oligo-polistic firm, makes it possible to raise barrier to entry of new companies whether local or foreign so as to protect their oligopolistic position (Slanbik 1983 and Fredinan 1999).

The above assertion is also sustained by eclectic model through the writings of Dunning (1981) who states the three conditions that are necessary for such investments. One of this is ownership specific

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advantage. By this the scholar meant the extent a company has tangible and intangible assets unavailable to other firms. This condition indicates the fact that no company will be willing to invest in societies where its comparative advantage is limited. This is why MTN was willing to invest in Nigeria having seen the decaying nature of telecoms sector with no competitors to challenge its own comparative advantage and profit making.

Another condition he gave was internalization advantages. This implies the company’s best interest to use its ownership specific advantages rather than license them to other companies. This reason informed the researcher to think that the core of all multinationals investments to maintain their corporate existence so as to dominate for profit motive. This fact enables the research to state without reservation taking from common logic that the presence of MTN with its technology did not assisted the performances of local companies rather discouraged them. With this, the researcher considers to be so because if MTN presence is going to assist other operators especially the local ones, her (MTN) core agenda will be threatened. This is the other way of saying that “No” competitor can assist her competitor to stand well to challenge her corporate existence of profit making. It is in view of this that the researcher considers the presence of MTN not to assist the performance of local companies as it may challenge their dominance and oligopolistic posture. This can be seen evident from the outplacement of Mtel in the sector, which MTN has done nothing to bring them back in the market as the research finds out.

The last condition mentioned by the scholar is location specific advantages which imply the company’s willingness to locate part of its production facilities overseas in areas that are less competitive and business attractive. This condition indicates to the fact that such investments like the ones of MTN are directed to areas that have less outfits to compete to the investor. Being as it may, such investor(s)

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cannot assist the existing firms to develop their ownership specific advantages up to the state of challenging their profit directed motive. This is why vertical investments according to market imperfection and loigopolistic model holds that firms makes it possible to raise barrier to entry of new companies whether local or foreign so as to protect their dominance status. With this, the researcher considers that the presence of MTN cannot assist the performance of local companies as their improvement can challenge MTN core motive of profit making. It is in regards of this that they are willing and capable of increasing their subscriber base to 20 million in 2008 representing 35.70% of 57 million ensured in Nigeria in the mix of more than 14 service providers (allafrica.com).

It is contended in view of the above by dependent development theorists that development claiming to be brought by MNCs is not development because it does not lead to nation independence. This was why they summarized generally the effects of the linkages that have taken place between the core and the periphery as:

Manufacturing investments by MNCs and dependent industrialization, which have the effect of creating a branch plant economy with high production cost, destroying local entrepreneurship and technological innovation, and bleeding the country as profits are repatriated.

Foreign firms that gain control of key industrial sectors and crowd out local firms in capital market.

Introduced inappropriate technology. An international division of labour created between the high

technology of the core and low technology of the periphery. Prevention of autonomous or self-sustaining development based on

domestic technology and indigenous entrepreneurship.

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Distortion of the labour market because MNCs pay higher wages than domestic employers and therefore causes waste and increase unemployment.

The above issues raised by the theory is complemented by responses from questions 22 of table 4.7 in which 53.50% representing 107 respondents asserted that the presence of MTN cannot improved the performance of local companies, rather dominance which their (MTN) subscriber base of 20 million representing 35.70% of 57 million confirms this. This spanned where 93 respondents offered that MTN not only dominates the market but also controls the telecom’s market in Nigeria which the researcher think is ensured due to their ownership specific advantages over the local companies.

In spite of the above, question 21 was able to identified areas through which MTN has assisted local companies to perform adequately for service delivery. These include increase coverage and level of communications, interconnectivity, competition, innovation and creativity in the sector. All these identified amounts for only 48% which is not so much significant compare to the number of rejection of 52%. Despite this critical analysis will be considered in these areas to see the relationship between these areas and socio- economic development in Nigeria.

Increase coverage and level of communication. It is quiet shown in chapter three and proposition two that there is great dramatic change in levels of coverage, however this is not efficient as opinions in question 14 have shown. This is to say that the coverage is not most important, what matter is the quality of such coverage. Another argument is how the coverage has assisted Mtel in its service delivery, which it has rather been displaced in the market circle. This is why the opinion accounts for only 3.50%.

Interconnectivity was also considered to be another area to have been assisted by MTN for the performance of local companies. For instance section 100, Nigerian communications Act 2003, states that:

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To ensure that networks remain interconnected at all times, parties cannot disconnect or discontinue interconnection without approval of the commission.

