Foreign investments in Nigeria’s telecommunicatons sector plunged to $14.4 million in the third quarter of 2024, reflecting an 87% decline from the $113.42 million recorded in the second quarter, according to the latest report by the National Bureau of Statistics (NBS).
Key Figures
- Third Quarter 2024: $14.4 million
- Second Quarter 2024: $113.42 million
- Decline: $99.02 million drop
- Year-on-Year Comparison: 77% decrease from $64.05 million in Q3 2023
The report attributes this sharp drop to persistent challenges, including foreign exchange instability, policy uncertainties, and Nigeria’s need for critical infrastructure improvements. Despite its contribution to GDP and essential services for millions of Nigerians, the sector continues to face headwinds like high operating costs exacerbated by inflation.
In Q1 2024, foreign investment reached $191.5 million, marking a 769% increase compared to $22.05 million in Q1 2023. This number surpassed the entire foreign investments for 2023, which stood at $134.75 million.
However, the Q3 downturn signals growing concerns about sustainability in the telecoms industry.
Groups like the Association of Licensed Telecom Operators of Nigeria (ALTON) and the Association of Telecommunication Companies of Nigeria (ATCON) have highlighted key factors contributing to these challenges:
- Foreign Exchange Issues
- Rising Inflation and High Operating Costs
- Urgency for Infrastructure Development
Gbenga Adebayo, Chairman of ALTON, emphasized in November that Nigeria’s pricing structures are unsustainable. He noted that telecom companies cannot continue to operate under these pressures without government intervention, suggesting that tariff hikes may become essential.
“Service providers cannot continue to subsidize services under the current cost structures. Without changes, the entire sector is at risk.”
Stakeholders urge immediate government action to address these concerns to stabilize the telecom sector, ensure sustainable operations, and attract foreign investments once again.
