Telecoms Sector witnesses 87% declines in capital inflow Q1 2023
According to the Capital Importation data released by the National Bureau of Statistics (NBS) Nigeria’s telecommunications industry recorded a significant decline in capital importation in the first quarter of this year.
The total foreign investments inflow into the sector for the quarter stood at $22 million, compared with the $168.3 million attracted by the industry in Q4 2022, this represents a decline 87 per cent.
Also, the Q1 2023 figure also represents a 62 per cent decline year on year when compared with the $57,79 million investments recorded by the industry in Q1 2022.
The decline in investment is coming amid an ongoing implementation of the Nigeria National Broadband Plan (NBP 2020-2025) with a target of 70 per cent penetration by 2025, for which the country is relying on more foreign investments.
According to industry experts, the Nigerian telecom industry would require, at least, $3.4 billion in investments in fibre infrastructure to meet this target.
While there had been a general downtrend in foreign direct investment (FDI) in the country’s economy since the outbreak of the coronavirus (COVID-19) pandemic in 2020, the telecoms sector had been recording a consistent decline in investments over the last five years.
In media interview recently, the Chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON) Engr. Gbenga Adebayo said that the challenge of multiple taxation in the telecom industry was one of the major factors discouraging further investments in the industry.
He stressed that telecom operators were currently paying a total of 39 taxes and levies, and governments at different levels in the country keep coming up with different charges.
He said the undefined tax regime in the industry has made planning and projections very difficult for players in the industry, adding that potential investors are also on the lookout for these factors and are still watching.
