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In the first quarter of 2024, Nigeria’s telecommunications sector attracted $191.5 million in Foreign Direct Investment (FDI), marking a substantial increase from previous years.
According to the National Bureau of Statistics (NBS), this figure represents a dramatic 769% rise compared to the $22.05 million FDI recorded in Q1 2023 and a significant increase from the $57.79 million in the same quarter of 2022. For the entirety of 2023, the sector drew $134.75 million in FDI.
This surge in foreign investment comes at a time when Nigeria’s $76 billion telecom sector has faced numerous challenges, including economic instability and regulatory issues. In 2023, service providers struggled to attract foreign investment due to a turbulent economic environment marked by high inflation, a weakened naira, and foreign exchange shortages. However, recent measures such as foreign exchange rate harmonization, the clearance of forex backlogs, and adjustments in monetary policy have begun to restore investor confidence.
Karl Toriola, CEO of MTN Nigeria, noted in the company’s 2023 financial report that the year was characterized by “rising inflation, currency devaluation, and foreign exchange shortages,” which created a challenging operating environment.
The influx of $191.5 million in Q1 2024 is a promising development for Nigeria’s goal to connect at least 70% of its population to broadband by 2025. This new capital injection is expected to advance broadband expansion efforts in a country that currently has a 90,000km fiber optic gap. Industry experts estimate that achieving the 70% broadband target will require approximately $3.4 billion in investments for fiber infrastructure.
Recognizing the need for substantial investment, the Federal Government has launched a Special Purpose Vehicle (SPV) to facilitate the deployment of an additional 90,000km of fiber optic cable. This initiative aims to complement existing infrastructure and extend universal internet access across Nigeria.
Dr. Bosun Tijani, Minister of Communications, Innovation, and Digital Economy, emphasized that the SPV will work with government and private sector partners to enhance Nigeria’s connectivity. “Building on our existing work with the Broadband Alliance, this increased connectivity will help bridge the current coverage gap by connecting over 200,000 educational, healthcare, and social institutions, ensuring that a broader segment of the population benefits from internet access,” Dr. Tijani said.
The SPV initiative reflects the government’s commitment to expanding the country’s telecommunications infrastructure and achieving its broadband connectivity goals.
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