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In light of recent financial losses reported by telecommunications companies listed on the Nigerian Exchange Limited (NGX), economic experts and stakeholders are raising alarms about the potential adverse effects on Nigeria’s economic growth and development.
During a breakfast session hosted by the Lagos Business School, Pan-Atlantic University, industry leaders gathered to discuss the theme “Telecom Sector: The Fulcrum for Economic Dynamism in Nigeria.” Keynote speaker Bismarck Rewane, CEO of Financial Derivatives Company, highlighted the telecom sector’s essential role in fostering economic growth, innovation, and productivity across various industries.
In his presentation, titled “Nigerian Economy on the Brink: Adapt or Collapse?”, Rewane outlined the challenges facing the sector, including rising inflation, high operating costs, limited access to foreign exchange, regulatory burdens, multiple taxation, and extortion by state and local governments. He emphasized that these challenges threaten the sector’s growth and development, citing MTN’s reported loss in the 2023 financial year as a case in point.
Rewane’s observations align with the telecom operators’ call for cost-reflective tariffs, which they argue are necessary to counter adverse economic conditions. He warned that the current economic climate is hindering the sector’s growth, potentially reducing revenue and creating a ripple effect on other industries.
“The big push theory suggests that growth in one sector can stimulate growth in others through backward and forward linkages. The telecom sector has both forward and backward linkages to various industries. This interconnectedness is crucial for economic growth, innovation, and productivity, making it a key driver of development in modern economies. If the telecom industry collapses, all other sectors will follow,” Rewane cautioned.
The session underscored the urgent need for government intervention to address the sector’s challenges and support its sustainability. Without such support, the decline of the telecom sector could have severe implications for the broader economy, affecting everything from job creation to technological advancement.
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