Expert: Nigeria’s Telecoms Sector Threatened by Economic Challenges

Emma Okonji

The Chairman, Technology Committee of the Nigerian Bar Association Section on Business Law, Ikemesit Effiong, has raised concerns about the sustainability of Nigeria’s telecoms sector amid ongoing economic challenges.

In an article titled: “The Imperative of Upholding Nigeria’s Telecoms Lifeline,” Effiong emphasised the pivotal role of telecommunications as both an economic engine and societal enabler, adding that with approximately 15,000 direct employees and a significant 16 per cent contribution to Nigeria’s GDP, the sector’s health is crucial for the nation’s well-being.

Effiong highlights various obstacles facing the telecoms industry, including frequent fibre optic cable cuts due to road construction and vandalism, multiple taxations, and challenges in acquiring rights-of-way. These issues, he said, compounded by exploitative rent-seeking practices, have persisted despite efforts to resolve them.

“Central to the sustenance of any industry is a conducive economic environment that allows for sustainable growth and innovation. However, regulatory constraints that limit tariff adjustments hinder the sector’s ability to adapt to market dynamics unlike other industries. Recent data from the National Bureau of Statistics (NBS) indicates a rise in inflation to 33.20% in March 2024, up from 31.7 per cent in February 2024. This poses significant challenges for businesses striving to manage staff welfare and make necessary investments amid economic strains.

“The inflationary pressures have led to price increases across various sectors, including agriculture, beverages, and services. Companies such as Nigerian Breweries Plc and Netflix have adjusted prices multiple times this year to cope with rising costs,” Effiong said.

According to him, recently, the quality of service has become a significant concern for subscribers across the country. Available data indicates that this issue may persist for the foreseeable future. The 70 per cent broadband penetration target was severely impacted in 2023, experiencing a decline of 14.2 per cent from a peak of 48.28 per cent in March to 41.87 per cent in November.