The Global System for Mobile Communications Association (GSMA) has called on the Federal Government to lower telecom taxes to stimulate investment and enhance Nigeria’s digital economy. Angela Wamola, GSMA’s Head of Sub-Saharan Africa, highlighted that Nigeria’s complex and burdensome tax regime is stifling the telecom sector’s growth and investment capabilities.
In a note shared with our correspondent, Wamola pointed out that rising operational costs, driven by increasing energy prices and difficulties in accessing foreign currency for equipment imports, are exacerbating the sector’s challenges. These issues are not unique to Nigeria but are intensified by the country’s specific tax obstacles.
The Nigerian telecom sector has seen a slowdown in growth and a decrease in its contribution to the GDP due to financial strains on operators. In 2023, telecom companies paid approximately N2.4 trillion in taxes, according to a digital economy report from the Groupe Special Mobile Association. Despite this, the sector generated around N33 trillion, accounting for 13.5% of the country’s GDP.
Wamola also criticized the high and inconsistent right-of-way (RoW) charges, which vary significantly between states. These fees, paid for using land or property for infrastructure deployment, have increased the cost of fiber optic installations. Although a 2020 agreement set the RoW charge at 145 naira per meter, many states have not adhered to this rate, leading to increased costs ranging from 1% to 70% above the agreed amount.
Uniform application of the agreed RoW rate could reduce deployment costs by 15%, making network expansion more feasible for operators. Wamola urged the government to streamline taxes, harmonize RoW charges, and eliminate multiple levies to encourage investment and improve digital inclusion.
She emphasized that tax reform would not only benefit the telecom sector but also promote economic growth, enhance connectivity, and increase access to digital services for millions of Nigerians.
