Good afternoon to everybody. My name is Thato Motlanthe. I look after investor relations for the MTN Group, and it's my pleasure to welcome everybody who's come to the Innovation Centre at 14th Avenue, and also to welcome all of the people who have joined on the various platforms that we have, particularly the MTNers across our markets, obviously, who make the results that we've put out quite possible. I think let me just kick off with the usual housekeeping items that we have. Firstly, you should be seeing on the screen our standard disclaimer and safe harbor statement, and that covers this presentation as well as the event that we have here today. Secondly, if you're in the room, you should be able to latch onto our Wi-Fi, and again, the details should appear on the screen now. We'll hold it up for a second or two.
And then lastly, for those on our social platforms, you can use the hashtag #MTNAnnuals23 , MTNAnnuals23, and our X handle is @MTNGroup. Actually, the most exciting for those who've actually joined us today, we do have refreshments outside, just in case we forget to remind you at the end, and that's just a little bit of an incentive and to thank you for coming through. But if I turn to our year in review, I mean, I think we've navigated a couple of challenging years over the past couple of years, but I think, if challenging was a person, it would look a little bit like 2023. Now I won't be a spoiler for Ralph and Tsholofelo's presentation, but I think given the extreme volatility that we've seen in our external environment, you'll see that the financial performance that we're putting out is actually fairly, fairly, encouraging.
So having seen the environment, and I think the flip side of it is that if resilient was a person, it would probably look something like MTN, and in particular the many faces across our markets, as I said, who make this possible. And I think they've shown extreme dedication, innovation. Be a spoiler for, for Ralph and Tsholofelo's presentation, but I think given the extreme volatility that we've seen, in our external environment, you'll see that the financial performance that we're putting out, is actually fairly, fairly, encouraging. So having seen the environment, and I think the flip side of it is that if resilient was a person, it would probably look something like MTN, and in particular the many faces across our markets, as I said, who make this possible.
And I think they've shown extreme dedication, innovation, and commitment to the cause, and it's a very big, big reason why we're still standing today. Of course, the stakeholders have kind of walked the journey with us. It's been a rough ride. We do appreciate you sticking with us. And I think it's, it's also appropriate just to give a shout-out to our leaders, some of whom are in the room today, including the board. We have given us a bit of a steady hand of guide of guidance and leadership as we've navigated this tough time. So as I mentioned, today's presentation will provide a little bit of colors to how we've performed. Obviously, there's a lot of complexity, so we thank you for, for your attention as we go through before we get to the Q&A.
And I think if you look at the running order of our presentation, it'll be the usual one that we have. First of all, some highlights and operational strategic review from our Group President and CEO, Ralph Mupita. Then Tsholofelo Molefe, our Group CFO, will come up and give us a financial overview, and then Ralph will come back up to give us some thoughts on outlook and priorities. We'll then open up to Q&A in the room, and those who are on the webcast, please send through your questions, and we'll read them out for you. Yeah, so I mean, I think we can get into the run of the presentation, and I think with that, it's my distinct pleasure to welcome to the stage our Group CEO, Ralph Mupita.
Thato, thanks very much, and, extending my own, welcome and thanks for all the shareholders, investors, and broader stakeholders who are joining us here on 14th Avenue. For those who are not 14th Avenue, the room is full. It hasn't been this full, I think, probably since COVID, so good to see stakeholders here. And also, thanking all of our broader stakeholders who are joining us on various media platforms. And also, like, Thato, wanting to thank the MTNers who always give, Tsholofelo and I the pleasure of presenting the results that we are going to share in the next, 45 minutes or so. I also want to, you know, acknowledge that, our SENS and financial results came out. It's quite a lot to read, so trust that, you've managed to get through most of it.
But what Tsholofelo and I will try and take you through are the salient items that give you a sense of how the year was in terms of operational and financial performance, but also, importantly, to give you our sense of the outlook and how we think we will navigate the outlook that presents itself in 2024. So going straight through to the highlights, wanting to talk about four main themes. The first one has been the point that Thato has raised, which is really that we navigated a very challenging external environment, principally driven by three factors. The one is that we saw inflation remaining quite elevated in most of our markets, and that found its way into the costs, the operating costs, the interest costs on the debt. Tsholofelo will cover that in more detail.
Secondly, currency devaluations, most notably in Nigeria, where the naira was around 462 -odd in May of last year. There was liberalization of exchange rates in June, and by the year-end, if you look at the naira, was over 900. So closing rate was almost 90% 97% down to prior year. So a significant impact that works its way through the P&L and into the balance sheet and more around that. With regards to currencies, we had paucity of foreign currency in some of our main markets, making it very challenging for us to upstream dividends and management fees, and as many of the investors will recollect, is that we did take scrip dividend both in Ghana, as well as in Nigeria in anticipation of the difficulty of upstreaming cash out of those markets.
The final point is really geopolitical tensions that we see more broadly across the world, but particularly in our region in Sudan. Sudan has been in a situation of conflict since April of last year, and that impacted us, and the dynamics of that, whether it's in service revenue, in impairments, and the group effective tax rate. Tsholofelo will take us through all of that. Now, notwithstanding those challenging macro, I think we had a very decent and solid commercial execution of the strategy. When we look at usage growth, we saw very healthy usage growth across our markets. Notwithstanding the SIM registrations that we had in key markets such as Ghana and Nigeria, we navigated those through to still deliver on pleasing usage, user growth and usage growth.
If you look at the underlying volume of traffic across our markets, in the two big drivers of growth going forward, data, exclude the JVs that we have, data growth with data traffic growth was about 35%, and the fintech transactions. Our markets, notwithstanding the SIM registrations that we had in key markets such as Ghana and Nigeria, we navigated those through to still deliver on pleasing usage, user growth and usage growth. If you look at the underlying volume of traffic across our markets, in the two big drivers of growth going forward, data, exclude the JVs that we have, data growth with data traffic growth was about 35%, and the fintech transaction volumes were about 32%, signaling a very healthy set of demand for the services that we offer to our customers.
The third area was really around financial resilience, and we've done a lot of work on the balance sheet over many years to ensure that the business has financial resilience, first to absorb shock, but also to be able to take advantage of the opportunities that we may see in the market. Last year was a year of absorbing the shock, and we drove the expense initiative program that we had set out. We've targeted ZAR 7 billion-ZAR 8 billion of expense efficiencies, and we're well ahead of our target for last year, delivering ZAR 2.6 billion against a target of ZAR 1.5 billion that we set for ourselves last year. Then when you look at leverage and liquidity, all looking in very good shape. The fourth area is really around strategic priorities, executing on our strategy in line to what we've committed to stakeholders.
On the fintech side, concluded two agreements with Mastercard. The commercial agreements and the minority investment, definitive terms were concluded at the beginning of this year. On the fiber side, we're beginning to push ahead with the structural separation. We are working on the East to West with Africa50 and started the carve-out of some of our markets, starting with Zambia last year, you know, structuring a sale and leaseback between Bayobab, with the Zambia Opco. And the final point is really around portfolio optimization. We have now exited Afghanistan. We announced our Middle East exit in 2020, and said the phase one would be focused on exiting the consolidated subsidiaries of Syria, Yemen, and Afghanistan. And with the conclusion, you know, of the deal with the M1 affiliate, you know, we are now out of phase one, and they've completed that.
