The Nigerian telecom industry has experienced a significant setback as foreign investment declined by 87% in the first quarter of 2023, compared to the previous quarter. This drop is revealed in the Capital Importation data released by the National Bureau of Statistics (NBS). Additionally, it represents a 62% decline when compared to the investments recorded in the same period last year, amounting to $57.79 million.

These declining investment figures come at a time when Nigeria is implementing the Nigeria National Broadband Plan (NBP 2020-2025), aiming for a 70% penetration rate by 2025, which heavily relies on foreign investments.

Experts in the industry emphasize that the Nigerian telecom sector requires a minimum investment of $3.4 billion in fiber infrastructure to achieve the set penetration target.

While the country’s economy has experienced a general decline in foreign direct investment (FDI) since the onset of the COVID-19 pandemic in 2020, the telecom industry has been consistently witnessing a decrease in investments over the past five years.

Engr. Gbenga Adebayo, Chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), cites multiple taxation as a major deterrent for further investments in the telecom industry. Telecom operators currently face a total of 39 taxes and levies, with various charges introduced by different levels of government. This undefined tax regime creates challenges for planning and projections in the industry, discouraging potential investors.

Echoing these concerns, Engr. Ikechukwu Nnamani, President of the Association of Telecommunications Company of Nigeria (ATCON), highlights the instability in the country’s forex market as a significant discouragement for foreign investors interested in Nigeria’s telecom sector.

“It has been estimated that the country would require $100 billion in investments in the next 10 years to bridge the existing infrastructure gap in the telecom sector, but where is the money going to come from? The exchange rate situation in Nigeria is of serious concern for foreign investors, they are not sure of what the situation would be by the time they want to repatriate their returns.

“Their returns on investments could be halved due to the fluctuations in the exchange rate. If we want to see the investors, we have to first address the foreign exchange situation,” he said.

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