Nigeria’s telecom sector saw a significant boost in foreign direct investment (FDI), attracting $304 million in the first half of 2024, according to National Bureau of Statistics (NBS) data. This figure more than doubles the $134.75 million recorded for the entire 2023.
Impressive Growth Amid Challenges
In Q1 2024, the sector recorded $191.5 million in capital inflow, a staggering 769% increase from Q1 2023’s $22.05 million. However, Q2 saw a decline to $113.4 million, still a 339% rise compared to Q2 2023.
Stakeholders Seek Policy Stability
Despite the growth, experts like Mr. Wale Babalola and ALTON’s Executive Secretary, Gbolahan Awonuga, stress that policy reforms are needed to sustain this momentum. Concerns around tariff regulation, forex instability, Right of Way charges, and multiple taxation continue to deter potential investors.
Historical Investment Decline
FDI in Nigeria’s telecom sector has struggled in recent years, with 2022 seeing a 47% drop in investments to $399.9 million. The sector’s capital expenditure (CAPEX) also decreased by 30%, a result of limited funds for infrastructure development.
Government’s Plan for Infrastructure
To address the infrastructure gap, the Nigerian government is working on a national fibre project, seeking $2 billion to expand broadband access. Talks with the World Bank are ongoing, with the project expected to take 2-3 years to complete.
Source: Nairametrics