Foreign Direct Investment into Nigerian telecoms industry drops by 40 per cent

Capital inflow by way of Foreign Direct Investment (FDI) into the Nigerian telecoms industry has dipped by over 40 per cent, going by data released by the Nigerian Communications Commission (NCC).

According to NCC, FDI in 2022 was approximately $399,905,531.38 against $753,044,446.35 it was in 2021 indicating a sharp drop of almost 50per cent.

Though the report entitled: ‘2022 Subscriber/Network Data Annual Report’ produced by the Policy Competition and Economic Analysis Department of the NCC did not explain why the inflow declined so sharply, stakeholders in the sector however blamed it on foreign exchange fluctuations and the upcoming elections that were held early this year.

Chairman, Association of Licensed Telecom Operators of Nigeria (ALTON), Gbenga Adebayo, in a telephone conversation, said there has been a significant fluctuation in forex in the country, a situation he said would naturally discourage any foreign investors. He said if an investment decision was made when the exchange rate was N400 to a Dollar and the rate suddenly rose to between N700 and N800, saying that is a great distortion.

He said last year was close to an election year, saying that elections were generally marked by uncertainties. He said investors would naturally hold back their funds to see which side of the political spectrum the pendulum would swing, adding that he was optimistic that the figures would change for the better with the inauguration of the new administration. “We need to see what this year will look like. We hope for a better result,” he said.

According to the report, contribution to the nation’s Gross Domestic Product (GDP) during the period under review, increased from 12.61 per cent in the fourth quarter (Q4) of 2021 to 13.55per cent in Q4 of 2022.

On finance, it said based on collation on the submissions received from responsive service providers in the industry, capital expenditure (capex) by way of domestic investment was N785,771,028,960.36 as at December 2022, while operating cost was N2,092,815,085,166.00 as at December, 2022. Total revenue recorded in 2022 was N3,856,026,156,380.29.

The report indicated that the total number of registered mobile subscriber identity module (SIM)-based subscribers, in line with the SIM Card registration exercise mandated by the Commission, mobile operators as at December, 2022 had registered a total of 301,283,030 subscribers in the country.

Glo led by 65,439,265, MTN 23,585,034; Airtel-64,892,313; 9-mobile-46,163,857; Smile-966,066 and Ntel-236,495.

“In analyzing the annual Active Voice Subscription for Mobile (GSM) segment, total active voice subscriptions increased from 195,128,265 subscriptions as at December 2021 to 222,225,300 subscriptions as at December 2022. This showed a 13.88per cent gain in GSM Active Voice Subscriptions year on year.

“The number of active subscribers increased from 195,463,898 subscriptions in 2021 to 222,571,568 active voice subscriptions as at December 2022. Active subscriptions increased by 27,107,670 subscriptions representing a 13.86per cent increase in active subscriptions year-on-year.

“The increase in the operators’ subscriber base was attributed to a number of reasons which includes subscriber loyalty, promos, seasonal effects, aggressive consumer acquisition drive, and competitive product offerings across all the networks. The increase in Active Subscription impacted positively on other derived telecom indicators such as teledensity, internet penetration as well as broadband penetration,” the report said.