Stakeholders in Nigeria’s telecom sector have expressed concern about the ongoing decline in investment in the industry.
The situation is exacerbated by uncertainties around government policies, particularly in relation to foreign exchange (forex) availability, and this is threatening the rollout of 5G technology due to the need to import equipment.
According to the stakeholders, the current situation around forex may further worsen the situation as investors are still uncertain about the government’s policy.
Besides, the stakeholders are disturbed that the current scarcity of forex would hamper 5G rollout in the country as licensed operators would have to import all the equipment required to expand the service.
The Association of Licensed Telecommunications of Nigeria (ALTON) Chairman, Engr. Gbenga Adebayo said the situation is more worrying because Nigeria’s telecom requires more investments.
Adebayo said aside from the dwindling investment, the lack of access to forex is also affecting the operators’ ability to expand.
“We are not in the best of times, I must say, but we are hopeful that things will get better given the policy consistency of the government,” he said.
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The declining investment also casts a shadow over the country’s broadband policy through which the government is targeting 70% broadband penetration by 2025. The implementation of the Nigerian National Broadband Plan (NNBP 2020-
Amid the dwindling investment, industry experts have said that the telecom industry would require, at least, $3.4 billion in investments in fibre infrastructure to meet the 70% target in the next two years.
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) Engr. Ikechukwu Nnamani said the government needs to make the industry attractive by creating a very conducive and stable environment.
According to him, a stable environment would mean that the government is consistent with its policies.
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.
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Notwithstanding the current decline, the NCC recently disclosed that total investments in the country’s telecom industry since it was liberalized in 2001 reached $75.6 billion in 2021.
According to the regulator, this comprised comprising foreign direct investment (FDI) and local investment.
The Executive Vice Chairman of the Commission, Prof Umar Danbatta, who disclosed this to newsmen in Lagos said data from the Central Bank of Nigeria (CBN) showed that investments in the industry rose to $68 billion in 2018.
He added that this increased to $70.5 billion in 2019 and $72 billion in 2020 before hitting $75.6 billion in 2021.
Danbatta, however, admitted that the industry needs to attract a lot more investments to build more infrastructure especially as the country aims to deepen broadband penetration.