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MTN to lay off South Sudan staff

Tuesday March 29 2016
mtn

South African telco MTN has been forced to lay off some of its staff in South Sudan because of dollar scarcity. PHOTO | FILE

South African telco MTN has been forced to lay off some of its staff in South Sudan because of dollar scarcity.

The MTN head of corporate services in Juba, Mr Khumbulani Dhlomo, disclosed at a news conference on Tuesday a number of jobs would be cuts due to the scarcity of hard currency and fuel to operate its generators on a 24-hour basis.

South Sudan has experienced an economic downturn as a result of conflict, occasioning reduced oil production and high inflation.

READ: South Sudan in major economic meltdown

The exchange rate has for two weeks been pegged at SSP4,400 per $100 dollar, on the black market, one of the highest since independence.

South Sudan relies over 98 per cent on oil revenue, a situation that has further been complicated by the decline in crude prices.

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It produces about 100,000 barrels per day, with a barrel currently fetching less than $50 in the global market.

MTN South Sudan employs 170 senior staff, 50 of who are expatriates.

The intended job cuts will affect the foreigners, whose positions will be downgraded and taken over by the locals, Mr Dhlomo.

He said the move was in line with the recent circular from the Labour Ministry, which required the reduction of foreign workers in all agencies in South Sudan.

He added that the restructuring was coming when MTN was grappling with the challenges emanating from the prolonged civil war.

Since 2013, dollar allocations to banks and forex bureaus in South Sudan have been dwindling, a situation that has been exacerbated by the war.

“The economic crisis caused by the conflict, has halted major projects such as building of 40 towers countrywide and sponsoring MTN8 Cup annually for at least three years,” Mr Dhlomo.

He said the company had spent $170 million on network infrastructure from 2014-2015 but had never made any profit since 2012.

“The most difficult event that happened in the life of the company was the devaluation of South Sudan Pound last year. As the telecom communication operator, we use equipment that we buy from overseas and we pay for that in dollars which cannot be recovered with local currency,” he said.

The devaluation has cost the company a lot and has reduced the number of customers by 10 per cent already, Mr Dhlomo said.

“If the situation gets out of hand, MTN may consider a temporary closure of its entire operation in South Sudan,” he said.

READ: EABL shuts down South Sudan depot after currency losses

ALSO READ: SABMiller to close South Sudan operations on low forex supply

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