Forex crisis, naira depreciation necessitated 50% telecom tariff hike – TUC

• Festus Osifo, President of the Trade Union Congress, said Nigeria’s foreign exchange crisis and naira depreciation necessitated a 50 per cent telecom tariff hike
• He said the twin challenge impacted the operational and capital costs of telecommunication companies
• Osifo called on the government to take urgent action toward ensuring naira stability

The President of the Trade Union Congress (TUC), Festus Osifo, says the challenge of foreign exchange (forex) and the continued depreciation of the naira necessitated the recent 50 per cent increase in telecommunications tariffs by operators in Nigeria.

Osifo said the rising cost of forex impacts the operational and capital costs of telecommunications companies, which led to an upward review of tariffs.

While speaking on Arise Television’s Prime Time, Osifo said the union warned of the potential ripple effects of the fluctuating forex rate on essential services in Nigeria, especially the increase in the cost of goods and services, borne by consumers.

He said, “Sometime last year, we addressed a World Press Conference where we identified the root cause that would trigger a lot of increment in social services, and that was our FX—which is our exchange rate.

“When the naira depreciates significantly, the cost of operations for businesses rises. To stay profitable, businesses have no choice but to adjust their revenue and the easiest way to do that is by increasing the price of their goods and services.

“The cost of their (telcos’) operations in naira equivalent is going up. The reason that cost is going up is because they have to adjust revenue to remain profitable.

“If a company’s cost outweighs its revenue, it will operate at a loss. To avoid that, they increase prices, thereby transferring the financial burden to the consumers.”

Government should ensure naira stability

The TUC president further called on the government to take urgent action to ensure naira stability to mitigate the impact of forex volatility on businesses and consumers.

Osifo stressed that if the depreciation of the naira continues unchecked, the cost of living will be exacerbated and the purchasing power of Nigerians further reduced.

He said, “When our naira was sliding down when it was being devalued, we argued that if you leave this unchecked, it’s going to trickle down to literally everything.

“Today, we are seeing that prediction come true, with telecom tariffs being the latest example.”

TUC criticises Tinubu’s optimism in New Year address, questions president’s policies

Meanwhile, TheRadar earlier reported that Festus Osifo, President of the Trade Union Congress (TUC), expressed concern that the optimism conveyed in President Bola Tinubu’s New Year speech does not align with the current state of Nigeria's economy.

Appearing on Channels Television's Politics Today programme on Wednesday, January 1, evening, Osifo was critical of the President’s optimistic outlook, particularly the promises made to combat inflation, stabilise the naira, and foster economic growth.