Nigerian Telecom Sector Attracts $68B in Investments Propelled by Robust FDI

Dr. Hamadoun Toure, former Secretary-General of the International Telecommunications Union (ITU), announced at ITU Telecom World 2016 in Bangkok, Thailand that investments in the Nigerian telecoms sector have skyrocketed, reaching a staggering $68 billion. Impressively, foreign direct investment (FDI) accounted for over half of this figure, contributing $35 billion. This sizable FDI indicates a heightened engagement from international investors since the local sector was deregulated in the early 2000s.

NCC Director of Public Affairs, Tony Ojobo, elaborated on Dr. Toure’s statement, speculating, “the next growth for voice communication is in Quality of Service. The new oil in Nigeria is ICT, and data transmission is the way to go.” He took a moment to appreciate the transparent management of the nation’s telecom services by the NCC or Nigerian Communications Commission, a reflection of Dr Toure’s sentiments.

Further progress has been observed in the broadband segment with Nigeria experiencing a 21 percent penetration rate. The country is confidently on track to reach the stipulated 30 percent mark by the end of 2018. This growth has been facilitated by significant investments from telcos in 3G and 4G infrastructure across major Nigerian cities. More importantly, these technological advances have brought along affordable rates for consumers.

In the wake of this recent progress, NCC’s Executive Vice Chairman and CEO, Prof. Umaru Danbatta, has invited further participation from international investors, particularly in the booming broadband industry. Striding alongside, Nasir El-Rufai, the Kaduna State governor, announced plans to launch the Smart Kaduna initiative and shared details of negotiations with a smartphone manufacturer for supporting the initiative.

From the corridors of power, communication minister Barr. Adebayo Shittu, who represented President Muhammadu Buhari at the forum, warmly welcomed potential investors and reassured them about easy and smooth visa arrangements, adding the finish, “Our doors are open, and the ease of doing business in Nigeria is being improved upon.”

On the corporate end, the CEO of MainOne, Ms. Funke Opeke revealed her company’s plans to create over 1,000 km of fibre optic in Lagos – an integral building block aimed at nurturing broadband penetration. Mr. Ibrahim Dikko, VP of regulatory and corporate affairs at Etisalat Nigeria, praised the country’s regulatory environment calling it ‘friendly and transparent’.

In the light of increasing foreign interest, Anand Menon, VP of New Consumers at MasterCard, complimented Nigeria’s ICT sector for creating an investor-friendly environment. He affirmed MasterCard’s commitment to further engagement in Nigeria, a country where 57 percent of the population yet lacks bank accounts – an untapped segment that presents a lucrative opportunity for MasterCard.

Reflecting on these latest developments, the ascent of investments from a modest $25 billion less than four years ago to the current $68 billion is indeed a noteworthy leap, signifying Nigeria’s rapid surge in the global telecom space.