So very good progress, and we'll cover some of that in a bit more detail, in slides to come. I won't dwell too much on the financial outcomes, because Tsholofelo will take us through that in a lot of detail, but pick up some of the key KPIs. Service revenue at 13.5%, broadly in line with our medium-term guidance. Sudan, as I mentioned, had ongoing conflict in the market, and that detracted from overall service revenue growth at the group level by 0.6% at the group level. So you could have added that back in, and the group ex-Sudan grew at 14.1%, which would have been, within our guidance range. Data and fintech obviously were, you know, growth drivers. We must never forget voice. Voices grew 3.3% and still delivers a healthy contribution to our total earnings.
On the earnings side, you'll see then EBITDA on a constant currency basis, you know, grew, you know, quite pleasingly at 9.8%. Let's round it up to 10%. So a lot of the activity in the P&L happened below EBITDA, and Tsholofelo will take you through, you know, both the tower lease liability-related costs, and some of them are non-cash, unrealized losses, as well as finance costs. That's where a lot of the strain in the P&L. But above the EBITDA, a very solid performance, you know, on growth. And by the time you get to adjusted headline earnings again, relative to the prior period, notwithstanding the tough macro, we delivered ZAR 12.03 on an adjusted headline earnings per share.
I won't cover the balance sheet items, which I raised a little bit earlier on, but I think at the Holdco level, pleasing to see that the mix of debt is quite favorable. We're down to 23% of the debt stock at the Holdco level is in USD. We've got a small stub of 2024 bonds and the 2026 bonds to deal with. The rest of the debt is in ZAR. So that profile of managing our liability and currency mismatches relative to our currencies we earn revenue, that has improved substantially. Our target was to be below 40%, and, you know, we're down to 23%. And much thanks to the finance team for delivery there. Then on returns, just focusing on three KPIs. Operating free cash flow before spectrum payments, just under ZAR 46 billion.
and again, part of the narrative that Tsholofelo and I want to cover is that there are, you know, cash and non-cash items that are through the financials. But when you're looking at operating free cash flow, it's fairly robust given the headwinds that we saw. And the ROE is up at 24.4%. As Tsholofelo will show, we've seen a very steady improvement on ROE over the last five to six years. And the board did declare a final dividend for 2023, that'll be payable, distributable in April of this year of ZAR 3.30, in line with our minimum guidance that we announced last year of ZAR 3.30. More of that a little bit later. Moving on to the operational strategic review, and as usual, starting with South Africa. In South Africa, there are two main stories in the year under review.
Firstly, load shedding and the impacts of load shedding in the year. We had actually more load shedding days last year than the year before, coming to Thato's point around a challenging macroeconomic environment. But we're very pleased that the SA Network team and the SA team more generally has done a great job improving network availability in the year. We invested ZAR 10.1 billion of CapEx ex-leases, and of that, ZAR 2.6 billion was spent on network resilience, ensuring that we have, you know, backup power across our sites. And we ended the year ahead of schedule with a network availability above 95% in total. And for the sites that we had deployed, the investment in, actually, we were above 98%.
So, you know, a lot of work done to deal with the network and ensuring that we're resilient as we anticipate that we could have more load shedding that could go all the way up to level six, and, you know, potentially above. So it was the right call to make that network investment resilience, and we're seeing the benefits of that as we lap, you know, last year. The first two months of the year have shown us the encouragement that that investment will yield fruit and returns for our investors. The second point is really around the consumer under pressure, and in particular, the consumer under pressure in the prepaid segment. And we've seen sequentially an improvement on the prepaid side, exiting Q4, you know, much better than we had started Q3, in terms of, in particular, voice prepaid. And that trend we've seen come through.
I think what would have been a detractor in the overall service revenue that MTN delivered of 2.5% is some of the base effects that we've seen, particularly on consumer postpaid side, as well as on wholesale. You all remember that in 2022, for much of the year, Cell C was under a cash basis of accounting, and in Q4, we went to accrual accounting that brought a lump of revenue into Q4 of 2022, creating a bit of a base effect for the wholesale. But we can cover a bit more of that in Q&A if you want to go there. But as I said, we've seen encouraging exit out of Q4 in terms of the South African business. If we go to Nigeria, Nigeria have obviously released results already.
Karl is in the room today to take some of your more difficult questions around Nigeria. But again, the real issues were the macro. Inflation, you know, spiking up into the mid-20s in the year, and then the naira devaluation, which was very sharp, and fed its way, in particular, into the operating costs, particularly network operating costs. We also had to contend with the NINs and SIM registration in the year. And at the beginning of last year, we were dealing with, in Nigeria, the naira redesign, which there were cash shortages which affected our ability to ramp up both on the GSM side as well as on the fintech side. But we are pleased with the sustained investment that we made into the network. We spent about ZAR 12.7 billion of CapEx investment.
We secured some additional 2,600 spectrum, which really helped us to deal with the surge in data usage. And actually, it will help us quite a lot in the year ahead. That 2,600 spectrum will enable us, with the lower CapEx envelope, as we look at 2024, to sustain, you know, sufficient capacity to deal with the growth that we see. On MoMo PSB, we did the booster acceleration plan in quarter four, and we saw pleasing results, particularly around the ecosystem build-out as well as ending the year with active wallets at 5.3. It's a little bit lower than we had anticipated or would have liked, but notwithstanding all the challenges we faced, particularly also at the end of Q4, having to do, you know, a revised registration process in Nigeria, we are encouraged by the momentum that we're starting to see in that business.
Moving on to the markets business, the other third of the company, again, very pleasing results, we're seeing in both the SEA and WECA regions. Data and fintech are sustaining the growth there. You see service revenue all in the mid-teens. Data revenue growth also kind of mid-20s for both SEA and WECA. Very pleasing growth in markets such as Uganda. In the SEA market, they came out with their results pretty recently. Again, sustained growth on both data and fintech. You see that SEA's contribution of fintech service revenue to total is about 28%, showing what the potential is over the medium term as more of our customers on the GSM side also take on the fintech services. Also, on the WECA side, Ghana, very pleasing set of results.
Ghana faced a lot of headwinds the last two years, so it's quite pleasing that our team have navigated the last two years of headwinds, firstly from the declared SMP with all the restrictions that come with being declared the dominant operator, but also the macro environment, that, you know, came through in Ghana. But pleasingly, we're starting to see the inflation decelerate into the mid-20s, having been as high as in the early 40s, in periods past. On the MENA side, obviously, MENA, from a consolidator point of view, was basically Afghanistan and Sudan. Then, in Sudan, as I mentioned, really, really challenging operating environments. And actually, we're running the business out of Egypt; the majority of the team is out in Egypt, because the conflict doesn't enable our team to be based back in the headquarters at Khartoum. So very, very challenging operating conditions.
Tsholofelo will take us through the financial conditions there. And then in our investment in Irancell, you'll see that the earnings grew at just under 28%, and the Snapp business there continues to grow, just shy of 5 million daily rides in Iran, having been up from 3.7 in that market. If I move on to the fintech ecosystem, again, the ecosystem continues to develop and expand, very pleasingly. The service revenue growth of just shy of 22% was underpinned by the transaction volume that I mentioned earlier on, but also the transaction value. We're seeing close onto $272 billion of transactions through the platform, cash-in-cash-out, transfers, P2P, but also the advanced servicings starting to contribute. Most pleasing has been the merchant ecosystem development, which has expanded very healthily, you know, during the period. Two big partnerships that we secured in the year.