In spite this section the major challenge facing the sector is interconnectivity problem as Andzenge (2005) mentioned some of the disputes existing among the service providers as:

Between NITEL and other PTOs Between NITEL and newly licensed mobile operators Between major mobile operators and other PTOs etc.

Apart from the above, there are instances where a caller could be informed that “number dial does not exist on the MTN mobile network” are experienced by subscribers. This issue is most serious between MTN and other networks. With this the researcher considers that interconnectivity is not ensured in the sector with the presence of the MTN.

Competition was also considered to be another area. It is assumed by the researcher that in fair playing ground where competitors are almost in the same rank, such will benefits mostly every competitor. But considering this situation where MTN with high advanced technology competing with NITEL having obsolete equipment. Who will take the back seat? In view of this, the research considers the competition to be unhealthy for local companies in view of their limited comparative advantages over the MTN.Going by the above, it is assumed by the research that the proposition is upheld. This is seen from the opinions of respondents that the presence of MTN in Nigeria cannot assist in the performance of the local firms. This is assume from the fact that MTN is interested being in Nigeria because of less competitive environment. And if MTN through its activities consciously or unconsciously targeted at improving the status of other companies in the sector their core motive of profit shown by proposition three will be challenge as competition will sets in. if this is not being so

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they should have less of their current subscriber base and assisted MTEL to be in the market rather than being displaced so therefore MTN’s presence is not to assist the performance of local companies, but for corporate goal of profit marketing. TABLE 4.7: Summary of the result.Propositions and Questions

Cases Positive Negative Positive%

Negative%

Total

Proposition 1Question 6 200 80 120 2.50% 3.75% 6.25%Question 7 200 200 0 6.25% 0% 6.25%Question 8 200 90 110 2.82% 3.43% 6.25%Question 9 200 87 113 2.72% 3.53% 6.25%Question 13 200 0 200 0% 6.25% 6.25%

1000 457 543 14.29% 16.96% 31.25%Undecided 0 0 0 0 0 0Proposition 2Question 10 200 192 8 6% 0.25% 6.25%Question 11 200 78 122 2.44% 3.81% 6.25%Question 12 200 200 0 6.25% 0% 6.25%Question 13 200 0 200 0% 6.25% 6.25%Question 14 200 0 200 0% 6.25% 6.25%

1000 470 530 14.69% 16.56% 31.25%Undecided 0 0 0 0 0 0Proposition 3Question 16 200 22 178 0.79% 5.56% 6.25%Question 17 200 19 181 0.6o% 5.65% 6.25%Question 18 200 0 120 0% 3.75% 3.75%

600 41 479 1.39% 14.86% 16.25%Undecided 80 2.5%Proposition 4Question 20 200 91 109 2.85% 3.40% 6.25%Question 21 200 96 0 3.0% 0% 3.0%Question 22 200 0 200 0% 6.25% 6.25%

Undecided600104

187 309 5.85% 9.65% 15.50%3.25%

TotalUndecided

3200184

1155 1861 36.22% 58.03% 94.25% 5.75% 100%

Source: filed work 2009.

In final analysis as regards this chapter all the propositions have been upheld. It therefore means that economic development is not the core motive of MTN presence in Nigeria. This is why a glance at the table above shows 58.03% that the presence of MTN in Nigeria is not meant for development. This is obvious based on the repatriation, quality of the service, thwarting of communications laws and among other evils seen from the activities of MTN. It is on this note that the investigation measurement scored 36.22% for and 58.03% against. By and large MNCs are not vehicles of development in the Third World, instead they do carry

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out exploitation to solve production cost at home and deepen the wounds of dependence that are created at every phase of capitalist expansion. It is in view of this that MTN internationalized into Nigeria to exploit the oligopolistic advantages that were not available to any local company.

CHAPTER FIVE 5.0 SUMMARY, CONCLUSION AND RECOMMENDATIONS5.1 Summary

This research was designed to examine the role of multinational corporations in economic development in Nigeria, with a case study of MTN, which came during reform process that started in 1999. And the

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choice of this area and the case study was occasioned by certain objectives. First was to investigate and find out strength of the assertion made by Obasanjo that “the solution to Nigeria’s economic impasse will be corrected by encouraging foreign direct investment” Where a bilateral joint commission with nations identified as exporters of capital was adopted. Secondly, the thought held by the researcher and the reform to consider telecommunication as a critical driver and enhancer to development. In view of this, the researcher seeks to find out the performance of this sector towards development through activities of the MTN.

