MTN NIGERIA COMMUNICATIONS : MTN NIGERIA 2022 SUSTAINABILITY REPORT

Doing For

Tomorrow,

Today

MTN NIGERIA

Sustainability Report 2022

In This

Report

Table of Abbreviations

3

4	INTRODUCTION
About the Report	4
	Scope and Boundary	4
	External Verification	4
	Chairman's Statement	5
	CEO's Statement	6

9	COMPANY OVERVIEW
MTN Nigeria at a Glance	9
	About Us	9
	Business Model and Strategy	9
	Our Products and Services	10
	Our Telecoms Footprint	12
	and Coverage
	Our Distribution Network	13
	Industry Membership	13

Our Approach to Sustainability	14
Sustainability Highlights	14
Our Sustainability Strategy	14
Our SevenPillars Approach to	16
Sustainability Operationalisation
Materiality Assessment	19
Stakeholder Management	20
MTN Nigeria and the SDGs	24
Transition to the ISSB Sustainability
Disclosure Standards	25
Awards and Recognition	26

ECO-RESPONSIBILITY
27 ENVIRONMENTAL PILLAR	27
Climate Action at MTN Nigeria	27
Energy Management	27
Emissions Monitoring	28
and Reduction Efforts
Embracing Circular Economy	29
Supporting Nigeria's	29
Decarbonisation Efforts
Environmental Compliance	29

SUSTAINABLE SOCIETIES
30 CULTURAL PILLAR	30
Employee Profile	30
Labour Management	31
Freedom of Association	32
Diversity, Inclusion, and	32

Equal Opportunity
Training and Capacity Building	33
Employee Engagement	34
and Satisfaction

OPERATIONAL PILLAR	35
Customer Satisfaction	35
Digital Inclusion, Access	36
and Affordability
Customer Privacy	37
Data Protection, Network and	37
Physical Security Practices
Health and Safety at MTN Nigeria	38

SOCIAL PILLAR	39
Community Investments: Our	39
Approach to Social Development
MTN Foundation Initiatives	40
and Programmes in 2022
Financial Inclusion	45

46 INSTITUTIONALGOVERNANCE	PILLAR	46
Governance at MTN Nigeria	46
Sustainability Governance	48
Managing Risks and Opportunities	48
Ethical Conduct and Compliance	49

Anti-corruption and Whistle-blowing	49
Management of the Legal and	50
Regulatory Environment
Human and Digital Rights	50

51	ECONOMIC VALUE-ADDED
ECONOMIC PILLAR	51
	Economic Value Created	51
	Supply Chain Management	51
	Responsible Sourcing	51
	Technology for Transformation	52
	of MSMEs
	Our Tax Practices	52
	Value Added Statements	52
	Infrastructure Investments	52
	FINANCIAL PILLAR	53
	Market Presence	53
	Our Resilient Business Model	53
	Sustainable Profit	54

55	APPENDICES
SASB Index; Telecommunication Services	55
	GRI Content Index	61
	Assurance Report	67
	Assured KPIs	70
	Contact Information

Table of Abbreviations

ALTON	Association of Licensed Telecoms Operators of Nigeria
ATCON	Association of Telecommunications Companies of Nigeria
BTS	Base Transceiver Station
CBI	Convention on Business Integrity
CDSB	Climate Disclosure Standards Board
Co2e	Carbon Dioxide Equivalent
COSO	The Committee of Sponsoring Organisations
CSI	Corporate Social Investment
EPR	Extended Producer Responsibility
ERM	Environmental Risk Management
ESG	Environment, Social, and Governance
GCA	Group Culture Audit
GDP	Gross Domestic Growth
GRI	Global Reporting Initiative
GSMA	The GSM Association
HSE	Health, Safety and Environment
ICT	Information and Communications Technology
IFC	International Finance Corporation
IFRS	International Financial Reporting Standards
IP	Internet Protocol
ISO	International Standards Organisation
ISSB	International Sustainability Standards Board
LA	Limited Assurance

