MTN Ghana reports profit surge as interest rates jump, network rollout continues

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MTN Ghana, Africa's biggest mobile operators third-most profitable market, says investment in its network and of its surplus cash helped offset tough economic conditions in the west African country in its 2022 year, when profits grew more than a third, and subscribers by double digits.

Profit after tax rose 42.7% to 2.85 billion Ghanaian Cedi (R4.05 billion) in the 12 months to end-December, when group service revenue grew 28.3%, while mobile rose by 12.8% to 28.6 million.

Economic conditions in Ghana have been difficult, with the country struggling with a surge in inflation and rising government debt, raising the prospect of a sovereign debt crisis. 

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The average monthly inflation rate during the year 2022 was 31.5% and rose for twelve months in a row to reach 54.1% in the month of December, MTN Ghana said, with authorities in the country responding by increasing interest rates.

Finance income increased by 161.3% on gains from the investment of surplus cash in call and fixed-term deposits, the company said.

The group also invested about R3 billion in modernisation of infrastructure, improve IT systems and expand network capacity and coverage across the nation, rolling out 400 2G, 400 3G and 1 142 4G sites.

The company also modernised 820 existing 4G sites, increasing its 4G population coverage by 8.7 percentage points to 99.3%

"The macroeconomic outlook for Ghana in 2023 remains challenging with debt sustainability challenges, currency volatility and the risk of further depreciation expected to persist," it said on Wednesday.

"Coupled with the rising cost of fuel and utilities, this is expected to exacerbate general inflationary pressures and adversely affect consumer spending and business operations."