Apart from the above was to find out how and what might be the nature of relationship between MTN and Nigerian government for the purpose of either changing the already existing situation or not. It was in this regard that the mission statement was to examine the extent MTN through its activities ensured economic development Nigeria. This enables the researcher go beyond communications to other areas like education, housing, health and economic empowerment etc.

To achieve the objectives as earlier highlighted, four propositions were drawn and data were sourced from two sources: Primary and the secondary. Under the primary sources, structured questions were designed and administered to MTN subscribers in Makurdi town. Similarly, observation and personal interview formed part of our data under this source. The primary sources were complemented by secondary data extracted from books, journals, magazines, and newspaper, Internet etc. It was the interplay of these that at the end of the day the research discovered that economic development is not ensured in Nigeria by the MTN. This was so because of so many reasons like repatriation, poor quality of services, low social service provision in Nigeria and in few areas, suppression of telecoms laws, and domination over local companies etc. All these challenged their efforts in bringing about economic development in Nigeria.

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It was discovered in course of finding that all multinationals are run by home based polices especially on issues of management, technology, market organization and other vital areas that concern the corporate existence of the corporation. This is why the research looks in it that if such local laws inhibit the motive behind such investments, the local laws take the back seat.

Apart from the above, it was discovered in the process as informed by Aremu (1997) that apart from the Central Bank of Nigeria’s Annual FDI survey, which is designed for Balance of Payments computation, limited effort is put in place at appraising the impact of alien entrepreneurs’ activities in Nigeria. This assertion indicates the fact that there is poor monitoring. And this is why there are often complaints by NCC that the conditions of license are defaulted by licensees (Communications Week 2008).

However it was discovered that some critical spheres of economic lives were identified like health, education, housing, communication, transportation, economic employment and employment as impacted positively by MTN. Responses in this regard recorded 100% as table 4.2 shows.

In the above respect research uncover in process of investigation that MTN foundation in partnership with sickle cell foundation of Nigeria assisted sickle cell clinic for the prevention of and curative healthcare services for suffers of the sickle cell disorder. This assistance was made to Children’s hospital Massey Street Lagos Island and Primary health Centre, Amuno Odofin respectivily with polymerase chain reaction Machine (PCRM) for DNA analysis and the training of 41 health care workers for counseling which was not in quantity.

In spite low profile in health sector, educational sub sector received MTN attention. It was discovered during the course of investigation according to MTN that, it has committed in investing in education such that the various levels: primary, secondary and tertiary are positively

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affected. In achieving this MTN foundation initiated schools connect project with the hope of using ICT to enhance teaching and learning in secondary schools in Nigeria which in the end only 85,610 students and 3,817 teachers were involved in the programme. Similarly the universities connect was discovered to be another effort in improving quality of education in the country ensured by MTN. This initiative provides a link to the world’s largest collection of digital resources from over 5,000 libraries and 300 publishers to assist university students and professors with research, though only five universities benefited from the programme. Though this programme the research thinks was meant in assisting selected Universities in producing her ICT demand in Nigeria.

Similarly the research discovered in addition that between the (1965) time when NITEL was created until its time of privatization, only 400,000 working lines were ensured in the country with a teledensity of 0.42. This situation however started facing a different dimension with the presence of the MTN in the sector. From 1999 to 2008 the working lines plummeted from 400 000 to 57,000,000 which however does not accompanied with quality and improvement on the quality lives of the people. Further finding has exposed issues like poor service, poor coverage, interconnectivity problems, high billing, drop calls and many others as practices challenging the performance of MTN in the sector. This implies an increase in subscriber levels without quality reflection. How can this better the quality of lives if quality is not ensured?

On repatriation finding shows that MTN annually makes a turnover of N300 billion and a sale of at least N1 billion every day (NTA 2009). It was gathered that apart from the auction bid payment of 258 million dollars it has invested $1.8 billion from 2001 – 2008 and have en massed to use N1.80 billion in 2009 to expands its horizon of investment. Being this as it may, the total investment of N253.366 billion is recorded and turnover of N2400 billion in 8 years. The balance of investment and turnover lives the net balance at N2146.634 billion representing profit to some extent. But if

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even N146.634 billion is used for other logistics and social responsibilities, what has happened to N2000 billion! It was in view of this that the research and the responses suggested the repatriated profit will reduce investable capital in the country.