	Sustainability Report 2022 3
ITU	International Telecommunication Union
KPIs	Key Performance Indicators
LSW	Lagos, South West
MAN	Manufacturing Association of Nigeria
MMS	Multimedia Messaging Service
MUSON	Musical Society of Nigeria
NBDN	Nigeria Business Disability Network
NCC	Nigerian Communications Commission
NCCG	Nigerian Code of Corporate Governance
NECA	Nigeria Employers' Consultative Association (NECA)
NESREA	National Environmental Standards and Regulations Enforcement Agency
NGX	Nigerian Exchange Limited
NIN	National Identity Number
NPHCDA	National Primary Health Care Development Agency
NPS	Net Promoter Score
OHS	Occupational Health and Safety
OTT	Over-the-Top
PSB	Payment Service Bank
RCS	Rich Communication Services
RLP	Rising Leaders Programme
SASB	Sustainability Accounting Standards Board
SDG	Sustainable Development Goals
SEC	Securities and Exchange Commission of Nigeria
SMS	Short Message Service
SOHO	Small Offices/Home Offices
TCFD	Task Force on Climate-Related Financial Disclosures
TTSWG	Telecommunication and Technology Sustainability Working Group
UNGC	United Nations Global Compact

Introduction

About the Report

Scope and Boundary

The 2022 Sustainability Report of MTN Nigeria Communications Plc discloses the environmental, social, economic and governance performance from January 1, 2022, to December 31, 2022. The report communicates our progress and achievements on a broad range of sustainability issues during the period.

In the report, we also share our sustainability commitments along with our goals, plans and targets for the future. The report demonstrates our sustainability leadership reflected in our unique approach to achieving inclusive growth and creating value for our stakeholders. In addition, it lays out how we manage risks and opportunities, including the measures we take to achieve our sustainability goals.

The report highlights our stakeholders' expectations and the various engagement channels we leverage to elicit and address those expectations. These efforts are complemented by our materiality assessment process, which helps us to identify the issues that are significant to our operations and relevant to our stakeholders.

This report was prepared with reference to the GRI Standards. It incorporates methodologies and indicators from other leading frameworks, including the Sustainability Accounting Standards Board (SASB), while

Sustainability Report 2022 4

highlighting our commitment to align with the requirements of the International Sustainability Standards Board in our future sustainability reporting.

Also reflected in this report are our contributions to the Sustainable Development Goals (SDG) and the Paris Climate Agreement. Our performance in alignment with commitments under various local and global frameworks like the Nigerian Code of Corporate Governance, the United Nations Global Compact (UNGC) and the UN Universal Declaration of Human Rights are also captured.

Our approach to the disclosures in this report is anchored on the principles of accuracy, transparency and balance. We have presented our progress, challenges, and environmental and social impacts during the reporting period. Our stakeholders and the public can access additional disclosures in our 2022 Annual Reportpublished on our official website

External Verification

Deloitte & Touche conducted a limited assurance engagement on this report. This was carried out in accordance with International Standard Assurance Engagements 3000 (Revised) 'Assurance Engagements other than Audit and Reviews of Historical Financial Information' issued by the International Auditing and Assurance Standards Board. MTN Nigeria's approach to engaging external auditors for the performance of limited assurance services ensures that the Executive Management of the company approves the service, that the auditors can carry out the service, and that there is no interference with the independence of the auditors. The external assurance procedure includes interviews with relevant KPI managers and verification of related documents and data.

Introduction

Chairman's Statement

Dear esteemed stakeholders, I am delighted to present MTN Nigeria's environmental, social and governance (ESG) scorecard for 2022. It details our strategies, commitments, and the measures we have put in place to enhance our ESG performance.