The first one was Ericsson, where we extended our partnership, to include a focus on our advanced services. Our advanced services in the year actually grew, as Tsholofelo will talk about, close to 55%. So that's payments in e-commerce, BankTech , and remittance are coming off relatively low bases but growing exceptionally fast. So the contract we've entered into with Ericsson, which came, with a bit of CapEx into last year, so you'll see our CapEx envelope is slightly more elevated than, you would have thought. About ZAR 38 billion ended up at ZAR 41 billion. That's a one-off CapEx, in recognition of the new contract that we've signed, will enable us to push ahead with advanced services and take a lot of our solutions up in the cloud. The second one we've spoken about quite a bit, which is the Mastercard, relationship.
Commercial execution now underway in the SEA region. That's where we're going to start things, but ultimately take it across all our markets, as well as the minority investment that they took at up to $200 million for a valuation of $5.2 billion. We will, as I'll mention later, that we're continuing with our work towards flow now a lot more in terms of minority investments into those three platforms. Coming into the shared value, again, I won't cover all the detail that we have, you know, on this chart. Much of this detail is in our slides that we shared earlier today, but a few big callouts on our decarbonization journey on Scope One and Scope Two, and these are measures that are on the SBTi framework. So we're down 13.1% when we exclude the estate tower sold to IHS.
So that's very good progress, in the period that we've just reported. Good progress on broadband as well as diversity. And on both, for sure, we can always do better, so we're pushing ourselves. But, we've also been able to see that the average cost to communicate, in our across many of our markets is down approximately at 9%. And, in that EVA framework of the value that we have been able to deliver across our markets, a pleasing $159 billion, relative to the same period last year. Before I pass on to Tsholofelo to take us through the financials, and I'll come back to discuss outlook and priorities. Again, we're constantly, marking ourselves against the targets that we set ourselves. The one key area, that's in red there is really around SA service revenue.
As I said, the main area of detraction there has been around the base effects that we saw, particularly around wholesale, you know, given that we moved Cell C to the accrual base of accounting as well as the new contract that we've signed. And some of those benefits for Cell C would have come through in Q4 of last year. Most pleasing in SA, where we've had a real, real challenge for two years plus, has really been about the consumer prepaid, where, as I mentioned earlier on, we're starting to see improvement, particularly around voice. Quarter four, voice deceleration was minus 9% on prior year. In the previous quarter, it was minus 12%. So we're seeing a steady improvement with regards to that.
Tsholofelo will take you through more of the financials, and I'll be back to cover the outlook, as well as our priorities. Thank you.
Thank you very much, Ralph, and a very good afternoon to everyone joining us for the results today. And I think, as Ralph shared with you, that, you know, we operated in a very tough macro context. So I'm really encouraged by, you know, the financial performance that was resilient, you know, under these circumstances. And it really gives me pleasure to present to you these financial performance under review. So before I take you through the details of our financials, I think it's important to just highlight some of the significant items that have impacted on our results. Firstly, as we indicated, FX volatility in the markets. We operated in a very challenging macroeconomic environment. We saw elevated levels of inflation, and this really had a significant impact on our operating costs in particular.
But also, the naira devaluation had a significant impact on our losses on our finance charges with effective losses of about ZAR 21 billion, which I will share with you later. In addition to that, as we experienced high inflation, we had a blended average inflation for the group of 16.7%. And this also impacted on our operating costs, including our tower lease expenses as well. We also had to apply hyperinflation to our Ghana results this year. We reported previously as well that MTN Nigeria's results included a restatement of 2022 on 2022 financial results.
And this really reflected cumulative net effects of restating the lease liabilities, the deferred tax liabilities, the right-of-use assets as well as the profit after tax from a Nigeria perspective, and therefore having an impact on group as well as we translate in our reported currency, which is in ZAR. At high level, these impacts on group result was on the 2022 opening balances of retained earnings, which was restated lower by about ZAR 2.4 billion, and on the 2022 profit after tax restated by about ZAR 407 million. And in terms of 2022 earnings per share, we saw an impact of ZAR 0.51 per share. Lastly, we also recorded the asset impairments, in particular on Afghanistan, of ZAR 900 million, which was a remeasurement of non-current assets held for sale.
We also saw an impairment on MTN Sudan as well, ZAR 700 million, particularly due to the damage to the warehouse with the conflict happening there, but also the hyperinflationary impacts as well. So these items had obviously had an impact on our expenses, our EBITDA, as well as headline earnings per share. So if I can move on to the details of our results, we're starting with the salient points on our group income statement. You'll notice that we delivered service revenue growth in constant currency at 13.5%, which was in line with our medium-term guidance. It is important to note, however, that we were able to deliver service revenue growth if we exclude the impacts of Sudan at 14%.
EBITDA before one-off items increased by almost 10% in constant currency, and this was really driven by solid top line across most of our markets. However, we saw high OpEx growth, as I indicated, really putting pressure on our EBITDA margins, which saw margin dilution of about 1.2 percentage points to 41.5% in constant currency. I think Ralph mentioned it from a reported perspective, EBITDA margin at 40.9%. On reported currency basis, you'll see depreciation also increasing by almost 20%, with the effects of hyperinflation from Ghana, but also the growth was really due to CapEx additions, including accelerated 4G site rollout in Nigeria, spectrum and license spectrum acquisitions during the year, as well as the depreciation of SA towers' right-of-use assets, which were not depreciated last year as they were held for sale.
On net finance cost, you will see a significant increase of 113% to ZAR 39 billion, and this was really impacted by the forex losses in Nigeria of about ZAR 21 billion, and I'll unpack this later on in detail. As a result, you'll notice our tax expense therefore declined by 55% due to lower profits, where we saw profit before tax declining by 77%. The reported group effective tax rate, however, increased to 66% this year compared to 41.7% in 2022. This was mainly due to much higher non-deductible expenses that we saw in Sudan, but also unrecognized deferred tax assets from the assessed tax losses, as well as the withholding taxes.
But if we look at it from a normalized basis, our group effective tax rate was at about 39.5%, which is really in line with our guided mid- to high-30s, sorry. If we look at the non-controlling interest, we also see quite a significant swing there. The interest from non-controlling shareholders reduced to ZAR 75 million due to significant reduction in profits, mainly in Nigeria as well as Sudan. At the bottom line, the underlying performance was really resilient with adjusted headline earnings per share down 9.5%, and I will unpack these movements in later slides.
Moving on to group service revenue, we continue to see steady growth on our voice with voice up 3.3%, largely Ghana and Nigeria growing at double-digit, underpinned by the execution of pricing as well as CVM initiatives. But this was really set off by the decline we saw in South Africa of 12% on voice. Excluding these impacts from South Africa, the voice revenue was about 6.3% up. Data revenue, which is the largest contributor of our group service revenue, grew by 23% year-on-year, driven by strong data traffic growth in our markets, which again is supported by the continued investments we make on our network. The other callouts here that are important is the growth that we see on fintech, 22% year-on-year, as well as the wholesale revenue of 21% year-on-year.
Before I continue with other elements of our performance from a group perspective, I'll just touch on South Africa and Nigeria, which are two largest markets. Starting with South Africa, as indicated, we saw 2.5% growth in service revenue with voice down 12%, data at 7% particularly. We also saw very strong growth coming through from fintech at almost 15% year-over-year and wholesale increasing by 28%, largely from the national roaming deals that we have from Telkom as well as Cell C. On the total expenses side in South Africa, we saw 7.6% year-over-year with cost of sales at 3%, largely driven by device and commission costs as South Africa continued to drive channel expansion.
