Telecommunications and ICT companies in Nigeria owed banks N1.69 trillion as of September 2024, reflecting a slight decrease of N68.04 billion compared to September 2023. The reduction aligns with the Central Bank of Nigeria’s tightened monetary policies. Despite the annual decline, month-to-month debt rose by N31.61 billion, signaling ongoing financial pressures as these firms propose tariff increases for services like data and phone calls.
The decline in borrowing throughout 2024 followed a steep rise in January, when debts peaked at N2.47 trillion—nearly double the January 2023 figure. A notable slowdown occurred by March, with debt reduced to N1.67 trillion, marking a significant shift in borrowing patterns. From mid-2024 onwards, companies reduced debt in response to economic uncertainty and successive interest rate hikes. By September 2024, the N68.04 billion year-on-year reduction underscored the cautious stance of telecom and ICT firms amid challenging financial conditions.
Central Bank Governor Yemi Cardoso, who assumed office in September 2023, spearheaded aggressive interest rate hikes to combat inflation and stabilize the economy. Rates were raised six times in 2024, from 18.75% in February to 27.50% by November, amounting to an 875-basis-point increase. While these measures curbed inflation, they also created borrowing challenges for capital-intensive sectors like telecom and ICT, amplifying the financial strain on companies already grappling with operational and market uncertainties.