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The recent 50% telecom tariff increase approved by the Nigerian Communications Commission (NCC) is projected to generate N1.6 trillion in tax revenue while fostering investment in telecommunications infrastructure, according to the Global System for Mobile Communications Association (GSMA).
In a statement on Wednesday, GSMA described this adjustment—the first in 12 years—as a significant step toward bridging Nigeria’s digital divide and accelerating the nation’s digital transformation.
Impact of the Tariff Increase on Digital Inclusion
The policy is expected to expand 4G coverage to 94% of the population, providing mobile internet access to an additional 9 million Nigerians, including 2 million people in underserved areas.
By enhancing investment opportunities, the tariff adjustment will drive network expansion and technological upgrades, enabling innovation in key sectors such as healthcare, education, and agriculture.
According to Angela Wamola, GSMA’s Head of Sub-Saharan Africa,
“This decision by the NCC marks a critical milestone for Nigeria’s digital economy. By enabling sustainable investment, we are improving service quality, expanding connectivity, and fostering economic growth.
However, Wamola emphasized that additional reforms are required to maximize the benefits of this tariff adjustment, including:
- Simplifying Right of Way (RoW) permits to ease infrastructure deployment.
- Implementing a Critical National Infrastructure (CNI) plan to secure telecom assets.
- Reducing the tax burden on the mobile sector to encourage long-term investment.
“Increased digitalisation across key industries—including agriculture, manufacturing, transport, trade, and government—could boost GDP by two percentage points by 2028, create nearly 2 million jobs, and generate N1.6 trillion in additional tax revenue,” she added.
Unlocking Investment and Addressing Funding Gaps
The tariff adjustment is projected to unlock over $150 million in additional investments, facilitating the expansion of 4G network coverage from 90% to 94% of the population. This move is expected to benefit approximately 9 million Nigerians, with nearly 2 million gaining access to mobile internet services in rural areas, according to GSMA Intelligence.
“This development highlights the successful collaboration between the Nigerian government, industry stakeholders, and GSMA, demonstrating how progressive regulatory policies can drive economic growth and digital inclusion,” GSMA stated.
By advocating for policies that balance affordability with infrastructure investments, GSMA has played a key role in ensuring the benefits of mobile connectivity reach all Nigerians.
Regulatory Justification and Stakeholder Reactions
On January 20, the NCC officially announced the approval of a 50% tariff increase, citing rising operational costs and the need for industry sustainability.
In a statement signed by Reuben Muoka, NCC’s Director of Public Affairs, the Commission emphasized that the decision aligns with its regulatory responsibilities under Section 108 of the Nigerian Communications Act, 2003.
However, the National Association of Telecommunications Subscribers (NATCOMS) has vowed to challenge the approved tariff hike in court, arguing that it may impact affordability for consumers.
Projected Decline in Capital Expenditures
A recent MTN Nigeria document suggests that delays in implementing tariff adjustments over the past 11 years have significantly affected telecom investments.
The report estimates that Nigeria’s telecom industry may experience a $870 million drop in capital expenditures by 2026, impacting network expansion, technology upgrades, and service deployment.
- In 2022, telecom operators invested $1.41 billion in capital expenditures.
- This figure dropped to $1.16 billion in 2023.
- It is expected to decline further to $470 million in 2024 and remain low at $500 million by 2026.
This 18% decline in projected capital investments is primarily due to the inability of telecom firms to raise tariffs, which are crucial for covering operational costs and funding network expansion.
RegTech Africa’s Perspective
The NCC’s tariff hike approval, while essential for industry sustainability, underscores the delicate balance between consumer affordability and telecom sector growth. From a RegTech perspective, this move highlights the need for:
- Regulatory compliance monitoring to ensure fair pricing policies.
- Risk assessment frameworks to evaluate telecom investment trends.
- Data-driven policymaking to optimize tariff structures while protecting consumers.
As Nigeria’s digital economy continues to expand, aligning policy reforms with regulatory technology solutions will be critical for ensuring financial sustainability, infrastructure growth, and improved digital access across all sectors.
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