OpEx in South Africa went up by about 13% 13.5%, and the main drivers there was largely network costs, which grew by about 23% and really impacted by load sharing impacts as well as the electricity tariff hikes. Almost most of the expenses were well managed, however, with salary costs growing below inflation at about 4.4%. The results of these high costs in South Africa specifics, particularly with pressure on, you know, top line on revenue was a reduction of 4.4% in terms of EBITDA with margin dilution of 3.6 percentage point to 35.9% in EBITDA. And this really excluded the gains on disposal of towers that we reported on previously. South Africa, as Ralph indicated, has spent ZAR 10 billion in CapEx.
In addition to, you know, the network resilience problem, they continue to roll out the 3G, 4G, and 5G sites with CapEx intensity excluding leases at 19.5%, overall. If I can then move on to Nigeria very briefly, most of you will have seen the results that we presented indeed delivered in Nigeria on the 29th of February. So Nigeria again delivered another solid performance with a 22% year-on-year growth on service revenue, which is really in line with their medium-term target with voice, data, as well as digital being the main drivers of growth. So as you can see, 10% growth on voice with data at about 39%. And, specifically, if you look at other, which is really ICT, enterprise, and bulk SMS growing by about 25%. With total expenses in Nigeria went up by about 32%.
Although cost of sales was 18%, it was below Nigeria's overall inflation, but also below service revenue growth. However, there was quite an increase on the operating expenses in Nigeria of about 39%. And this was, as we indicated, largely driven by the network operating costs, which make up the bulk of the cost, which is really due to CPI impacts as well as effects of devaluation and site rollout on the BTS lease rentals. We continue, however, to look at ways to manage the margin pressure that we are seeing in Nigeria with the cost efficiency program that we have. So as a result of this, we have seen again a margin dilution in Nigeria to 49.7% relative to 53.3% last year.
CapEx spent in Nigeria was about ZAR 12.7 billion, largely driven by accelerated rollout of 3G, 4G, as well as 5G sites as well with CapEx intensity excluding leases at 17%. If we can move on to fintech performance, as I indicated, we saw 22% growth in the period in line with our efforts to scale up the mobile financial services business, as Ralph indicated. Withdrawals and transfer services, which still make up the bulk of the contribution to group fintech service revenue, grew by about 19% and 29% respectively.
I think very pleasing was the strong growth that we saw in advanced services revenue, which overall grew by 55% year-on-year, with payments and e-commerce growing by 40%, as well as bank tech and remittance, those still nascent, growing by about 99% and then 73.5%, respectively. As you can see on the right-hand side, the basic services contribution to fintech revenue remained stable at about 57%. However, advanced services have grown; advanced services contribution to total service revenue has grown from 16% to now 20%.
So if I go back to the performance of the group overall, turning to group expenses, as you can see, total expenses was up 15%, to ZAR 127 billion, with cost of sales up 11% year-on-year, largely driven by commission cost in our GSM, fintech, as well as digital businesses. We also saw an increase in interconnect and roaming cost as well, largely due to increased traffic volumes, but also impacted by the effects of devaluation mainly in Nigeria as well as Ghana. Operating costs from a group perspective increased by 19%, and the main drivers of these, as I indicated, was network utilities. As you can see, network utilities contributes 19% of the total cost, and it grew by 36%.
Two-thirds of the network expenses actually was driven by Nigeria in particular due to the CPI as well as effects, devaluation impacts, but also the increased site rollout. South Africa also contributed to higher network operating costs due to load shedding, impacts as well as increased power costs. And some of the in other markets, the main cost pressures really came from high energy cost overall. OPEX growth was also driven by staff growth of 16%, which makes up 12% of the total expenses. But really, the main drivers here was the additional resources we added to scale up our platform businesses, in particular, fintech and the bank tech businesses and others, but also annual salary increases were in line with inflation. As we indicated, our blended average inflation was 6.7%-16.7%, in the year.
But we also had increases in our IFRS 2 charge relating to provision for the share allocation that relates to our PSP share scheme. Other costs which make up 17% of the total expenses were really the marketing and advertising expenses relating to our MoMo business, professional fees for the strategic projects that we are executing, as well as some of the litigation costs. So given these macro, you know, impacts that we are facing, we do remain committed to focus on efficiencies to support our earnings as well as returns in the near to medium term. I think Ralph shared that we realized ZAR 2.6 billion worth of efficiencies, and this was ahead of our ZAR 1.5 billion target for the year.
42% of those savings were recorded in South Africa, and this was followed by Weka, SEA, and then Nigeria as well. If we look at it by area, most of these in 2023 came from general and administrative functions, at 56%. We also saved about 8% from network and IT, which contributed about 32%, then 14% coming from the balance of which was sales and distribution as well as marketing. So you will notice on the right-hand side that our total cost to revenue ratio also went up to 58.6% as a percentage of revenue, from 57.4%, which really reflects the pressure that we are feeling from the macro impacts.
As we announced previously, we are busy with phase two of our expense efficiency program, which we call EEP 2.0, and we have plans to save additional savings of about ZAR 7 billion-ZAR 8 billion over the three years beginning from 2024. We've identified a number of areas which are, among others, a review and negotiation of our major contracts, including our tower lease contracts, decommissioning of legacy IT, and simplification of those contracts, optimization of commission structures, as well as distribution channels. In a nutshell, that is the plan from a cost efficiency perspective.
If we move on to finance cost, you'll notice that our net interest paid increased to ZAR 8.2 billion, and this is due to increased finance charges, mainly from, you know, interest rate hikes across markets, but also additional borrowings in head office, Nigeria, as well as Cameroon. The increase in finance lease cost as well was mainly impacted by the sale and leaseback of towers in South Africa, and also we had tower renewal, tower contract renewals in Cameroon and Ivory Coast. So the underlying net finance cost increased to ZAR 15.9 billion. As I indicated, you will see that Forex losses in the period amounted to ZAR 23 billion, of which ZAR 21 billion of that came particularly from Nigeria due to the FX losses following the devaluation of the Naira.
So as you can see from the table, this really had a major impact with net finance cost overall more than doubling to ZAR 39 billion in the year. Looking at the headline earnings per share analysis, firstly, just a reminder that for the 2022 figures have been restated for the Nigeria FX losses that as we indicated. So on this basis, your attributable earnings per share declined by 17.5% to ZAR 2.77, reflecting the lower earnings that I unpacked earlier on. So this outcome was also impacted by the impairment of assets of ZAR 0.40 per share and the impairment losses I mentioned relating to Afghanistan of ZAR 0.50 per share. And after adjusting for these items, you'll notice that the basic headline earnings declined to ZAR 3.15 by 72% year-on-year.
So the main impact on basic headline earnings was really the hyperinflationary impacts, ZAR 1.50 per share in the year, but the significant impact being on the IFRS losses of ZAR 7.15, of which ZAR 5.93 of that came from Nigeria. So if we do adjust for all these non-operational items, we then get to your adjusted headline earnings per share of ZAR 12.03, which is a decline of 9.5% . So moving on to CAPEX, as Ralph indicated, we capitalized ZAR 41 billion in the year excluding leases, which really included ZAR 2.7 billion of the ECW capitalized cost, with CAPEX intensity at 18.6%. If we exclude the ECW cost, CAPEX was ZAR 38 billion, which was really in line with the guidance that we gave to the market.
