Nigeria’s telecoms sector attracts $191.5 million in foreign direct investment in Q1 2024 – NBS

Nigeria’s telecommunications sector attracted a total of $191.5 million in foreign direct investment (FDI) in the first quarter of this year.

This was announced by the National Bureau of Statistics (NBS) in the latest capital import data released on Monday.

This indicates a promising start for the telecommunications sector, which has seen a steady decline in investment for several years.

Indeed, this figure in the first quarter of 2024 exceeded the total value of foreign direct investment (FDI) recorded in this sector in 2023, which stood at $134.75, according to NBS data.

On a year-on-year basis, capital imports received by the sector in Q1 2024 represent an increase of 769% compared to the amount of USD 22.05 million received in Q1 2023.

Similarly, when compared to the amount of USD 22.84 million received in the previous quarter i.e. Q4 2023, this also means an increase in investment by 738%.

Strengthening broadband internet access

An increase in capital imports to the telecommunications sector could contribute to the country’s ambition to provide broadband internet access to at least 70% of the population by 2025.

With the ongoing implementation of the Nigeria National Broadband Plan (NBP 2020-2025) requiring the country to invest more abroad, the sector has seen a steady decline in foreign investment.

Meanwhile, according to industry experts, the Nigerian telecom industry would need at least $3.4 billion in investment in fibre infrastructure to achieve the 70 per cent broadband internet coverage target.

The situation is further exacerbated by the devaluation of the naira, which has significantly limited the ability of operators to invest in infrastructure to expand their networks.

Government SPV

However, realising that the necessary investments would not come, the Federal Government recently set up a Special Purpose Vehicle (SPV) to deliver an additional 90,000km of fibre optic cable to complement existing connectivity and ensure universal internet access across Nigeria.

According to the Minister of Communications, Innovation and Digital Economy, Dr. Bosun Tijani, in collaboration with partners and stakeholders from the government and private sectors, the SPV will build the additional fibre coverage required to expand Nigeria’s backbone network coverage to at least 125,000 km, from the current coverage of about 35,000 km.

“Building on our existing partnership with the Broadband Alliance, this increased connectivity will help bridge the current non-consumption gap by connecting over 200,000 educational, healthcare and social institutions across Nigeria, ensuring that a larger section of our society can enjoy the benefits of internet connectivity.” said the minister.

He added that the project will also help increase internet penetration in Nigeria to over 70% and reduce the cost of internet access by over 60%.

Tijani said the project will enable Nigeria to achieve inclusion of at least 50% of the 33 million Nigerians currently excluded from internet access. It is also expected to generate up to 1.5% growth in GDP per capita, increasing GDP from $472.6 billion (2022) to $502 billion over the next 4 years.