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The Nigerian telecommunications sector recorded $80.78 million in foreign direct investments in Q1 2025, representing a 58% decline year-on-year.
This is according to the latest capital importation data released by the National Bureau of Statistics (NBS).
The sector had attracted $191.57 million in foreign investments in Q1 2024, making this year’s record a poor performance despite the general improvement in Nigeria’s capital importation for the quarter under review.
Quarter-on-quarter, the Q1 2025 capital importation for the telecom sector also represents a 41% decline when compared with the $136.86 million recorded in Q4 2024.
Factors militating against investments in Nigerian telecom sector
According to the Association of Licensed Telecommunications Companies of Nigeria, the issue of multiple taxation and high cost of Right of Way are still major problems that need to be addressed to encourage more investments in the telecom sector.
“We may not see a steady growth in investments until the industry challenges are addressed. Issues of Right of Way charges are still there, likewise multiple taxation,” ALTON said in a recent statement.
The CEO of Digital Reality and immediate past President of the Association of Telecommunications Companies of Nigeria (ATCON) Engr. Ikechukwu Nnamani said he expected the government would make the industry attractive by creating a very conducive and stable environment.
- According to him, a stable environment would mean that the government is consistent with its policies. Nnamani also observed that instability in the country’s forex market had been a major discouragement for many foreign investors who are interested in the country’s telecoms.
- However, he expressed optimism that with the recent relative stability in the forex market, things may begin to improve in subsequent quarters of the year.
Nigeria’s capital importation jumps
Despite the decline recorded by the telecom sector, the NBS data shows that total capital importation into Nigeria’s economy to $5.6 billion in the first quarter of 2025, representing a 67.12% increase compared to $3.4 billion recorded in the same period of 2024.
This was driven largely by the banking sector, which accounted for 55.44% of the total foreign investments that came into the country in the period under review.
“The Banking sector recorded the highest inflow with US$3127.92 million, representing 55.44% of total capital imported in Q1 2025, followed by the Financing sector, valued at US$2097.48million (37.18%), and Production/Manufacturing sector with US$129.92 million (2.30%).” The NBS stated in the capital importation report.
The banking sector performance could be attributed to the ongoing recapitalization exercise that has seen Nigerian banks aggressively shopping for investments home and abroad, to meet the new requirements set by the Central Bank of Nigeria (CBN).
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