By Atoyebi Nike
Foreign direct investment into Nigeria’s telecommunications sector fell sharply to $80.78 million in the first quarter of 2025, marking a 58% drop compared to the $191.57 million recorded in Q1 2024.
This decline, reported by the National Bureau of Statistics (NBS) in its latest capital importation data, also represents a 41% fall quarter-on-quarter from the $136.86 million posted in Q4 2024.
While Nigeria saw an overall improvement in capital inflows during the review period, the telecoms sector lagged significantly behind. Industry experts continue to attribute the downturn to systemic issues such as multiple taxation and the persistent high cost of Right of Way charges.
The Association of Licensed Telecommunications Operators of Nigeria (ALTON) noted that without resolving these challenges, investor confidence may remain weak. “We may not see steady growth in telecom investments until the issues of Right of Way and multiple taxation are effectively tackled,” the association said.
Engr. Ikechukwu Nnamani, CEO of Digital Reality and former president of the Association of Telecommunications Companies of Nigeria (ATCON), echoed similar concerns. He emphasized the need for consistent government policies and a stable operating environment to attract long-term foreign investment.
Nnamani added that the previously volatile foreign exchange market had also discouraged potential investors. However, he expressed hope that the recent stability in forex rates could signal a turnaround in coming quarters.
Despite telecoms’ poor showing, Nigeria’s overall capital importation grew to $5.6 billion in Q1 2025 a 67.12% increase from the $3.4 billion recorded in the same period last year. The growth was largely driven by the banking sector, which alone accounted for $3.13 billion, or 55.44% of the total inflows.
According to the NBS report, the financing sector followed with $2.1 billion (37.18%), while the manufacturing sector attracted $129.92 million (2.30%).
The surge in banking sector investment is believed to be linked to the Central Bank of Nigeria’s ongoing recapitalization directive, which has prompted banks to seek fresh capital domestically and internationally.
