Foreign investments in Nigeria’s telecommunications sector have dropped dramatically, falling to just $14.4 million in the third quarter of 2024. This is a staggering 87% decrease compared to the $113.42 million that came into the sector in the second quarter of the same year, according to the National Bureau of Statistics (NBS).
To put it simply, foreign investments are the money that companies or individuals from other countries bring into Nigeria to invest in businesses, in this case, the telecommunications industry. The latest report from the NBS indicates that the sector lost $99.02 million in foreign investments compared to the previous quarter.
When looking at the numbers from a year ago, the situation appears even worse. In the third quarter of 2023, the telecommunications sector attracted $64.05 million in foreign investments, which means the current amount of $14.4 million represents a 77% drop from that time.
This decline is concerning for the telecommunications industry, which has been facing serious challenges, including a lack of proper infrastructure and high costs of doing business. Despite the potential for growth in this sector, these ongoing issues are making it difficult for companies to thrive.
Earlier in 2024, the first quarter saw a significant increase in foreign investments, reaching $191.5 million, which was a remarkable 769% jump from just $22.05 million in the first quarter of 2023. This amount was even higher than the total foreign investments for all of 2023, which were $134.75 million. In the second quarter of 2024, investments remained strong at $113.42 million, marking a 339% increase from $25.81 million in the second quarter of 2023.
However, the significant drop in the third quarter highlights the ongoing problems the sector is facing. These include difficulties with foreign exchange, uncertainty around government policies, and an urgent need to improve infrastructure. The industry is also struggling with high operating costs, which are being driven up by rising inflation. Despite these challenges, the telecommunications sector plays a crucial role in Nigeria’s economy, contributing significantly to the country’s gross domestic product (GDP) and providing essential services to millions of people.
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Industry groups like the Association of Licensed Telecom Operators of Nigeria and the Association of Telecommunication Companies of Nigeria have raised alarms about these issues. They are urging the government to take action to resolve these challenges, warning that if nothing is done, the future of the telecommunications sector could be at risk.
Additionally, they are calling for an increase in service tariffs to help cover the high costs that companies are currently facing. Gbenga Adebayo, the chairman of the Association of Licensed Telecom Operators of Nigeria, expressed his concerns in November, stating that the current pricing for services is not sufficient or sustainable. He emphasized that telecommunications companies cannot continue to operate under these tough conditions, especially since the costs of providing services are much higher than the prices they are charging. He warned that if changes are not made soon, the entire telecommunications sector could be in serious trouble.