When we look at it by region, 31% of the CapEx came from Nigeria, 21-25% was from South Africa, and then the balance came from a combined 35% for SEA as well as the MEA, WECA region. If you look at it from a portfolio perspective, we spent 72% toward network investment as we focused on investing in faster growth areas with the balance going toward IT CapEx as we continue to support the investment we are making on our platform businesses. Moving on to our cash flow analysis, you'll notice that our operating free cash flow declined by 6.4% year-on-year to ZAR 45.9 billion, and this was mainly due to lower reported earnings than in 2022 and higher payments for leases and CapEx of ZAR 7.8 billion and ZAR 39 billion respectively.
This is before the payments that we made for spectrum and licenses, during the period of ZAR 7.4 billion. So when you look at other effects, we had inflows from financing activities of about ZAR 8 billion, largely from increased borrowings as well as localization proceeds in Ghana and Nigeria that we had earlier in the year. Look, we also made interest payments as well as taxes of ZAR 13.5 billion and ZAR 15.8 billion, respectively. And we also had an outflow from our investments of about ZAR 5.2 billion, and this really related to restricted cash mainly in Nigeria on the letters of credit, but offset by an inflow from fixed deposits of about ZAR 1.3 billion.
So these movements in total on our cash flows resulted in a positive free cash flow generation of ZAR 11.5 billion before we made dividend payments to group shareholders and minorities, before the effects of movement. If I may just spend time on the leverage and liquidity, which are important, very briefly. As Ralph indicated, our balance sheet remains very strong with group net debt to EBITDA 0.4, which is really well within our covenant limits of 2.5x . The slight regression from last year was really the effects of movements. Wholeco leverage at 1.4x , which was within our guided range of less than 1.5x , and we are really pleased with the significant improvement that we've made since 2019 at 2.2x .
Holdco leverage was, however, negatively impacted by the effects of FX losses from our eurobonds and also reduced cash balances from lower cash upstreaming during the year. Other impacts were really drawdowns from head office facilities, particularly to support the SA resilience program. In the year, you'll recall that we had indicated we settled about $353 million from our maturing 2024 bonds in line with our guidance to the market. Now, this brings in total the amount that we've been able to early redeem on our eurobonds so far to $1.2 billion. Accordingly, we've managed to reduce our dollar debt now to 23%, which is really way below the target we had given ourselves of 40%, keeping it below 40%.
Our overall liquidity headroom remains very healthy at ZAR 44 billion with ZAR 16.9 billion in cash balances and committed and drawn facilities of about ZAR 27 billion. We are able to upstream this year ZAR 13.4 billion in total, of which ZAR 9 billion of that came in the second half of the year. You may recall that we had opted for scrip dividends in Nigeria as well as Ghana for FY 2022 final dividend, and of course this had an impact on overall upstreaming for the year. But overall our leverage and liquidity are in good shape and really underpinned by the disciplined capital allocation framework that we continue to execute. Before I hand over back to Ralph, just to touch on briefly our ROE development, you will note that the Nigeria FX restatement positively impacted the 2022 ROE moving to 24.2%.
Our reported ROE stood firm despite lower earnings but improved to 24.4%, an improvement of 0.2 percentage points, mainly due to foreign currency translation reserves from the Naira devaluation, but also the revaluation reserve due to the decline in the IHS share price had the impact. So we are really pleased to see this overall ROE evolution over the past five years, which we continue to improve towards 25%, which is our guidance to the market. Ladies and gentlemen, I will now hand over to Ralph. Thanks.
Thanks very much, Tsholofelo. She's taken us through. Hopefully, hopefully, she's given you comfort in terms of the numbers. As I said, the SENS and the apps are very detailed. As usual, I'm sure you'll have questions for our IR after today. But maybe I should spend the last five minutes really looking at the outlook as well as the priorities that we have and, you know, covering the aspects of our investment case and our medium-term guidance. Just on the context in terms of how we look at 2024, a couple of key messages is, you know, we think that, the headwinds are going to remain relatively elevated. We think inflation will remain relatively stubborn. We have been encouraged by inflation, in particular in a market like Ghana where it's come down.
But when we look at Nigeria, we think we are going to see inflation, as we look at, you know, bank data and other data, that it will remain elevated in some of our key markets. Exchange rates, you know, the naira's being volatile. The actual direction of it, strengthening or weakening, remains relatively uncertain, at this particular point in time. So we have to plan and operate in Nigeria with a couple of scenarios, you know, having base case stress and shock cases so that we can actually run our business within that scenario. We do think that foreign currency will remain, you know, quite challenging to access, you know, particularly for management fees and dividends. And obviously, the impact on lease liabilities, you know, will be something that we will have to manage, and we are engaging, you know, with the various tower companies.
And then from a regulatory perspective, I think it's going to be important for us, as we engage with the regulators more broadly around, you know, how do we offset some of these costs which are working their way into network operating costs, you know, with, tariff increases as well as price optimization that we will have to manage within the portfolio of products that we take to market. And localizations will become remain critical for us as we navigate this year. As I mentioned, Ghana, Cameroon, as well as Uganda remain markets where we believe, the execution of those localization agendas becomes, you know, super important. And obviously, the geopolitical environment, continues to be, relatively uncertain both at a global level and in some of the regions we operate in. Sudan is a case in point.
You know, the end of the civil war there does not look like it will happen anytime soon. So overall, our message is that we think the headwinds, you know, will remain, and point out the Naira volatility, and the uncertainty in that direction. But given that as a backdrop, you know, how do we think about the business? I think the first thing is that the case for the growth that we see across our markets over the medium to longer term remains intact. And this is a chart that we've shown you for several reporting periods that looks at traffic growth for data on the left-hand side of the chart, as well as fintech transaction volumes on the right-hand side of the chart.
And we've been tracking this since COVID to see the kind of average consumption per quarter of data traffic as well as fintech transaction volumes. Pre-COVID, on the data traffic, 282 PB. Today, as at the end of last year, it's 1,394 PB. Fintech, 1.3 billion transactions in a quarter is 4.4. So the demand for our services across our markets remains very, very strongly intact, notwithstanding the challenges that we're facing in some of our key markets. And, and therefore, we believe that the investment case that we've positioned over the last couple of years, which is that there is a growth story that underpins MTN driven by demographics, driven by the market positions that we have, number one and number two in all our markets, mostly number one network positions, on an NPS level across our markets.
And the scale and the balance sheet strength should give us this attractive profile. We've spent a lot of time looking at our capital allocation framework in the course of last year to see if it's still appropriate within the context of the macro, which has changed quite, you know, fundamentally, particularly on the areas around inflation and currency volatility. And we've come up with a conclusion that, certainly for now and in the near term, that framework and that batting order, you know, certainly remains the right one. We've engaged investors. You know, we've spoken to us about buybacks, whether buybacks should rank higher in our capital allocation framework. And we felt that where best to put our capital is to fund the organic growth that we see.
As for next year, sorry, for this year, we're planning to spend between ZAR 35 billion and ZAR 39 billion of CapEx, to sustain our market positions and keep our networks very well invested as well as our platforms. The point around stabilizing leverage remains important. We still've got a bunch of eurobonds, that we have on the holdco balance sheet, and we want to, you know, settle those, you know, over the near term. As part of our mix of total shareholder return, we think that the dividend remains an important part of our own investment case. Therefore, selective mergers and acquisitions rank slower, as does share repurchases and special dividends. So importantly, we're keeping that framework, as it has been, but having spent some time to assess if there are parts that do need to change.
