FG plans reforms as telecom sector attracts $191m FDI

The federal government has announced plans to implement reforms in the telecommunications sector after a record $191 million in foreign direct investment was invested in the sector in the first quarter of 2024.

These investments exceeded the total value of foreign direct investment (FDI) for the whole of 2023, according to data from the National Bureau of Statistics on capital imports released last week.

Minister of Communications and Digital Economy Bosun Tijani expressed optimism about building on this momentum, saying government reforms will focus on driving inclusive growth in the digital economy and the broader economy.

“As we embark on the second half of the year, I look forward to building on this momentum, supported by the necessary reforms and policies that President Bola Tinubu is introducing to drive inclusive growth in the digital economy and the broader economy,” the minister said in a statement obtained on Monday.

The Minister noted that the telecommunications sector, which has long been the basis of the country’s economic development, is the engine of economic growth and the driving force of the country’s development.

He attributed this growth to confidence in the sector’s potential and the hard work of entities operating in the ICT sector.

“This increase in foreign direct investment is a sign of confidence in the potential of our sector and a reflection of the hard work that all ICT stakeholders have put in to reverse the slowdown in our sector and ensure that it remains a catalyst for growth,” Tijani assured.

However, this sector is faced with challenges, such as numerous taxes and currency market instability, which discourage further investment.

Experts believe that to sustain the sector’s growth and attract more foreign direct investment, the government needs to address these issues and create a more conducive environment for investors

According to Groupe Special Mobile Association, in 2023, telecom operators paid N2.4 trillion in taxes to the Nigerian government.

The two largest operators in terms of number of subscribers declared losses in their financial reports.

Airtel reported a loss of $151 million in the first quarter of 2024, while MTN Nigeria lost N137 billion in 2023.

The president of the Association of Telecommunications Companies of Nigeria, Tony Emoekpere, has said operators may not survive the end of the year if the current economic difficulties continue.

“Telecommunications companies are suffering losses, although they may be reluctant to disclose this information,” said ATCON chief Hit in April.