Foreign investments in Nigeria’s telecommunications sector plummeted to $14.4 million in the third quarter of 2024, marking an 87% decline from $113.42 million in the previous quarter, according to the National Bureau of Statistics (NBS). This represents a drop of $99.02 million from the previous quarter, highlighting a significant contraction in foreign capital inflows.
The NBS’s latest capital importation report, released on Friday, also revealed that foreign investments in the telecom sector saw a 77% year-on-year decline, compared to $64.05 million in the same period in 2023.
Capital importation refers to the influx of foreign funds into Nigeria’s telecom sector for business investment purposes. The sharp decline comes amid ongoing challenges facing the sector, including infrastructure deficits, high operating costs, and a volatile foreign exchange environment, despite the sector’s substantial growth potential.
In contrast, the first quarter of 2024 saw a remarkable surge in capital importation to $191.5 million, a 769% increase from $22.05 million in Q1 2023, surpassing the total foreign investments for all of 2023, which amounted to $134.75 million. Q2 2024 also recorded strong growth, with $113.42 million in inflows—up 339% from $25.81 million in Q2 2023.
The downturn in Q3 comes amidst persistent issues, including policy uncertainties and a pressing need for infrastructure development. The telecom sector, which plays a critical role in Nigeria’s economy by contributing significantly to GDP and providing essential services to millions, is also grappling with the impact of rising inflation and escalating operating costs.
Industry stakeholders, such as the Association of Licensed Telecom Operators of Nigeria (ALTON) and the Association of Telecommunications Companies of Nigeria (ATCON), have urged the government to address these challenges urgently. They have warned that the sector’s sustainability is at risk without meaningful intervention, and have called for a tariff increase to help offset the high operating costs.
ALTON Chairman Gbenga Adebayo noted in November that current pricing structures are inadequate and unsustainable. He emphasized that service providers can no longer absorb the high cost of service delivery, and without necessary adjustments, the telecom sector may face serious challenges ahead.
