The Nigerian government has unveiled plans to introduce sweeping reforms in the telecommunications sector, building on the sector’s impressive performance in the first quarter of 2024, which saw a record-breaking influx of $191 million in foreign direct investment.
According to data on capital importation released by the National Bureau of Statistics last week, the $191 million foreign direct investment in the telecoms sector during the first quarter of 2024 has already exceeded the total FDI for the entire year of 2023.
Minister of Communications and Digital Economy, Bosun Tijani, expressed confidence in sustaining the momentum, highlighting that the government’s reforms aim to foster inclusive growth and development in both the digital economy and the overall economy.
“As we start the second half of the year, I’m looking forward to building on this momentum, supported by the necessary reforms and policies that President Bola Tinubu is putting in place to stimulate inclusive growth in the digital economy and the broader economy,” the minister said in a statement obtained on Monday.
The minister noted that the telecom sector, a longstanding pillar of the country’s economic progress, was driving growth and propelling the country forward.
He attributed the growth to confidence in the sector’s potential and the hard work of ICT stakeholders.
“This growth in FDI is about confidence in the potential of our sector and a reflection of the hard work that all ICT stakeholders have put in to ensure that we reverse the slowdown in our sector so that it remains a catalyst for growth,” Tijani averred.
However, the sector faces challenges, such as multiple taxation and instability in the foreign exchange market, which have discouraged further investments.
Pundits believe that to sustain the growth of the sector and attract more FDI, the government needs to address these issues and create a more conducive environment for investors
In 2023, telcos paid N2.4tn tax to the Nigerian government, according to the Groupe Special Mobile Association.
The two biggest operators by subscriber base in their respective financial reports declared losses.
In its first-quarter 2024 financial report, Airtel revealed a significant loss of $151 million, while MTN Nigeria reported a loss of N137 billion (approximately $294 million) in the full year 2023.
Tony Emoekpere, President of the Association of Telecommunications Companies of Nigeria, warned that if the current economic challenges persist, telecom operators may face significant difficulties in remaining operational by the end of the year.
“Telcos have been running at a loss, even though they may be reluctant to disclose,” the ATCON boss said.
