Nigeria’s telecommunications sector has recorded its weakest foreign investment inflow in four years, with capital importation dropping sharply to $7.24 million in the first quarter of 2026 despite recent tariff increases aimed at attracting more investment into the industry. The latest figures have sparked concerns over investor confidence in one of the country’s most critical economic sectors.
According to data released by the National Bureau of Statistics, the telecoms sector accounted for just 0.07 per cent of the $10.37 billion total capital imported into Nigeria during the period. The figure represents a dramatic decline from the $80.78 million recorded in the first quarter of 2025 and falls significantly below the $103.36 million attracted in the final quarter of last year. Industry analysts say the drop highlights lingering concerns among foreign investors despite regulatory efforts to improve the sector’s profitability.
The decline comes more than a year after the Nigerian Communications Commission approved a 50 per cent increase in telecom tariffs, a move designed to help operators cope with rising operational costs, foreign exchange volatility, inflation, and increasing energy expenses. While the tariff adjustment was expected to strengthen the industry’s investment appeal and encourage infrastructure expansion, the latest numbers suggest foreign investors remain cautious about committing fresh capital to the market.
Ironically, the weak telecoms performance occurred against the backdrop of a strong rise in overall foreign capital inflows into Nigeria. The NBS reported that total capital importation surged by 83.83 per cent year-on-year to $10.37 billion in Q1 2026, largely driven by portfolio investments. The banking sector emerged as the biggest beneficiary, attracting $7.55 billion, while financing and manufacturing also secured significantly higher inflows than telecommunications.
Despite the investment slowdown, telecom operators continue to expand network infrastructure across the country. The Nigerian Communications Commission disclosed that mobile network operators and tower companies invested about N2.5 trillion in network upgrades and expansion projects in 2025, leading to the addition and modernization of more than 2,800 telecom sites nationwide. However, with consumers still battling dropped calls, slow internet speeds, and service disruptions, industry stakeholders warn that attracting sustainable foreign investment will remain crucial to improving service quality and supporting the sector’s long-term growth.
source: punch