Foreign Investments in Telecoms Plummet by $99M – NBS

Foreign investments in Nigeria’s telecommunications sector plummeted to $14.4 million in the third quarter of 2024, representing an 87% decline from the $113.42 million recorded in the second quarter, according to the National Bureau of Statistics (NBS).

This $99.02 million drop reflects a significant reduction in capital importation, which refers to the inflow of foreign funds or investments into Nigeria’s telecommunications sector. Such investments encompass all forms of foreign capital brought into the country to support business ventures in this vital sector.

In its capital importation report released on Friday, the NBS highlighted that this figure represents a 77% year-on-year decrease compared to the $64.05 million recorded in the same period of 2023. The downturn underscores the ongoing challenges faced by the sector, including infrastructure deficits and high operating costs, despite its critical role and growth potential.

Notably, the sector experienced an impressive surge earlier in 2024. In the first quarter, capital importation reached $191.5 million—769% higher than the $22.05 million recorded in Q1 2023, and surpassing the total foreign investments of $134.75 million for the entire year of 2023. In Q2 2024, investments stood at $113.42 million, marking a 339% increase from the $25.81 million recorded in Q2 2023.

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The sharp decline in Q3, however, highlights persistent challenges, including foreign exchange constraints, policy uncertainties, and the urgent need for infrastructure development. The sector also faces high operating costs driven by rising inflation, despite its substantial contributions to Nigeria’s GDP and its provision of critical services to millions.

Key industry stakeholders, such as the Association of Licensed Telecom Operators of Nigeria (ALTON) and the Association of Telecommunication Companies of Nigeria (ATCON), have called on the government to address these pressing issues. They warn that failure to act could jeopardize the sector’s long-term sustainability.

These groups have also advocated for a tariff increase to offset the high operating costs. ALTON Chairman Gbenga Adebayo recently stated that “current pricing structures are inadequate and unsustainable. Service providers cannot continue to operate under these conditions, especially when the cost of delivering services exceeds the charges.” He cautioned that many telecom operators might not be able to sustain subsidized services, risking the entire sector’s stability if immediate corrective measures are not implemented.