So with that as context, what are our priorities, you know, in the near term? Firstly, to sustain operational momentum. So in South Africa, completing the network resilience remains a priority. We spend ZAR 2.6 billion. We'll spend somewhere between ZAR 1 billion-ZAR 1.5 billion, you know, by the end of Q2. Charles is pushing his team to complete at the end of Q1, but, you know, give it some headroom there. So we'll spend another ZAR 1 billion-ZAR 1.5 billion to complete that program where all our sites have got the required resilience of battery backup power, solar where it makes sense, and static and mobile generators where required to ensure the network availability remains above 98%. We are seeing some improvements on the prepaid side and looking to sustain those.
There's work obviously to be done on the postpaid side as well, and sustaining our momentum on enterprise. On health, so, will also be key. In Nigeria, it's really all about recovering, both, particularly the negative equity position that we have and finding a medium-term solution that gets the business back, towards, an acceptable earnings profile. The FX resets in the tower contracts as well as CPI escalations have really worked their way into impacting, the margin of that business. The top line is actually of that business is very healthy. Karl and team are launched a set of, new products in Q4, and we're seeing, you know, decent top line growth. We still are, you know, focused on ensuring that we have some relief as an industry in Nigeria for, voice and data.
There hasn't been any increase, but as you can see from Tsholofelo's slide, quite a substantial increase in network operating costs. We need to be able to fund those, also partially through these price optimization and tariff increases. The second priority is really accelerate our portfolio platform strategy. Fintech ecosystem, now it's the time to really push hard, on the advanced services. We've got that partnership. We're actually, looking to launch, as we end up in quarter two or early on in quarter two, on the issuance and acceptance side, and the remittance, opportunities, one that we've agreed to work on with Mastercard as well.
The fiber cost separations, accelerating those, and looking at completing our East to West link that, you know, we've partnered with Africa50, part of African Development Bank to roll that out, also to help with the latency, you know, of our networks across markets and also to be able to monetize there. We are focused on, you know, further, you know, minority investments in the platform, including fintech. So we are also, you know, engaged on that as we speak, and that will be something that we update as we move ahead. The third area is really around capital and expense efficiencies. The EEP 2.0 that Tsholofelo spoke about, ZAR 7 billion-ZAR 8 billion of expense efficiencies over the next three years that we're working through and will report back on. I spoke about the tower contracts. CapEx efficiency, you know, initiatives will continue.
Part of why the CapEx envelope is a bit lower this year than last year actually is that we're getting, you know, better price books from, you know, the vendors. We really, really pushed them hard for better price books, and hence we can, you know, feel confident that the ZAR 35-39 envelope will be maintained. And then, on balance sheets, to Tsholofelo's point, you know, cash upstreaming, we're not anticipating cash upstreaming in from Nigeria in the course of this year. The focus of this year really is to restore both the earnings profile and the balance sheet strength. So the capital upstreaming that we're seeing will be from South Africa and largely from the rest of the markets business, which underpins pretty much the dividend guidance that we have given, which is ZAR 3.30 for FY 2024 payable in 2025.
That's how we have framed, you know, that, that guidance, for dividends. And we have to manage our debt profile. The debt at a holdco level has gone up to 1.4x . So we, you know, we do anticipate some pressure at that level, but at the hold at the group leverage, I think, as Tsholofelo said, you know, we're very comfortably there. And with that as a backdrop, you know, how are we thinking about the medium-term guidance? So the medium-term guidance has been maintained pretty much as is. We've just changed one KPI, which is really around fintech. Fintech grew at 20 just under 22% for the year that's just passed. We are calling out that over the medium term, the next three to five years, Serigne and team will really drive, with our strategic partners, accelerated growth.
We're pushing that to the high 20s%-low 30s% as where you should see the fintech growth in the coming years, you know, up from the 22% that we would have recorded for FY 2023. Everything else stays the same. As I mentioned, ordinary dividend guidance for 2024 is ZAR 3.30. So it's flat on the year prior, but we felt that it was important to keep it flat, mindful of the uncertainties in the environment. But the ZAR 3.30, you know, is a level that the board feels it can actually, you know, call out to our investors as something that we believe we can deliver. So with that, thanks very much for listening to Tsholofelo and I. I think we will take questions. I don't know who's managing the Q&A.
Thato, do you want to walk us up on stage? Yep, please.
Okay. We're aided in our Q&A efforts with Charles, Dineo, and Karl who are in the room. So any of your difficult questions from those businesses, we'll pass them on to the three.
Yeah. So thanks, Ralph and Tsholofelo, for the overview. As you said, a lot to unpack. We are going to have questions for the next 20-25 minutes. So apologies in advance if it's too short, but we will be engaging with a lot of you over the next couple of weeks in any case. So I think as usual, we can start in the room just to see if there are any hands for questions. Pressure. And then, Nkululeko.
Thank you. Hi. It's Preshendran from Nedbank. Congratulations firstly on the results, Tsholofelo, Ralph, and team. I've got three questions if I can. Firstly, I think one for Tsholofelo, my traditional one. How much cash was upstreamed in the last quarter from Nigeria, and at what FX did you get the cash out at? And then coupled with that, can you give us a sense of how much is still in Nigeria that's waiting to be upstreamed to group? Second one for Charles, congratulations on the network uptime. But it looks like your service revenue growth that last quarter, 2.2%, was kind of low. So just want to get more color on that because your wholesale roaming, your wholesale revenue is up 28%, and your network uptime was up considerably from the year before.
So still, I'm not getting why it didn't translate to a stronger service revenue growth than the previous quarter. And then the last one, for Ralph, just some clarification on this Mastercard transaction because when I read the SENS, it says that they will invest up to $200 million with a $5.2 billion valuation. Can you tell us what was the actual stake that they're taking? Because on those numbers, that means they can take up to a 4% stake. And if I look at what they did with Airtel Africa, three years back, they did a similar 4% stake for half the valuation. So, I mean, I would have expected with the commercial agreements that they've taken that they would have maybe, you know, wanted to put more of an equity stake.
Are you looking for further partners in the fintech business, or is there an optionality for Mastercard to go beyond that? Thanks.
Yeah. Can we start?
Can we start with the first question? We've had no upstreaming from Nigeria in the second half of the year. There is an interim dividend, as you recall, that was declared, and it's about just over NGN 80 billion.
So no upstreaming in the quarter. So can't give you an average exchange of what we expect for. Charles? Can we have a mic for Charles? You need to come to the front.
Please come up, please. But let me see you.
Yes. First, thanks. I mean, look, first point that I want to make is that the service revenue profile that you see, please look at it in comparison to the overall market performance and also start to look at Q3 to Q4. If you look at Q2 to Q4, you can see a proper incremental growth. Where the difference is that in 2022, our postpaid and wholesale business, we had all these base effects that came into quarter four. Now, on a year-on-year comparable basis, the number looks more smaller. But if you remove and normalize for that, you're sitting with a 3.9% year-on-year growth.
But I think what to see better growth, just do Q3- Q4 on prepaid and then do Q3- Q4 on postpaid, you'll see there's a significant jump in terms of the performance of the business just as we promised. I think it's just distorted largely by the base effects completely. Thanks.
Yeah. On your Mastercard question, yeah, the investment works out to that four percentage points that you raised. I think we've been clear in our communication that we're open up to investment with strategic partners that can help us accelerate the business up to 30%. So, you know, to the point, you know, would we be open to more partnerships and more sell down in that business? The answer is yes. And, you know, we are progressing with various discussions in that round. You raised the point about valuation versus Airtel. And I can't comment on that. And obviously, it's a different timing when they did that, and it's a different business.
