Nigeria’s Telecoms Sector Faces Nearly 50% Drop in Foreign Investment, Data Consumption Surges
The Nigerian telecoms sector experienced a substantial decline in foreign direct investment (FDIs) in 2022, with capital inflow plummeting by nearly 50% due to challenging economic conditions, security concerns, and foreign exchange crisis, according to the Nigerian Communications Commission (NCC) 2022 Subscriber/Network Data Yearly Report.
The report revealed that FDIs into the telecoms sector for 2022 amounted to $399.9 million, a significant drop from the $753 million recorded in 2021, signifying a decline of 46.9%.
Despite the decline in foreign investment, the telecoms industry’s contribution to Nigeria’s gross domestic product (GDP) saw a slight increase from 12.61% in Q4 2021 to 13.55% in Q4 2022, as per NCC’s data compiled from the Central Bank of Nigeria.
The NCC report also unveiled the sector’s financial performance in 2022, revealing that domestic investment (CAPEX) reached N785.7 billion, operating costs amounted to N2 trillion, and revenue totaled N3.88 trillion. Major GSM operators such as MTN, Globacom, Airtel, and 9mobile reported N718.3 billion in CAPEX, N1.99 trillion in operating costs, and N3.329 trillion in revenue. The report highlighted the substantial role of mobile network operators, which contributed to 86% of the industry’s revenue.
Opinion: The decline in foreign investment in Nigeria’s telecoms sector underscores the need for comprehensive economic reforms and strategic measures to attract international investors. The sector’s resilience amid economic challenges and the surge in data consumption indicate the critical role of telecommunications in the country’s socio-economic development. Despite the setback, the sector remains pivotal for Nigeria’s economic growth and development.