The National Bureau of Statistics (NBS) has disclosed that foreign capital investment in the telecommunications industry rose by 725% in 2019 from the $114.43 million recorded in 2018; which was the lowest annual investment in the sector in more than five years.
NBS report disclosed that in 2019, when the telecoms industry experienced a significant 725% increase, about $829.62 million was invested into the industry, increasing the foreign capital to $944.05 million.
The telecoms industry in 2018 attracted $87.25 million in Q1; $11.12 million in Q2; $11.42 million in Q3, and $4.64 million in Q4. But in 2019, the industry enjoyed a boost in the first quarter of 2019, as foreign investors invested $32.35 million in Q1; $4.5 million in Q2; N886.03 million in Q3, and $21.17 million in Q4.
The decline in the 2018 foreign capital investment made the telecoms industry fall behind banking, financing, services, production, agriculture, trading and oil and gas sectors, all of which recorded more foreign capital.
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However, telecoms industry moved to fifth position after an impressive inflow of foreign capital investment in 2019. This positioned the telecoms industry behind the banking sector which had $7,658.49 million; financing which attracted $6,281.21 million; services with $5,335.30 million, and production, which attracted $1,297.32 million, in the same year.
Why the investment increased? The 725% increase in foreign capital investments in 2019 was driven by the procurement of equipment. The purchased equipment were not readily available in the country. Note that public listing on the Nigerian Stock Exchange (NSE) had also occurred in 2019, with MTN Nigeria and Airtel listing their shares.
Also, during the periods when mergers and acquisition occur in the sector, there is often huge capital inflow into the country.
Worth of telecoms to Nigeria’s GDP: MTN, Airtel, Globacom and other telcos contribute over N6 trillion to Nigeria’s Gross Domestic Product (GDP) each quarter annually despite poor power supply, multiple taxation and insecurity that have eaten into their revenues.
The number of active mobile subscribers climbed to over 184 million in Nigeria. The likes of MTN and Airtel have their highest African subscribers in Nigeria, boasting of over 55 million and 35 million respectively. The domestic network rival, Globacom, accounts for over 29.2 million subscribers.