MTN South Sudan to Cut Jobs, Cancel Plans on Economic Crisis

  • Company cites falling subscriptions, shortage of U.S. dollars
  • SABMiller unit closing brewery on foreign currency deficit

MTN South Sudan, a unit of Africa’s biggest mobile-phone company, said it’s cutting jobs and canceling expansion plans as the war-torn nation battles an economic crisis.

The workforce will be reduced to just over 80 people from 170, while plans to build 40 communication towers have been shelved, according to Khumbulani Dhlomo, the company’s head of corporate services. MTN has invested as much as $170 million in the country over the past two years, without seeing profit, he told reporters Tuesday in the capital, Juba.

“We have seen a decrease in our customer base,” he said. “People now have to choose between buying a phone, buying airtime and buying bread.” MTN has slightly more than 1 million subscribers in South Sudan, according to Dhlomo.

Oil-producing South Sudan has seen its currency collapse and inflation surge since conflict erupted in December 2013 and curbed crude output. The International Monetary Fund projected the economy would contract 5.3 percent last year. The landlocked country has sub-Saharan Africa’s third-largest crude reserves and currently pumps about 160,000 barrels a day.

Exchange Rate

“The biggest challenge is the exchange rate of the U.S. dollars,” Dhlomo said. “It’s either the U.S. dollars are too expensive for the company or not there.”

SABMiller Plc, South Sudan’s main non-oil foreign investor, was due to shut its brewing operations in the first quarter of this year as a shortage of foreign currency curtailed its ability to import raw materials. South Sudan Breweries Ltd. said it has failed to turn a profit since setting up the nation’s first brewery in 2009.

“We are trying as much as possible to do what we can so that at the end of the day we don’t find ourselves in a position where we have to close the company,” Dhlomo said.

“Obviously if the economy doesn’t change, the dollar keeps on doing what it is doing, then you can’t survive and there is a possibility to close down,” he said.

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