And I think the nature of the stake, you know, was underpinned by a, an event, a kind of capital markets event, if you look at their financial profile, and we didn't have a similar kind of put option structure to that investment, at the 200 level. So yes, you know, we will continue to anticipate, as I said earlier on. We're also looking in the platform such as fiber, as well as on the Ayoba side.
Thanks. Nadeem, I think you had your hand up. And then, Charles. Yep.
Can I sit down? I'm going to stay.
Good afternoon. Just two questions from my side. First one just for Ralph, a strategic question. Just on your batting order in terms of the capital allocations framework, just want to understand. I mean, you know, you've got some quite extreme potential moves in key markets in terms of macroeconomic parameters. You know, why would you not consider curtailing some of the CapEx until you have more certainty, you know, whether some of the remedies, like the price increases and so on, are coming into those markets? And then just another quick one for Dineo. If I recall correctly, in H1, South Africa, PBT was down more than 50%. I think it was largely because of base effects with regards to the sale of the tower deal and the depreciation associated with that.
We'd like to just get an update as to how that's trending and where you see that going from here on. Thank you.
So the first question's for me. The second, to know your pickup. Yeah. I mean, on the capital allocation framework, I mean, as we guided that, you know, we spend in total CapExes, ex-leases, ZAR 41 billion. We're guiding lower, ZAR 35 billion-ZAR 39 billion. So you can put it in the middle of that and say you want to compare 47, sorry, 41 with 37. I mean, obviously, we'll need to assess in Nigeria our ability to actually spend that CapEx. So there is a Nigeria number, obviously, in that ZAR 35 billion-ZAR 37 billion. And in the event that, you know, there are much stronger headwinds, you know, we might end up in a place where it's actually lower.
What we also want to avoid is that, you know, if we unless we think the headwinds are permanent if you think the headwinds are permanent, then you take a very different strategic, you know, position. We've said that the structural changes that are happening in Nigeria around floating the currency, removing the full subsidy, medium- to long-term are all the right things to be done. But then we look also into the Nigerian market in particular, and we're seeing data growth. As you saw, data traffic growth is, is booming. And, you know, we've also been saved a little bit in Nigeria by the decision we make to get the additional 2,600, which is actually giving us a lot more capacity to take on the growth. So we've got to kind of invest through the cycle at a sufficient amount for us to maintain our number one positions.
Right now, we think that, you know, the changes are painful in the near to short term, for sure. But the medium to long-term is we've got to sustain a level of investment. If you pull out, as we did, you'll remember 2015, 2016, we pulled and slowed down in Nigeria. We lost the plot to Etisalat. It took us three years to gain back that advantage. We don't want to make that same mistake of, you know, pulling the brakes so hard on CapEx that you lose the momentum for a multi-year period. And no matter how much you invest, it takes you a long time. So that's the take we're having, you know, on Nigeria in particular, in CapEx. The South African CapEx, I think, is proportionate to the opportunity and the resilience that we need to do and in all the other markets.
But it's a great question. But as I said, the CapEx envelope actually is lower forecasted for the year ahead. And that's actually been a little bit of a change for the last three to four years. Dineo?
Okay. So to.
To the question on profit before tax , yes, we did sustain the pressure into half two. So basically, there were three factors. One is that we had to accelerate our debt funding from the group in order to fund resilience. As Ralph mentioned earlier, we spent about ZAR 2.6 billion on resilience in 2023. So we funded that from group. That increased interest rate. Obviously, because interest rates were higher in the current year, the impact of that came through as well. The second factor was then on depreciation, and the lease impacts with the sale and leaseback arrangements that we have with IHS. So remember, it impacts depreciation and finance costs as well in terms of IFRS 16 accounting. And then the last point was then forex pressure. You may remember that about half of our CapEx is exposed to forex, predominantly the euro.
Then we also have enablement in terms of devices, exposure to USD. So those devaluations impacted forex charge as well. So the pressure on PBT continued into half year. Yeah. Thanks.
Thank you. We'll start with Jono and then to Myra.
Thanks very much for the opportunity to ask questions. It's Jono from Absa. Just two from me, please. The first one for Charles. Just on XtraTime and the increase, up to about, I think it was 36%. I mean, what are your ambitions for increasing that further, or is this sort of the level that you're looking to keep it at? And then the second question is just on the options that MTN Nigeria has available to solve its insolvent status, and whether this could include a rights issue, and how MTN Group would think about this given its ambition to further localize its stake.
Should I go?
Yeah. You can go.
Yeah. Look, I mean, we remember we came from 23% on XtraTime penetration. Now, we're now 36%. So peer to peer, I think the likes of, you know, the competition around 43%-42%, we think that the normal optimum rate would be 36%-38%. We think that if we can operate in that sort of, you know, benchmark, we should be able to sustain it. Thanks.
Yeah. I think some of our peers are in the 40s. So, Charles is trying to make sure that, you know, we don't have growth all fully funded by a time advance. You know, on your question, Jono, we have an EGM in Nigeria on the 30th of April where, as a business, we will come to shareholders. I mean, that's MTN Nigeria. I'm speaking on their behalf, to talk through the actions and plans that the company is taking to restore its negative equity position. So I don't want to preempt that by giving you any specifics. Suffice to say that, you know, we're looking at the full range of strategic options that resolve that position but fundamentally resolve it in a sustainable way over the medium to longer term. We're not looking for any kind of shortcuts.
We're looking for solutions, you know, that you know funded. You are aware of what causes the strain. It's, you know, dollar exposures on the balance sheet. It's lease liabilities. It's our ability to get price increases as well. All of that gets put into the mix. And then obviously, importantly, for us to take a view on where the naira is going, you know, ultimately, because it's very sensitive to naira movements, you know, and a few hundred naira there, here or there changes, you know, what you need or must do. But I would ask you to kind of hold back a little bit. And on the 30th, you know, we do have a responsibility. We've already put out on the NGX statement that we will have an EGM on that specific feedback to shareholders on the 30th of April.
Thanks, Ralph. Myra.
Thank you. The question is on the expense efficiency program. You know, phase I was ZAR 7 billion-ZAR 8 billion, and it was in constant currency, I remember as well. It was loosely a third in South Africa, third in Nigeria, and third the rest of the opcos kind of thing, right? Now, the new version is another ZAR 7 billion-ZAR 8 billion, you know, from 2024 for three years. How are you thinking about the breakdown there? I mean, to the extent you can you're happy to talk about it.
Yeah. Maybe just a correction. I mean, our target in phase one was ZAR 5 billion, but we achieved over there I think we achieved ZAR 6.4 billion. ZAR 7.8 billion is the, you know, phase II, over the three year. And, you know, we obviously have various initiatives for each of the markets. I think, suffice to say that we still continue to, focus on network, expenses, in particular, you know, negotiation of, contracts with major vendors, including, tower contracts, but also looking at, you know, legacy IT. But I think by, you know, default, given that the two markets that are, large in the in the portfolio is MTN South Africa and Nigeria, you're likely to have the bulk coming from there. But all the other markets are coming to the party.
So, I can't give, you know, specific numbers as to which markets, but all of the operating companies are coming to the party, including the group functions as well.
Thanks, Tsholofelo. So question up at the top.
