Nigeria’s aspiration to become a leading digital economy is significantly challenged by unresolved Right of Way (RoW) issues that hinder telecommunications companies from expanding the essential fibre optic infrastructure needed for high-speed internet and seamless connectivity.
Despite notable advancements in digital adoption, the rollout of crucial infrastructure faces considerable obstacles, primarily due to excessive RoW fees imposed by state governments. RoW permits telecom companies to install, maintain, and upgrade infrastructure such as fibre optic cables, cell towers, and antennas on public or private property. These cables are vital for a modern digital economy, supporting services from online education to e-commerce.
Unfortunately, many state governors perceive RoW as an opportunity to levy exorbitant fees on telecom operators, stifling the necessary expansion of infrastructure.
Costly Challenges
In 2013, the National Economic Council established a maximum RoW charge of N145 per linear meter to streamline costs for telecom operators and accelerate broadband deployment. Yet, many state governments have ignored this agreement, demanding higher fees that complicate network expansion.
“Some states still charge significantly more than the agreed N145 per meter,” stated Gbenga Adebayor, Chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON). “We have a long way to go.”
Even when states claim compliance, telecom companies report that hidden fees inflate overall costs. “Some states appear positive but mask their true fees with alternative charges that exceed the agreed standards,” Adebayor explained.
Limited Progress
As of June 2024, the Nigerian Communications Commission (NCC) had secured RoW fee waivers in only six states. NCC Executive Vice Chairman Aminu Maida indicated ongoing discussions with other states for additional waivers.
“Through advocacy, we’re addressing long-term sector challenges, including designating telecom infrastructure as critical national infrastructure, and we’ve successfully negotiated waivers in over six states,” Maida noted. However, inquiries about the specific states that granted waivers went unanswered.
Currently, only five states—Nasarawa, Katsina, Anambra, Kaduna, and Kwara—have made moves to alleviate the financial burdens on telecom operators, with Kwara charging a nominal N1 per kilometre of fibre. Yet, the disparity in RoW charges across the country continues to hinder telecom companies, particularly in states with high fees, thus impeding broadband access in underserved rural areas.
A Digital Economy at a Crossroads
Experts warn that the longer these barriers persist, the more Nigeria’s digital future is jeopardized. While the Federal Government prioritizes broadband expansion, state actions are slowing critical infrastructure rollout.
The inconsistent application of RoW fees and the introduction of hidden costs are seen as short-term revenue tactics that could jeopardize Nigeria’s long-term digital potential.
In July, optimism surged during a strategic meeting in Abuja with telecom leaders and representatives from all 36 states. Stakeholders resolved to draft a Memorandum of Understanding between telecom operators and state governments to foster a more investor-friendly environment.
They also advocated for a “Dig Once Policy,” allowing multiple operators to lay infrastructure simultaneously, which would reduce costs and minimize community disruptions. Yet, rural areas remain largely disconnected, with broadband penetration at only 43.53% as of March 2024, compared to urban centers. The government aims for 70% broadband penetration by 2025, hoping to decrease the unconnected rate in rural regions from 61% to less than 20% by 2027.
Investors’ Hesitance
Reuben Oshomah, Regional Director for West Africa at Avanti Satellite Communications Ltd., emphasized the significant investment required for fibre deployment, which makes it hard for investors to justify expenses, especially in rural areas lacking demand. “Investors need to see profitability to justify their investment in fibre infrastructure,” he noted.
Harnessing Youthful Potential
Nigeria’s youthful population, with a median age of 18, drives the nation’s digital ambitions. However, the digital divide between urban and rural areas presents a challenge to fully harnessing this potential. Experts warn that without adequate infrastructure, Nigeria risks falling behind in the global digital race, missing opportunities for innovation and economic growth.
“The future of our digital economy relies on broadband, which in turn depends on Right of Way,” stated Abiola Jimoh, co-CEO of XChangeBOX. “Addressing RoW issues is crucial for enabling a connected Nigeria.”
Call for Broader Involvement
As telecom operators navigate RoW challenges, calls for broader civil society and labor union involvement are growing. Deolu Ogunbanjo, National President of the National Association of Telecommunications Subscribers, urged labor unions to hold non-compliant states accountable. “States that fail to comply with RoW agreements should be called out,” he asserted.
He emphasized that fibre optics not only enhance connectivity but also drive economic development and job creation. Ogunbanjo called for telecom operators to disclose non-compliant states to facilitate pressure from unions and civil organizations for adherence to policies essential for economic growth.
Federal Government’s Inaction
While state governments pose a significant hurdle, industry insiders argue that the Federal Government’s inaction is also a contributing factor. Critics of Minister of Communications and Digital Economy, Bosun Tijani, claim he focuses on internal ministry issues rather than addressing urgent RoW challenges.
The previous administration made strides in collaborating with the Nigerian Governors Forum to resolve RoW disputes, but recent initiatives have stalled under the current minister.
The Path Forward
Despite the challenges, industry leaders remain hopeful for resolution. Tony Emoekpere, President of the Association of Telecommunications Companies of Nigeria, highlighted the need for collaboration between federal and state governments. “The future of Nigeria’s economy is digital, and telecom infrastructure is vital. We must simplify regulations and ensure a predictable cost of doing business,” he stated.
Ultimately, state governments must adopt a long-term growth perspective over short-term revenue generation, paving the way for a digitally connected Nigeria that benefits all citizens. The Federal Government, too, must engage actively with stakeholders to establish a unified RoW policy, supporting telecom companies in expanding their infrastructure.
Without prompt and decisive action, Nigeria’s digital economy remains at risk, potentially lagging behind in an increasingly interconnected world.
Meanwhile, the country plans to expand its fibre optic network significantly, deploying an additional 90,000 kilometers of cable, boosting total capacity from 35,000 km to 125,000 km. This initiative, announced by Minister Dr. Bosun Tijani, aims to position Nigeria as Africa’s third-largest terrestrial fibre optic backbone, following South Africa and Egypt. Industry participants urge all levels of government to view this initiative as a national priority rather than a revenue opportunity.
