South Africa

MTN CEO warns that South Africa is at risk of becoming a failed state

Ralph Mupita

In his company’s latest results, MTN group CEO Ralph Mupita warned that inaction from the government and business could turn South Africa into a failed nation-state.

Mupita said, through the state of disaster, South Africa has a unique opportunity to accelerate efforts to secure the resilience of critical national infrastructure such as telecommunications.

“Government and business must jointly seize this moment and act decisively to deal with the quadruple crises of energy; logistics; crime and corruption; and youth unemployment,” said Mupita.

“Inaction risks South Africa being a failed nation-state.”

Load-shedding is causing tremendous damage to the South African economy and most businesses, and MTN is not immune to this trend.

Power cuts impacted MTN South Africa’s EBITDA by R695 million as additional expenditure was incurred to meet the requirements of power, security, and repairs.

“Amid unprecedented load-shedding and the intensified need for backup power in the second half of 2022, MTN South Africa invested significantly to secure network resilience,” the company said.

MTN plans to spend R9 billion in 2023 on the South African network to ensure its resilience and ability to operate during prolonged periods of no electricity.

The company has also created contingency plans for a potential total blackout in South Africa, with ‘war rooms’ being set up to ensure its network remains operational during such an event.

Big business sounds the alarm

Standard Bank CEO Sim Tshabalala

Mupita is not the only prominent chief executive who has warned that the government’s poor performance is causing serious problems.

FirstRand CEO Alan Pullinger said South Africa’s support for Russia could have “extremely negative consequences” for the country.

Pullinger highlighted that South Africa benefits far more from its trade and economic partnerships with the United States, the UK, and Europe than from Russia.

Standard Bank CEO Sim Tshabalala also urged the government to ensure its position on Russia does not adversely impact South Africa’s financial institutions.

Nedbank CEO Mike Brown said economic growth and job creation suffer because the government failed to fix Eskom and stop load-shedding.

He previously said the damage done to South Africa’s economy over the last ten years is greater than many people thought. It means that the turnaround is going to be slower.