Nigeria’s telecom sector records 87% decline in foreign investments in Q3 2024

• Nigeria’s telecom sector recorded an 87 per cent decline in foreign investments in the third quarter of 2024
• The figure represents a 77 per cent decline compared to the same quarter in 2023
• The sector, however, performed better overall in 2024 compared to 2023

Nigeria’s telecommunications sector recorded an 87 per cent decline in foreign investments for the third quarter (Q3) of 2024, according to the latest capital importation data released by the National Bureau of Statistics (NBS).

The sector attracted only $14.4 million in capital importation in Q3, representing a significant 87 per cent decline from the $113.42 million investments recorded in the second quarter of the year.

On a year-on-year basis, capital importation for the telecom sector declined by 77 per cent compared to the $64.05 million recorded in the same period in 2023.

Telecom sector performed better than in 2023

Analysis of the NBS data shows that Nigeria’s telecom sector performed better overall in 2024 in terms of foreign investments than it did in 2023, despite the Q3 2024 decline.

The sector recorded $304 million as foreign direct investments in the first half of 2024

In the first quarter of the year, the sector attracted a $191.5 million capital inflow, a 769 per cent increase compared with the $22.05 million received in Q1 2023.

The Q1 2024 investments alone were more than the total investments recorded by the sector in the full year 2023, which stood at $134.75 million.

In Q2 2024, the sector attracted $113.4 million as foreign direct investments. Though this figure is less than the inflow recorded in Q1 2024, it is 339 per cent higher than the $25.81 capital inflow recorded in the same period in 2023.

Timeline of telecom sector investment decline 

According to the telecom industry report for 2022 published by the Nigerian Communications Commission (NCC) in 2023, total investment inflow to the sector in 2022 was $399.9 billion, a 47 per cent decline when compared to the $753 million recorded in 2021. 

The $753 million recorded by the sector in 2021 was higher than the $417.4 million recorded in 2020, due mainly to the impact of the COVID-19 pandemic in 2020, which led to a reduction in economic activities globally.

In 2019, the telecom industry recorded capital inflow to the tune of $942.8 million.

The declining investment in the sector has resulted in the slow-down of capital expenditure by operators.

According to the industry’s 2022 report, there was a 30 per cent decline in the industry’s capital expenditure in the year, as operators spent N785 billion in capital expenditure in 2022 compared with N1.1 trillion in 2021.

Telecom experts propose strategies to protect Nigeria's infrastructure from cyber threats

Meanwhile, TheRadar reported that telecommunications infrastructure company IHS Towers, the Association of Licensed Telecom Operators of Nigeria (ALTON), and the Nigerian Communications Commission (NCC) proposed a series of strategies to safeguard Nigeria’s telecommunications infrastructure from cyber threats, theft, and vandalism. 

These recommendations were made during a breakout session at the 30th Nigerian Economic Summit in Abuja on October 15, with the theme, ‘Protecting Critical National Infrastructure: Securing Nigeria’s Telecommunications Sector for Sustainable Growth.’