Nigeria’s telecommunications sector attracted a total of $153.5million capital importation in Q2 2022. While this came as the highest inflow into the sector in the last 6 quarters, the figure also surpassed the $107.46 million recorded by the sector in the full year of 2021.
According to the Capital Importation data released by the National Bureau of Statistics (NBS), the Q2 figure was also a 165% growth over $57.79 million attracted by the sector in the first quarter of this year.
Foreign investments in the sector are, however, still too low to meet the infrastructure needs of the country, especially with the ongoing implementation of the Nigeria National Broadband Plan (NBP 2020-2025) with a target of 70% penetration by 2025. Industry experts say the sector will require, at least, $3.4 billion in investments in fibre infrastructure to meet this target.
While there had been a general downtrend in FDI into the country’s economy since the outbreak of the coronavirus (COVID-19) pandemic in 2020, the telecoms sector had been recording a consistent decline in investments over the last 5 years.
What stakeholders are saying
While blaming the past years’ investment downtrend in the sector on several challenges confronting players in the sector, the immediate past President of the Association of Telecommunications Company of Nigeria (ATCON) Mr. Olusola Teniola, said: “One of the things we need to do continuously is to ensure that we make our industry attractive to FDI by ensuring we have a very conducive and stable environment. A stable environment will mean that policies have to be consistent and seen to be working. We have always said this in the past before Coronavirus came to our shores; we need the government to create an enabling environment, to create the right incentives that will continue to attract foreign direct investments.”
The current ATCON President, Engr. Ikechukwu Nnamani also observed that instability in the country’s forex market has been a major discouragement for many foreign investors who are interested in the country’s telecoms.
“It has been estimated that the country would require $100 billion 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.
Nnamani said another factor hindering foreign investment in the sector is the high cost of doing business in Nigeria. According to him, investors would always look for markets where there is ease of doing business and where their returns on investments are guaranteed.
