Investors who bought shares in MTN Nigeria’s December 2021 public offer and reinvested their dividends earned an annualised real dollar return of 9.9 percent through September 2026, outperforming investments in Nigerian sovereign Eurobonds and treasury bills.
The telecoms company disclosed this in its nine-month 2026 earnings presentation, showing how a N1 million investment at the offer price of N169 per share would have grown to an equivalent of $4,545 with dividends reinvested.
The same initial investment would have been worth $3,433 in Nigerian sovereign Eurobonds and $1,438 in naira-denominated treasury bills over the period, according to the company’s analysis.
Modupe Kadri, chief financial officer of MTN Nigeria, said the company prepared the comparison following questions from investors during its roadshow and capital markets day in South Africa about the real returns on investments in Nigeria.
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“With dividends reinvested, the investment has grown in U.S. dollar terms after inflation, despite naira devaluation,” Kadri said during the company’s third-quarter earnings call.
The analysis highlights the contribution of dividend payments to long-term shareholder returns, particularly as currency depreciation and inflation have eroded the value of naira-denominated investments.
MTN said its investment performance exceeded the reported real returns from Nigerian sovereign Eurobonds, which stood at 3.6 percent, while treasury bills recorded a negative real return of 13.6 percent over the comparison period.
However, the performance may not be easily replicated across the broader equity market, as other dividend-paying companies would need to sustain earnings growth and shareholder distributions while protecting returns against currency depreciation.
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Kehinde Jones, head of research at Anchoria, said other dividend-paying companies listed on the Nigerian Exchange could potentially deliver similar inflation-adjusted dollar returns, but MTN’s performance may be exceptional.
“MTN’s 9.9 percent annualised real dollar return should not be treated as a standard market expectation,” Jones said, adding that similar returns would depend on companies’ earnings growth, dividend sustainability and ability to protect shareholder value against currency depreciation.
The distinction is important because MTN’s calculation goes beyond changes in its share price. Reinvesting dividends allows investors to use cash distributions to acquire additional shares, increasing their holdings and potential returns from subsequent price appreciation and dividend payments.
MTN’s December 2021 public offer was priced at N169 per share and involved the sale of up to 575 million existing shares by its parent company, MTN Group. The offer attracted more than 126,000 investors and was oversubscribed, with total subscriptions reaching 802 million shares.
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The transaction was part of MTN Group’s effort to broaden local ownership of its Nigerian subsidiary and deepen participation in the country’s capital market.
However, the reported returns reflect a specific investment scenario based on the public offer entry price and the reinvestment of dividends. They should not be interpreted as guaranteed returns for investors buying MTN shares at current market prices.
The comparison nevertheless illustrates how dividend-paying equities can contribute to long-term wealth creation, even in an economy that has experienced significant currency depreciation and inflation.
Ayomide Odunlami is a Tax Reporter at BusinessDay, covering Nigeria’s tax reforms, compliance trends, and government revenue strategies. She reports on how evolving tax policies affect businesses, investors, and the broader economy, providing clarity on complex regulatory issues through data-driven journalism.
