Foreign investments in Nigeria’s telecommunications sector witnessed a significant decline in the third quarter of 2024, dropping to $14.4 million, according to the National Bureau of Statistics (NBS). This represents an 87% decline from the $113.42 million recorded in the second quarter.
The NBS data revealed that foreign investments in the sector fell by $99.02 million, signaling a substantial downturn for the industry. Capital importation, which refers to the inflow of foreign funds or investments into Nigeria’s telecommunications sector, has been affected by infrastructure deficits and high operating costs.
In contrast, the first quarter of 2024 saw a significant increase in capital importation, reaching $191.5 million, a 769% increase from $22.05 million in Q1 2023. The second quarter also recorded a substantial inflow of $113.42 million, a 339% increase from $25.81 million in Q2 2023.
However, the third-quarter decline has raised concerns about the sector’s sustainability. The telecommunications industry faces persistent challenges, including foreign exchange difficulties, policy uncertainties, and a pressing need for infrastructure development. High operating costs, fueled by rising inflation, have also affected the sector.
Industry stakeholders, including the Association of Licensed Telecom Operators of Nigeria (ALTON) and the Association of Telecommunication Companies of Nigeria (ATCON), have urged the government to address these challenges. They have warned that inaction could jeopardize the sector’s sustainability and have called for a tariff increase to alleviate the pains of high operating costs.
ALTON Chairman, Gbenga Adebayo, emphasized that “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.”
The decline in foreign investments and the sector’s challenges have raised concerns about the future of Nigeria’s telecommunications industry.
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