The progress that we recorded in 2022 occurred within the context of several international and local developments that presented challenges and opportunities. Global recovery from the impacts of the COVID-19 pandemic was still in its early phase when Russia's invasion of Ukraine triggered new geopolitical tensions and disrupted the global supply chain. The impact of the disruption on food and energy markets accelerated inflationary pressures causing more suffering for vulnerable communities.

On the local front, Nigeria witnessed one of the most destructive weather events in recent years. The 2022 flooding, which affected about 27 states, resulted in over 600 deaths and displaced roughly 1.3 million people. It also disrupted economic activities, especially in the agricultural sector, adding to inflationary pressures domestically.

The impact of these challenges reinforced our commitment to address the issues that confront communities, as highlighted in the United Nations Sustainable Development Goals (SDG) and the Paris Agreement. In the year under review, we created more

opportunities for individuals, communities, and businesses, leveraging our innovative services and corporate social investments (CSI) and ramped up the adoption of sound ESG practices in our operations in line with our Ambition 2025.

We continued to expand our network infrastructure, enhancing our mobile and broadband connectivity and our ability to provide leading digital solutions for our valued customers. Consequently, we grew data subscribers by 15.3% and digital subscribers by 37.5% to 39.5 million and 10.3 million, respectively. We increased our 4G coverage by 8.8% to 79.1% of the population, enhancing the capacity of our 4G network to support the rise in data traffic. As a result of the infrastructure investments we have made, we became the first mobile network operator in Nigeria to roll out 5G network with our September 2022 launch.

In addition, we reached another milestone in our fintech strategy, which seeks to drive digital and financial inclusion in Nigeria as our MoMo Payment Service Bank (MoMo PSB) began commercial operations in May 2022.

We supported communities with significant social investments through several impactful projects carried out by the MTN Nigeria Foundation, which celebrated its 17th anniversary in 2022. We are guided by the SDGs as we invest to create a better today and a sustainable tomorrow.

We recognise the need to reduce our carbon footprints, and endorse global efforts to achieve net zero carbon emissions by 2050. As part of our Project Zero initiative, we are implementing measures that are helping to reduce our emissions as we push towards achieving net zero emissions by 2040. We have embraced Nigeria's decarbonisation as reflected in the Nigeria Climate Change Act and have

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begun integrating its requirements into our emission reduction strategy.

We operate in a pivotal sector to Nigeria's growth and development. According to the National Bureau of Statistics, the telecommunications and information services sector recorded a gross domestic product (GDP) growth rate of 10.72% and contributed 13.57% to GDP in 2022. As Nigeria's leading mobile operator, MTN Nigeria is committed to making investments that will catalyse growth and sustainable development. We will continue to support job creation, enable the transformation of Micro, Small, and Medium-sized Enterprises (MSMEs) and contribute directly to the

Dr Ernest Ndukwe, OFR

Chairman, Board of Directors

MTN Nigeria Communications Plc.

Introduction

country's revenue earnings through taxes while ensuring good return on investment for our investors and shareholders.

Our Board continues to provide leadership on good corporate governance and compliance practices. We continue to comply with applicable laws and industry regulations, maintaining zero tolerance for regulatory non-compliance. In addition, we continue to create an environment that encourages sound ethical conduct, diversity and inclusion, and respect for human rights.

The success of our business depends on robust Risk Management and the oversight function of the Board. We will continue to strengthen our processes to manage risks and seize opportunities brought about by changes in our operating environment.

As this report demonstrates, we will continue to leverage stakeholder engagement to guide value creation while providing our stakeholders with robust and trusted ESG disclosures. We note emerging developments in sustainability reporting, including the launch of the first set of standards by the International Sustainability Standards Board (ISSB), which seeks to provide a global baseline for sustainability disclosures for the capital market and investors. We will continue to actively participate as Nigeria moves towards early adoption of the standards.

At MTN Nigeria, we will vigorously pursue our commitment to integrate sustainability into our operations by putting ESG at the core of our Ambition 2025 strategy. This will make us a thriving business that creates value for all stakeholders.