In spite the above it was gathered that with MTN and the growth of teledensity, transportation cost has reduced and the rates of accidents as people can communicates to a long distance places without necessary going to those places. In the same vein the respondents also acknowledged that this has impacted positively on businesses as buyers and sellers can reach their ends within a shortest possible time. With this however, further investigation shows that the quality of the service provided by MTN is not enough in improving the quality of lives of Nigerian as the profit is repatriated and the quality of the services are poor.

The research also discovered that Nigeria was identified by the MTN to be an environment attractive for investment due to its population with fewer competitors, as NITEL was not performing. And as market and profit motivated, MTN with other first generation foreign-based telecoms firm, Cettle seeks tax waiver, which was given in five years and estimated at $1.7 billion (Tribune 2008).

More importantly due to market zeal, much that has been gotten by MTN in Nigeria is not reinvested in the country. This has gone to the point of violating communications laws in Nigeria especially section 39-49 of part 11 and section 104 on consumer protection and quality of services. This is why there are complaints about the quality and other sub standard issues in the sector. It is important to note that in the review of the literature, the subject of the research has divided scholars in two extreme camps where the first looks at MNCs as vehicle of development while the second group takes them to be anti development. In verifying these from the role of the MTN in Nigeria it was noted that MNCs are not vehicles of development. This is so because of issues of domination, repatriation, thwarting of local laws,

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creating ideological change and to MTN in addition the poor services it is offering in the country. In the same vein the presence of MTN with its technology couldn’t assist local companies because as MTN is market inclined and if it is willing to assist local companies her corporate motive of profit making will be threatened. This is why none of this effort of assisting Mtel come back to the market was discovered in the process of investigation. The analysis have an expression in the two model adopted for this study. According to internationalization model, national companies cross borders with hope of solving cost related factors of production. And this is possible because of ownership specific advantages and comparative advantage that make local companies have no control over consumption in their own country because of the oligo-polistic advantages enjoyed by MNCs. This is why MTN is totally in control of the telecoms market with 20 million consumers out of 57 million in mix of more than 14 service providers, which the research considered it to be ensured based on their ownership specific advantage.

Considering the above, it was discovered in the process that in ensuring corporate motive of profit making, MTN with its technology, the sector is still experiencing interconnectivity problem and other existing problems. These problems the research considers them to be an artificial problems ensured by service providers especially dominant ones so as to discourage emerging ones in assessing the telecoms market.

It was in view of these that in final analysis it was discovered in the research that the presence of MTN is not meant in developing Nigeria, rather for her profit agenda. This is why an investigation of to what extent it has ensured economic development has scored 36.22% positive and 58.03% negative.5.2 Conclusion

Generally speaking, each and every society from all ages concerns itself with preservation and survival, which has made the issue of economic development a paramount search. In view of this issue,

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different strategies were developed as means and processes of searching for the economic development by different societies including Nigeria. In Nigeria for instance, immediately after independence different development strategies were developed through national development plans, which started in 1963. Under these plans, strategies like import substitution, Nationalization, Agricultural Farm Projects (AFPs), Operation Feed the Nation, Green Revolution, SAP, Vision 2010, Vision 2015, Poverty Alleviation and Eradication, NEED, SEED, LEED, and among others were adopted by Nigerian state in solving her problem of economic crisis, which all failed in one way of the other due to both internal and external forces.

In view of all the failures associated with strategies taken in Nigeria, in 1999 president Obasanjo conceived that the solution to Nigeria’s economic impasse will be corrected by encouraging the influx of Foreign Direct Investment (FDI) in the economy. This made it possible the reformation of the entire economic system.

In an attempt in finding out the relation between the MTN and development in Nigeria, it was discovered by the research that the relation between MTN and Nigeria is not possible to bring about development. This was on the basis of how policies on the running of MTN are externally directed, repatriation of profit made in Nigeria, poor quality of services, thwarting of telecoms laws, narrowing interconnectivity and others challenges experience in the sector.

In spite the above; MTN attempted carrying out social responsibilities in spheres like economic empowerment, housing, health, and education. It was discovered that MTN underperformed regarding these areas. For instance under the school connect less than 5% of schools in Nigeria benefited from the project. Under the universities connect out of hundreds of higher institutions in the country only 5 universities benefited from the project. This percentage is impossible to be considered development. Similarly, the economic empowerment was an attempt to raise subscriber level through the phone ladies. By this the

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research thinks that MTN investment in education was to encourage selected universities produce required ICT graduates that can assist meeting her ICT demand in the country. This spanned to other spheres. Economic empowerment was to increase subscriber base, health to have healthy customers and housing to increase her profit.

