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Foreign investments in Nigeria’s telecom sector peak at $304 million in half-year 2024 

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The Nigerian telecom sector has seen an improvement in foreign direct investments this year as it attracted a total of $304 million in the first six months of this year.

Going by the National Bureau of Statistics (NBS) data, the sector has more than doubled the $134.75 capital importation recorded in the full year 2023 with the six-month record of 2024.

This is coming after years of consistent decline in investments even with a gaping infrastructure gap requiring billions of investments to bridge.

The NBS data showed that the sector attracted a $191.5 million capital inflow in the first quarter of this year, marking a significant 769% increase compared with $22.05 million received in Q1 2023.

In Q2 2024, FDIs in the sector stood at $113.4 million. While this is lower than the inflow recorded in the preceding quarter, it represents a whopping 339% increase over the $25.81 capital inflow recorded in the same period last year.

However, stakeholders in the telecom sector are not excited by the development yet. According to them, a lot still needs to be done by the government on the policy front to sustain the current trend and reverse the losses of the past years.

Specifically, Mr.Wale Babalola, a consultant in the telecoms market, reported investments in the first six months of the year are still quite insignificant to drive the growth sector currently needs.

Yes, it’s good that the sector is doing better than last year and to an extent, the last two years, but that is not enough to bridge the existing infrastructure in the sector.  

“Besides, many investors are still watching to see how the government will handle several policy issues still hanging. one of which is tariff regulation. Any country that wants to attract investors should be able to assure returns on investments.  

I don’t think that exists right now in the telecom market with the regulator preventing the telecom operators from reviewing their pricing to adjust for inflation and the rising operating costs,” he said.

For the Executive Secretary of the Association of Licensed Telecommunications Companies of Nigeria (ALTON), Mr Gbolahan, Awonuga, the issue of forex instability is still a major problem that needs to be addressed to encourage more investments in the telecom sector.

“Whatever we are seeing now may be a flash in the pan until the industry challenges are addressed. Issues of Right of Way charges are still there, likewise multiple taxation and above all the forex instability that continues to affect the operators’ ability to import equipment,” he said.

The telecom industry report for 2022 published last year by the Nigerian Communications Commission (NCC) shows that total investment inflow to the industry in that year stood at $399.9 billion.

Meanwhile, realizing that investments into the sector have not been coming it ought to be, the government is now spearheading a national fibre project aimed at bridging the infrastructure gap and enhancing broadband access across the country.

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