The Nigerian telecom sector has witnessed a significant rise in Foreign Direct Investment (FDI), totaling $304 million in the first half of 2024, according to the latest figures from the National Bureau of Statistics (NBS). This marks a dramatic improvement from the entire 2023 total of $134.75 million, signaling a possible recovery in the industry.
In the first quarter of 2024, the sector attracted an impressive $191.5 million, reflecting an astounding 769% increase compared to the $22.05 million recorded in the same quarter of 2023. The second quarter saw a further inflow of $113.4 million, a 339% rise over the $25.81 million received in the second quarter of the previous year, despite being lower than the first quarter’s figures.
Historical data from the Nigerian Communications Commission (NCC) reveals a fluctuating investment trend. In 2022, total FDI in the telecom industry reached $399.9 million, down 47% from $753 million in 2021. This decline followed a rebound in 2021, when investments began to recover from the COVID-19 pandemic’s adverse effects, which had slashed capital inflows to $417.4 million in 2020.
Before the pandemic, the sector enjoyed a robust investment climate, attracting $942.8 million in 2019. However, with a decline in FDI, operators have been compelled to reduce capital expenditures (CAPEX) despite the pressing need for infrastructure upgrades. According to the NCC, CAPEX dropped by 30% in 2022, with telecom operators spending N785 billion, compared to N1.1 trillion in 2021.
This recent increase in foreign investment is viewed as a positive development for Nigeria’s telecom sector, underscoring the critical need for sustained investment to address infrastructure demands and promote further growth in the industry.
