WATRA urges govts to increase access to telecoms services
The Executive Secretary of West Africa Telecommunications Regulators Assembly (WATRA), Aliyu Yusuf Aboki, has called on governments to ensure increased access to telecoms services in Nigeria and other parts of Africa.
Aboki said that telecommunications has widened markets for millions of Nigerians drastically in the last 10 years and boosted productive capacities. He also noted that the use of digital tools such as applications, websites and software programmes has enabled many Nigerians to work more efficiently and more productively. The WATRA boss commented that telecommunications have created many digital economy jobs that did not exist even five years ago for youths.
Aboki, in a chat with The Guardian, said the digital economy is transforming livelihoods and creating vast economic opportunities, saying the potential of this economic transformation should not be limited by raising taxes and tariffs.
According to him, the more people have access to technology and telecommunications services, the more “we have an increase in economic activity. Telecoms should be seen as a driver for growth not a source of economic revenue. The government will end up getting far more revenue when it stimulates investment and innovation, and the use of technology by SMEs, and individuals intensifies.”
He said lower taxes and levies provide telecommunications companies with additional funds to invest in their operations, expand their networks, and improve their services.
Aboki averred that this would lead to keeping the prices low for consumers. “For governments all over the world, the telecommunications sector is a huge source of revenue.
But smarter governments have learned not to rely on taxing the telecommunications industry directly, but get more revenue from the much broader growth across different sectors of the economy, which the intensive use of telecommunications drives. Foreign investment in the telecommunications sector is now a major source of FDI. The economic growth driven by the digitalisation of economic activities could with time deliver taxes that rival the revenue that Nigeria gets from oil.”
The WATRA boss said evidence is clear that the expansion of the digital economy has a positive spillover impact on economic growth, saying imposing high taxes that hinder the growth of the economy could delay the emergence of its benefits and potentially hinder tax revenue by impeding economic growth.
Aboki, a telecoms engineer, noted that smart policymakers and regulators are always looking for ways to reduce the cost of telecommunications services because they are aware that they are a growth multiplier.
According to him, in 2020, an influential body, the Alliance for Affordable Internet, recommended lowering taxes on low-cost devices as a way of reducing the cost of mobile usage. “You increase the potential of the telecommunications sector when you reduce the tax burden. Countries that do so avoid delays in the deployment of new equipment and technology and the expansion of services by mobile network operators. When you delay, you are delaying the transformative impact services could have on the economy, citizens, and small businesses in various areas of the country.”
While noting that taxes do help the government generate revenue, the WATRA boss said they could also have a regressive effect on income distribution.
He explained that taxes that are applied may disproportionately affect low-income households, “they tend to spend a higher proportion of their income. These services are standard across forms so the low-income earners would be negatively impacted so the spillover effect must be considered. This occurs because telecom services are utilized in many other sectors and can enhance productivity in those areas.
“By the time you carry out any activity that impacts the telecoms sector, then be ready for the ripple effect. So, it certainly impacts other sectors and enhances productivity. I just wanted to highlight this broader impact on overall growth, national incomes, and future revenues of those sectors. If you negatively impact those sectors, those sectors will be hindered and cannot grow optimally.”