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CEO's Statement

I am pleased to present MTN Nigeria's 2022 Sustainability Report to our valued stakeholders.This report discloses our progress in contributing towads the achievement of the United Nations Sustainable Development Goals (SDG) as we consolidate our leadership of Nigeria's telecommunications sector through stellar financial performance and strategic development of the business.

Driven by robust oversight of the Board, the visionary leadership of the Executive Management, and the strong dedication of our people, MTN Nigeria continued to deliver solid financial results. In 2022, our revenue grew by 21.5%, reaching N2 trillion, while our profit after tax rose by 20.2% to N358.9 billion, compared to N298.7 billion in 2021. The performance was driven by strong double- digit growth in data, fintech, and digital services and our cost-efficiency drive.

We recognise that our success goes beyond our financial performance. That is why we put the mainstreaming of Environmental, Social and Governance (ESG) standards at the core of our Ambition 2025 strategy. Consequently, we ensure the responsible use and protection of the natural environment, operating in ways that benefit our customers, employees, and host communities while continually improving our corporate governance practices.

Thank you.

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Introduction

Karl Olutokun Toriola

Chief Executive Officer

MTN Nigeria Communications Plc.

We employ our commitment under various local and global sustainability frameworks as we integrate ESG into our operations. These frameworks include the Nigerian Code of Corporate Governance, the NGX Sustainability Disclosure Guidelines, the United Nations Global Compact, and the UN SDG, among others.

We engage with our stakeholders through various virtual and physical c h a n n e l s t o u n d e r s t a n d t h e i r expectations and accelerate the mechanisms for addressing their q u e s t i o n s a n d c o n c e r n s . T h i s Sustainability Report is one of the channels we use to provide them with r o b u s t d i s c l o s u r e s o n o u r E S G performance while demonstrating how we are addressing some of their key expectations.

The communities within which we operate faced numerous challenges in the year under review. We see enormous value in addressing some of these c h a l l e n g e s t o e n s u r e t h a t t h e communities thrive as our business g r o w s . I n 2 0 2 2 , w e i n v e s t e d approximately N1.8 billion in corporate social investment (CSI) programmes through the MTN Nigeria Foundation, bringing our total investments to N25.7 billion since inception.

In addition, we leveraged our mobile and digital services to create value for communities. That is why we have continued to expand our distribution

channels to reach the underserved, narrowing the digital divide. In 2022, we reached broadband coverage of 87.9%, up by 3.4 percentage points from 2021. Under our rural telephony programme, we deployed 778 sites, bolstering our digital inclusion efforts.

Our ability to boost digital inclusion rests on our robust network infrastructure, and we will continue to make the requisite investments in 2022. We invested more than N504.3 billion in capital expenditure during the year to accelerate network expansion and enhance capacity. These investments positioned us to launch the 5G network in Nigeria ahead of other operators. We deployed 588 5G network sites in major cities across Nigeria's six geopolitical zones, bringing high-speed connectivity to 5G-enabled smartphones. We recognise the impact our investments make in creating economic opportunities and remain committed to boosting i n c l u s i v e e c o n o m i c g r o w t h . O u r technologies will transform businesses as they leverage our innovative suite of products for job and wealth creation. In this regard, we are confident that our MoMo Payment Service Bank (MoMo PSB), launched in May 2022, will be a game changer for financial inclusion efforts in the country. At the end of the reporting year, we recorded more than 223,000 active mobile money (MoMo) agents, while active MoMo users reached

LA

approximately 15 million , up 57.5% from the previous year. Transaction volume also increased to 282.5 million.

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Introduction

Our greatest asset is our people. We understand that to achieve our Ambition 2025 and continue providing excellent customer service, we require the best talents, good workplace culture, and the future skills development. That is why we work to attract and retain the right talent, creating value for them through benefits that will promote their well- being. We also support our people to develop skills through high-impact training.

