Foreign direct investment (FDI) in Nigeria’s telecommunications sector plummeted by 58% year-on-year to $80.78 million in Q1 2025, down from $191.57 million in Q1 2024, according to the National Bureau of Statistics (NBS). The sector also experienced a 41% quarter-on-quarter decline from $136.86 million in Q4 2024, despite a broader 67.12% surge in Nigeria’s total capital importation to $5.6 billion in Q1 2025, driven largely by banking and financing sectors.
The Association of Licensed Telecommunications Companies of Nigeria (ALTON) identified multiple taxation and high Right of Way (RoW) costs as persistent barriers to investment. ALTON stated, “Growth in telecom investments will remain stunted unless challenges like RoW charges and multiple taxation are resolved.” These issues inflate operational costs, deterring foreign investors. Engr. Ikechukwu Nnamani, CEO of Digital Reality and former president of the Association of Telecommunications Companies of Nigeria (ATCON), highlighted policy inconsistency and forex market volatility as additional hurdles. “A stable policy environment and predictable forex market are critical to attracting investment,” he noted, expressing cautious optimism due to recent forex stabilization efforts.
The Central Bank of Nigeria’s (CBN) reforms, including unified exchange rates and $4.1 billion in forex interventions in H1 2025, have helped stabilize the naira, which traded at N1,565/$1 in the parallel market in July. These measures contributed to the overall capital inflow growth, with the banking sector leading at $3.128 billion (55.44% of total inflows), fueled by ongoing recapitalization efforts. The financing sector followed with $2.097 billion (37.18%), while production/manufacturing contributed $129.92 million (2.30%).
Despite the telecom sector’s struggles, Nigeria’s economic landscape shows resilience, with the Nigerian Exchange posting a 39.98% year-to-date gain. However, the telecom sector’s decline underscores the need for targeted reforms to address structural challenges and restore investor confidence, critical for sustaining Nigeria’s broader economic momentum.
