Telecom Industry Faces Investment Challenges Despite Overall Capital Inflow Growth
Foreign direct investment (FDI) in Nigeria’s telecommunications sector dropped by a staggering 58% year-on-year in Q1 2025, according to the latest Capital Importation Report by the National Bureau of Statistics (NBS).
The telecom sector attracted only $80.78 million in Q1 2025, compared to $191.57 million during the same period in 2024. This performance also marks a 41% decline quarter-on-quarter when compared to the $136.86 million recorded in Q4 2024.
Multiple Taxation and Right-of -Way Charges Hindering Telecom Investment
Industry stakeholders attribute the sustained decline in telecom investments to persistent regulatory bottlenecks, including:
- Multiple taxation
- High Right of Way (RoW) charges
- Policy inconsistency
- Forex instability
The Association of Licensed Telecommunications Companies of Nigeria (ALTON) emphasised that until these issues are addressed, the sector may continue to experience weak investment inflows.
“We may not see steady growth in investments until the industry challenges are addressed,” ALTON noted in a statement.
Engr. Ikechukwu Nnamani, CEO of Digital Reality and former president of the Association of Telecommunications Companies of Nigeria (ATCON), also stressed the need for policy consistency and a stable regulatory environment to attract long-term investors.
He added that the forex market volatility had discouraged potential foreign investors, although recent signs of stability may reverse the trend in the coming quarters.
Nigeria’s Overall Capital Importation Rises 67% in Q1 2025
While telecoms struggled, total foreign capital inflow into Nigeria’s economy surged to $5.6 billion in Q1 2025 — a 67.12% increase from $3.4 billion in Q1 2024.
Key sectors driving the growth:
- Banking: $3.13 billion (55.44% of total inflow)
- Financing: $2.10 billion (37.18%)
- Production/Manufacturing: $129.92 million (2.30%)
The NBS attributed the banking sector’s dominance to the ongoing recapitalisation exercise led by the Central Bank of Nigeria (CBN), prompting banks to aggressively source capital both domestically and internationally.
Conclusion
The significant decline in foreign investments in Nigeria’s telecom sector highlights the urgent need for structural reforms, especially around taxation, regulatory charges, and forex policies. While the broader economy is seeing improved capital inflow, targeted interventions are required to revive confidence in the telecom industry — a key driver of digital transformation in Nigeria.
