Foreign investments in Nigeria’s telecommunications sector fell sharply to $14.4m in the third quarter of 2024, marking an 87 per cent decline from the $113.42m recorded in the second quarter, the National Bureau of Statistics has said.
Foreign investments in the sector dropped by $99.02m going by the latest NBS data above.
In this context, capital importation refers to the inflow of foreign funds or investments into Nigeria’s telecommunications sector. It includes all forms of capital brought into the country by foreign entities for the purpose of business investment.
The bureau revealed in its capital importation report released on Friday that the figure reflected a 77 per cent year-on-year drop compared with the $64.05m attracted in the same period of 2023.
The decline signaled a significant downtrend for the sector, which has been grappling with infrastructure deficits and high operating costs despite its growth potential.
In the first quarter of 2024, capital importation reached $191.5m, representing a 769 per cent increase from $22.05m in Q1 2023. This figure exceeded the total foreign investments for the entirety of 2023, which stood at $134.75m.
In Q2 2024, the sector saw a $113.42m inflow—a 339 per cent increase compared with the $25.81m recorded in Q2 2023.
The third-quarter decline comes amid persistent issues affecting the sector, including foreign exchange challenges, policy uncertainties, and an urgent need for infrastructure development.
The sector grapples with high operating costs fueled by a rising inflation rate, even as it remains vital to Nigeria’s economy, contributing significantly to GDP and providing essential services to millions of Nigerians.
The Association of Licensed Telecom Operators of Nigeria and the Association of Telecommunication Companies of Nigeria have urged the government to address these challenges, warning that inaction could jeopardize the sector’s sustainability.
They have also called for a tariff increase to alleviate the pains of high operating costs that continue to plague the industry.
The ALTON Chairman, Gbenga Adebayo, told media in November that the “current pricing structures are inadequate and unsustainable. Service providers cannot continue to operate under these conditions, especially when the cost of delivering services is far higher than what is being charged.”
He added that many telecom providers cannot continue to subsidize services as some others have been doing and warned that the entire sector could be in jeopardy if changes are not made.