In addition, we are committed to building a diverse and inclusive work environment. We made progress towards achieving our 2030 ambition of a workforce that is 50% female. We recorded 36% of women's representation in the workforce in 2022, up from 34% in 2021. Also, women's representation among senior management was 46%, while women's representation among Executive Management was 47%.

M T N Ni ge r i a i s a b u s i n e s s t h a t va l u e s environmental stewardship. We have embraced the global call to action on climate change as demonstrated in the Paris Climate Agreement. This is evident in our Project Zero initiative, a commitment to achieve net zero emissions by 2040. We recorded progress with our emission reduction drive as our scope one and two emissions decreased by 25% in 2022 compared to 2021. We will continue to push towards our net- zero target.

As a testament to the impact of our network infrastructure investments, innovative products and services, corporate social investments, compliance with regulatory requirements, and contribution through taxes, among others, MTN N i g e r i a r e c e i v e d s e v e r a l a w a r d s a n d recognitions in 2022. The awards include Most

Tax Compliant Company in Nigeria (Federal Inland Revenue Service); Most Compliant Listed Company on the NGX (Nigerian Exchange Limited); Employers Excellence Award (Winner in the Telecommunications Sector - Nigeria E m p l o y e r s ' C o n s u l t a t i v e A s s o c i a t i o n ) ; Telecommunications Company of the Year (Nigerian Marketing Awards); among others.

Our commitment to enhancing our positive impacts while reducing our negative impacts remains strong. While we understand that sustainability is a journey, we can assure our stakeholders of continuous improvement.

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Company Overview

MTN Nigeria

at a glance

About Us

MTN Nigeria is a subsidiary of MTN Group, a pan- African mobile operator that operates in 19 countries in Africa and the Middle East. We are one of Africa's leading mobile operators and providers of communications services, connecting approximately 77 million people in various communities across Nigeria with each other and with the world. Our nationwide network coverage, technical capabilities, and innovation have enabled us to maintain a clear leadership position since our inception in 2001.

Our belief is that everyone deserves the benefits of a modern, connected life and our strategic intent is to drive leading digital solutions for Nigeria's progress by delivering relevant, accessible, high-quality telecommunications solutions that put our customers in control.

During our more than 21 years of operations, we h a v e d e m o n s t ra te d e n d u r i n g i n d u s t r y leadership in coverage, capacity, and innovation while considering environmental, social, and

economic impacts. We have enjoyed steadfast support from our customers, for whom we have created value through our unique service offerings and solutions.

We are a mobile operator committed to increasing our positive contributions and f o r g i n g s o l i d p a r t n e r s h i p s w i t h o u r stakeholders as we seize the opportunities and confront the challenges that lie in the future.

Our values define what is important to us. They guide and inform our actions.

• Can - Do (optimism, future - focused, passionate, happening)
• Innovation (simplicity, imagination, insight, creativity)
• Integrity (solid principles, trusted, togetherness)
• Leadership (foresight, commitment, guidance)
• Re l a t i o n s h i p s ( te a m w o r k , f r i e n d l y, personal, warm, caring, connections)

Business Model

and Strategy

In line with Ambition 2025, our strategic intent is to provide leading digital solutions for Nigeria's progress based on our core belief that everyone deserves the benefits of a modern, connected life. We have identified four strategic priorities under Ambition 2025. These include building the country's largest and most valuable platform business, driving industry- leading connectivity operations, creating shared value, and accelerating portfolio transformation.

In pursuit of our strategic priorities, we will leverage:

• Leading customer experience;
• Best talent, culture, and future skills;
• Value-basedcapital allocation;
• Best-in-classtechnology platform; and
• Integrate leading ESG practices with focus on eco-responsibility, sustainable societies, sound governance, and economic value.

Our strategy takes cognisance of the fact that our success is linked to the development of the Nigerian economy and the prosperity of the communities we serve. Our connectivity and platform solutions have enormous potential to close gaps in access to connectivity, deepen Nigeria's digital economy, boost job creation, and expand socioeconomic opportunities.