Nigeria gets N33tr from telcos as FX, others pose fresh threat 

GSMA projects extra N1.6tr tax revenue, 15m subscribers

Amid insecurity, foreign exchange crisis, Naira depreciation and undue political interference, the telecommunications sector contributed N33 trillion to Nigeria’s Gross Domestic Product (GDP) in 2023, with N2.4 trillion in tax revenue.

The industry is also projecting an additional N1.6 trillion in tax revenue and 15 million Internet users if prevailing challenges are addressed.

Despite the projected 13.5 per cent contribution to the GDP, Minister of Communications, Innovation and Digital Economy, Dr Bosun Tijani and leading telecommunications companies, including MTN, Airtel and GlobalCom, who gathered yesterday in Abuja at GSMA – Nigeria Digital Economy Report presentation, sought closer collaboration for the nation to lead mobile technologies for the African continent.

For this to happen, the industry players demanded urgent action on the high cost of energy and inflation, while checkmating currency devaluation, which has left most of them in losses.

Coming at a time that the government is seeking to increase Value Added Tax (VAT) and introduce a cybercrime levy, the stakeholders insisted that Nigeria remained one of the countries with the highest taxes on the telecommunications sector, adding that the development would impact its digital and financial inclusion.

Also raising concerns over rising insecurity and the issue of the right of way, the stakeholders noted that telecoms infrastructure’s damage caused by construction works, vandalism and theft was impacting deployment, quality of services and coverage as well as increasing duplicative costs.

The financial performance of the mobile telecommunications industry, going by the outcome of the industry report, has slowed down in recent years after a long period of sustained growth, with limited capacity to support the capital-intensive nature of the business.

Tijani, who was concerned about the need to leverage the sector in helping the country to get, store and translate data for development, stated that improving the telecommunications sector was key, given its capacity to drive the growth of other sectors and improve productivity.

Stressing that consumption of connectivity is still dismal, Tijani stressed the need for mobile technologies to become affordable, adding that the government would improve the business environment and ensure investment inflow.

He said: “We believe that if we can deliver it as a country, the sector in itself can become a provider of the same set of services across our region. Nigeria can power the fibre network in Nigeria, the Republic of Guinea, and so many other countries in West Africa. And we believe with investment in fibre optic networks and telecommunications services, perhaps we can leapfrog from 2G to 5G. Of course, there are issues that we need to look at and address, including the affordability of devices. But I don’t think as a nation that is extremely blessed with young people looking for opportunity to leapfrog, that we should be moving from 2G to 3G to 4G.”

Chief Executive Officer, MTN Nigeria, Karl Toriola, said the sector is in serious crisis following the prevailing economic realities.

While decrying the rising cost of doing business, Toriola asserted that the sector might not declare any profit due to foreign exchange and Naira depreciation.

The GSMA report emphasised that while 29 per cent of Nigerians are regularly using mobile internet, there remains untapped potential, as 71 per cent are not accessing these services regularly.

It called for an improved policy environment, noting that such a move has the potential to help the industry boost coverage and adoption, resulting in 15 million additional Internet users by 2028.

Head of Sub-Saharan Africa at the GSMA, Angela Wamola, underscored the place of high-speed connectivity in any digital nation.