Navigating challenges and charting a path forward for Nigeria’s telecommunications industry
The Nigerian telecommunications industry, a vital sector of the nation’s economy, faces significant challenges threatening its sustainability and service delivery. In 2024, the Information and Communications Technology (ICT) sector contributed 17.7% to Nigeria’s GDP.
Within this, the telecommunications sub-sector led with a 14.4% contribution, and this highlights the sector’s importance as a driver of economic growth and the broader digital economy in Nigeria.
The industry grapples with a multifaceted array of obstacles, and it is important that President Tinubu and Dr Bosun Tijani, Minister of Communications, Innovation and Digital Economy, address these challenges quickly.
Economic instability, particularly the Naira’s depreciation (129% between 2023 and 2024), has drastically increased operating costs. Importing equipment and settling foreign currency obligations have become expensive, leading to a 50.92% surge in industry-wide expenses in 2023 (from ₦2.09 trillion to ₦3.16 trillion).
Telecom infrastructure is constantly threatened by vandalism, theft, and accidental damage during road construction, leading to service disruptions and increased costs. Operators also face access denial to sites by miscreants and government agencies, contributing to frequent network outages. Despite the CNI designation, fibre cuts are still rampant, and no one has been arrested
Multiple and overlapping taxes from various government tiers burden the industry. Bureaucratic red tape and slow approval processes hinder infrastructure deployment. Challenges also exist in spectrum management, with optimal 5G bands tied to legacy services and high fees impeding expansion.
Despite relatively cheap data, the high cost of 4G and 5G devices (₦120,000 to ₦2 million) limits adoption. While connectivity has improved, issues like dropped calls, unsolicited messages, and illegal deductions persist, affecting the quality of service. These challenges have led to a significant decline in investment over the past 3-4 years, with operators experiencing negative returns on capital.
In fairness to Dr Bosun Tijani, he has shown a clear vision for Nigeria’s digital future, with his Strategic Blueprint for the Digital Economy and his strong background in the tech startup ecosystem is considered an advantage. Yet, it is important that he pays attention to the telecommunications industry, which is responsible for more than 90 per cent of the ICT’s contribution to Nigeria’s GDP.
His primary positive contributions include an ambitious drive to accelerate digital transformation, with a focus on expanding critical digital infrastructure such as fibre optic networks and the rollout of 5G technology. He also champions the growth of the local tech scene by fostering innovation and creating a supportive environment for Nigerian startups.
Furthermore, Minister Tijani has prioritised human capital development within the digital space, initiating programs aimed at upskilling the Nigerian workforce. His policy thrusts are geared towards leveraging technology as a key enabler for national development and bridging the gap between the dynamic startup community and government policy.
These efforts highlight his commitment to positioning Nigeria at the forefront of the digital economy, even as the implementation of these ambitious goals continues to evolve and face scrutiny.
Dr. Aminu Maida‘s appointment as the Executive Vice Chairman of the Nigerian Communications Commission has been one of the positives for the industry. According to operators, he has prioritised industry sustainability. Since his appointment, he has come close to resolving the long-standing USSD debt, actively addressed multiple taxation, and emphasised Quality of Service (QoS) through firm actions.
He completed the NIN-SIM integration, fostered strong collaborative relationships with other regulators and government agencies, and secured agreements for infrastructure protection, including the CNII designation. Dr. Maida also introduced greater transparency and professionalism, attracting over $1 billion in investment pledges, and is noted for his corporate, non-political approach to getting the job done.
Now it is time for the minister to build on these successes and focus on strategic policy implementation, economic advocacy, and consumer-centric initiatives. Dr. Bosun Tijani can further strengthen the sector, ensuring its long-term sustainability and contribution to Nigeria’s digital transformation by adopting a more practical approach and moving away from an idealistic, startup-centric mindset to better understand the complexities of the telecom industry.
He should also seek and incorporate feedback from industry operators, and engage more state governors and other stakeholders to drive progress. While 12 Nigerian states have waived the Right of Way to drive internet penetration, that is still less than half of the 36 states in Nigeria.