Apart from the above issues, the research discovered that the presence of MTN in Nigeria’s telecoms sector is not possible to improving the corporate existence of local companies. This is so because the whole aim of MTN in Nigeria’s economy is for market motive and if she is willing to assist the performance of local companies in service delivery, her corporate motive in Nigeria will be defeated. It was on this basis that the research was able to reject the liberal submission that through multinationals, local companies can benefit from advance technology. Even though technology is transferred from the base to the host, it is only meant for their need, which the research considers it of not being trickle down to local companies. This is evident from the displacement of NITEL (MTEL) in Nigeria’s telecoms market.

In final analysis the researcher has it to say that though with MTN, the subscriber base of the country has grown no doubt, but this does not show any indication of development since all that takes in bringing development is lacking. MTN with its market motive is not willing in improving the quality of its services in the country. More importantly, the social sectors it identifies to improve are poorly attained to through its foundation. This is why the measuring scale of the research towards her contributions to economic development measured 36.22% positive and 58.03% negative. It is view of this that research concludes by saying that economic development is not ensured by the presence of MTN in Nigeria, rather her corporate motive of profit making in other to maintain dependencies that are ensured at all phases of capitalist expansion in periphery, but nothing more than this motive. In the end, the liberal perspective of economic development is an enslavement of weaker

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societies in the globalising world which at the end of the day does not assist reform to achieve its set goals. Conclusively, multinationals should not be encouraged to loom in the developing economies due to their bedevil activities.5.3 Recommendations

Based on the above findings the researcher discovered that the neo-liberal economic system does not have any sympathy for Nigeria and the entire third world countries, which have been the driving force to their dependence and total volatile underdevelopment. It is the contention of the research that this chronic turmoil will be over thrown within the possible framework of socio-political and economic revolution. In other words, weaking of ties between western capitalism and the periphery, which may emerged from political thinking that reduces emphasis on foreign loan, aid, grant and foreign investment. In view of this the research advocate for:(1) Proper bargaining before application of Multinational Corporation in

Nigeria if necessary. This wills enables the government defines terms of investments before application so that insidious acts through activities of MNCs will be avoided at the time of operation.

(2) Proper monitoring should evolve in the country so that terms of registration are properly adhered to by MNCs.

(3) Policies on the running of all MNCs looming in Nigeria should be subject to Nigeria’s local laws so that the state has total control over all MNCs.

(4) Specifically to the MTN, the research recommends that it should improve the quality of the service delivery, reduce billing rates of all calls to N15.00 per minute so as to increase the quantity of consumption and quality all intending to ensure universal access coverage as experienced in the developed societies.

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(5) The MTN social responsibility packages should be increased in quantity and quality so that quiet reasonable number of Nigerian benefit from the initiatives.

(6) MTN should stop repatriating profit earned in Nigeria and reinvest in the economy so that the reinvestment will have the effect of reducing economic, social and political impasses that are militating development.

(7) In the similar vein, the research insists that the interconnectivity war experiencing in the sector should be properly addressed so that service delivery in Nigeria will be enhanced throughout all operators. This will be ensured in three ways. First the two national carriers must be fitted with national fiber-optic backbone. Secondly, national number registry clearing house (or zonal houses) with a tandem switch capable of handling several different transmission protocols should be established and maintained either by NCC or preferable by a consortium of all operators where each operator can access based on her capacity. Thirdly, all the analog transmission in the national telecoms network should be upgraded to a digital mode in shortest time as a matter of national priority. This should be accompanied with infrastructural development in the country.

(8) The research recommends also that all the sections of Nigerian communications Act 2003 should be comply with especially sections 38 – 48, 91 and 104 so that consumers are protected by the law before service providers and conditions of license are observed by the licensee.

(9) NCC should not only ensure good competitive environment, but also defines relationship among operators and ensuring that no operator undermines such codes and if does punishable with no sympathy.

(10) Nigerian government should ensure that MTN technology should be transfer into the country not on paper, but in the concrete terms so as to aid entrepreneurial development in the country.

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(11) If all these are to be impossible, the research advocates for political order that will Nationalize all multinational corporation existing in Nigeria so that indigenous and self-reliance will be allowed to evolve in Nigeria.

It is in view of all these among other things that the research considers Nigeria’s development to take a sincere root without external infliction.

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