Thank you. Nathi from TechCentral. My first question is with regards to partnerships with satellite broadband providers. How much was spent on this in the last reporting period? What's the timeline on these kind of providing value in terms of the coverage that they extend for you? The second is on the fintech side. Last month, BankservAfrica launched a TCIB platform for regional instant payment clearances. There are similar initiatives in the eastern and western blocks of the continent. Where does MTN see itself playing within those ecosystems?
All right. Satellites, I see I've got Mazen in the room. Save myself from speaking. Mazen has been, spending a lot of, time on satellite satellite partnership. What I can say is we're not spending a lot of money at the moment. So it's not amounts of money that, you know, we would be reporting. But we've done a lot of exploration, with the LEO, you know, potential partners. And Mazen, you want to give an update?
You answered the question. So we are exploring different opportunities, all of them at the same time, to leverage this new technology. So far, there has not really any specific spend. Our aim to really explore the revenue share model with the potential partners. And definitely, that will come probably during the near future when we'll announce accordingly. So far is the partnership model that we are exploring with an aim to have a revenue share in mind. Thank you.
Then on the payment side, Serigne, you want to comment? You can just pass on the mic to Serigne behind you. Serigne, I told you to sit in the front, sir. He didn't listen.
Come, Tsholofelo. Yes, just to say that, interoperability that is about interoperability. And, interoperability is in the heart of our strategy. So we are integrated to most of those initiatives when it is in our operations in the countries where we are operating. So, those ones that you just gave the name, we are integrated to them, and we work with all of them. And it helps us actually to develop our ecosystem and, to have more partners connected to our systems.
Thanks, Serigne. I think there was another hand.
Thanks. It's Stuart Mansfield from Investec. Just a question with regards to the hedging approach and the risk management approach. For example, the currency. I think you mentioned with the naira depreciation, financing costs increased by about 113%. And you mentioned scenario planning and stress testing. And just wanted to get your views on hedging some of that currency risk equally for the euro and for the dollar, equally for the interest rates, inflation being, obviously quite high at the moment and, interest rates potentially staying higher as well, your views on hedging, interest rate risk. And also, you mentioned for the, the PSP long-term incentive scheme, the increase in the IFRS 2 expense, and equally your views on hedging the equity, in that space. Thank you.
Do you want to go for that?
Yeah. So, so I mean, I think in a market like Nigeria, if we start there, there aren't any, you know, huge opportunities from a currency perspective, for any hedging given, you know, the shortage of hot, hot liquidity. But I think what we do, obviously, is, when we look at, for instance, our capital expenditure, we try and, you know, front-load it, you know, in anticipation of further devaluations. So that's what we've done in the past. But as much as possible, we try, as well to localize, a lot of the expenses, even with some of the, you know, major vendors that, that we have. I think on the interest side, in South Africa, Dineo will probably talk more to, you know, what they're doing from an FX perspective.
I think on the interest rate sides, I mean, we try and balance between fixed and floating, obviously mindful of, you know, the cycle from an interest rate perspective. We have considered things like interest rate swaps, but we are very cautious around, you know, those instruments because in a benign interest rate environment, you've got to be careful that you are not locked in. So we obviously have, you know, from a policy perspective, a very clear view about, you know, the mix of fixed to floating. And that's how we manage it. Dineo, do you want to touch on your hedging strategy?
Sure. For SA, so what we do in SA is that we do take out collar options, and we derivative account for those. Going forward, we'll start with hedge accounting just so that we can protect the income statement impacts. But currently, we derivative account for the options that we take out. And two-thirds of our interest of our debt is floating rate, and one-third is fixed rate. So in that way, we're able to just hedge that rate as well. Thanks.
Thanks, Dineo. A couple of the questions did overlap with the webcast, but let me ask one or two from there. Why have you not been able to get price approvals in Nigeria for so long? Please unpack the process that is being followed at the moment and how you progressed. What needs to happen to get it over the line?
Yeah. Let's get Karl all sitting quietly there.
Hi, everyone. Charles and I are dressed identical. No. Look, I think it's been a variety of reasons. First, it was a political transition. Through that political transition, there was a delay in the appointment of key members of the government, specifically the EVC of the NCC and the Honorable Minister, and then some time for them to settle down. We've communicated in absolute clear terms the need for a price increase as much for us but much more for the smaller players in the markets who really have a severe sustainability issue. The NCC committed to undertake a cost study. We believe that's well progressed. It's very hard to make a promise to say when exactly we are going to be able to get those price increases.
But I think the urgency is crystal clear to everyone in the government, not just the industry players, the Coordinating Minister of the Economy , the Central Bank , the FIRS head, etc. So we continue to be very hopeful that it's going to happen soon. We did do some price adjustments in the month of October, which was part of our momentum, particularly that you saw in quarter four. And those were approved by the regulator. But we think it's pretty damn close. Thank you.
Thanks, Karl . Maybe the last question. Why is fintech growth so sluggish in Nigeria, and what needs to happen to get it going strongly? There are a couple of people who asked that question.
Okay. So I think there's a multitude of issues here. First of all, Nigeria is a fundamentally different fintech market than the rest of Africa, the rest of MTN, of course, particularly when they started the journey around mobile money. Countries like Ghana started in 2009. And the first few years were actually sluggish. So there's significant competition from existing banking and fintech players, the Deposit Money Banks , particularly for digital customers. We've been putting the groundwork in place. We've pretty much executed that now. We've focused on building the ecosystem around agents and merchants. And you'll see quite a bit of momentum. And we've built the wallet ecosystem. We're now 5.5-odd million customers as at the end of the year. So it's been about building the basics. It is now time to accelerate along that journey. We have a digital offering.
Our app is now at the very worst case, at par with what you get in the rest of the industry. Now it's just execution boots on the ground. It's a dual strategy focusing on the urban center with digital solutions and on the rural centers where people are not banked at all. We're just going to continue plowing. It's going to take time. We've always known that. It's a long-term game. But we're building the ecosystem and getting the wallets active. Thanks.
Thanks so much, Karl . I think we're going to wrap it up there. Just a reminder, refreshments outside. We're going to ask Ralph to just give some closing words. And then I'm going to ask for two more of your minutes. There's a little bit of a video that we're going to play after Ralph closes.
Yeah. Thato always makes me do this, closing. I think I'd close it with my Outlook and Priorities section. But suffice to say, you know, thanks very much for taking the time to spend with us today. As Thato said, we are on the road, you know, talking to investors and stakeholders more broadly for the next couple of weeks. And just to capture some of the key points that are raised again, we are anticipating, you know, continued headwinds in some of our key markets. But we see these as cyclical rather than structural. And because we see the structural opportunity remaining intact across the business, we are investing into the cycle. We have to manage some of the near-term challenges that we see. But we think that the business remains actually underlying very robust and actually growing very well.
If you work through Tsholofelo's P&L and you look at the cash items or the non-cash items, the significant non-cash items there, when you look at, you know, FX losses, ZAR 23 billion through the P&L, you know, for the group, it's a significant number. And a lot of those are unrealized losses related to lease liabilities, that we have, particularly in a market like Nigeria. So we will work through resolving those issues. But we remain very convinced of the investment case, very convinced that our capital allocation framework is, the right one for us to be able to deliver value for shareholders over time. And, thanks very much for engaging with us today. And look forward to seeing many of you on the road the next couple of weeks. Thank you.
Thank you very much, Ralph. Just in case you missed the presentation, this is a brief summary. Hopefully the music gives you a little bit of an upbeat feel.