Capital inflow into the telecommunications sector reaches $153.5 million in the second quarter of 2022

Nigeria’s telecommunications sector attracted a total of $153.5 million in capital imports in the second quarter of 2022. Although this is the highest inflow into the sector in the past 6 quarters , this figure also exceeded the $107.46 million recorded by the sector in the year 2021.

According to data on capital imports released by the National Bureau of Statistics (NBS), the second quarter figure also recorded a growth of 165% to $57.79 million attracted to the sector in the first quarter of this year.

Foreign investment in the sector is however still too low to meet the country’s infrastructure needs, especially with the ongoing implementation of the Nigeria National Broadband Plan (NBP 2020-2025) with a target of 70% penetration by 2025. Industry experts say the industry will need at least $3.4 billion in investment in fiber infrastructure to meet this goal.

While there had been a general downward trend in FDI in the country’s economy since the outbreak of the coronavirus (COVID-19) pandemic in 2020, the telecommunications sector had seen a steady decline in investment during of the last 5 years.

What stakeholders are saying

While blaming the recent years’ declining investment trend in the sector to several challenges facing industry players, the outgoing President of the Association of Telecommunications Company of Nigeria (ATCON) Mr. Olusola Teniolasaid: “One of the things we have to do constantly is make sure we make our industry attractive for FDI by making sure we have a very conducive and stable environment. A stable environment means policies have to be consistent and give We’ve always said this in the past before the coronavirus hit our shores, we need the government to create the right environment, to create the right incentives that will continue to attract direct investment strangers.

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The current president of ATCON, Engineer Ikechukwu Nnamani also observed that the instability of the country’s foreign exchange market has been a major deterrent to many foreign investors interested in the country’s telecommunications.

“It has been estimated that the country will need investments of $100 billion over the next 10 years to fill the existing infrastructure gap in the telecommunications sector, but where will the money come from?

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“The exchange rate situation in Nigeria is a serious concern for foreign investors, they are not sure what the situation will be like when they want to repatriate their income. fluctuations in the exchange rate. If we want to see investors, we have to deal with the exchange rate situation first,” he said.

Nnamani said another factor hampering foreign investment in the sector is the high cost of doing business in Nigeria. According to him, investors would always look for markets where it is easy to do business and where their returns on investment are guaranteed.

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