Nigeria’s telecommunications sector has received a significant boost with a remarkable 125.23% surge in Foreign Direct Investment (FDI) during the first half of 2024.
Data from the National Bureau of Statistics (NBS) disclosed that the sector attracted $304 million in FDI in six months, marking a substantial increase compared to the $134.75 million recorded for the entire year of 2023.
According to the National Bureau of Statistics, telecom investments reached a seven-year high after plummeting to $98.37 million in H1 2018 from $319.96 million in H1 2017.
After years of consistent decline in investment, despite a significant infrastructure deficit, this year’s inflow signals a potential recovery in the sector.
This demonstrates the growing confidence of international investors in Nigeria’s telecommunications landscape. This uptick can be attributed to several factors, including increased demand for digital services, government initiatives to improve the business environment, and the sector’s resilience in the face of economic challenges.
The first quarter of 2024 saw an impressive capital inflow of $191.5 million, representing a staggering 769 per cent increase compared to the $22.05 million received in the same period in 2023.
In the second quarter of 2024, the sector attracted $113.4 million. While this was lower than the Q1 inflow, it still marked a 339 per cent increase over the $25.81 million recorded in Q2 2023.
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Furthermore, data from the Nigerian Communications Commission (NCC) paints a picture of fluctuating investment trends. In 2022, total FDI inflows to the telecom industry reached $399.9 million, a 47 per cent decline from the $753 million recorded in 2021. The 2021 increase followed the severe impact of the COVID-19 pandemic in 2020, which had sharply reduced global economic activity, causing the sector’s capital inflow to drop to $417.4 million in 2020.
While the $753 million FDI recorded in 2021 came as an increase compared with $417.4 million recorded in the preceding year, the growth came as a result of the effect COVID-19 pandemic in 2020, which saw economic activities reduced drastically across the globe.
Before that, capital inflow into the telecom industry stood at $942.8 million in 2019, which made the 2021 inflow a decline, when compared with the pre-COVID-19 year.
According to the report, the operators spent a total of N785 billion as CAPEX in 2022 compared with N1.1 trillion in 2021.