Economy
Tariff hike: Telcos, ICT firms owe banks N1.69tn
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Information, communication, and technology firms, including telecommunications companies in Nigeria, owed Deposit Money Banks N1.69tn as of September 2024 amid telcos’ calls for a hike in the tariff payable by subscribers for data and voice calls.
Figures obtained from the Central Bank of Nigeria’s quarterly statistical bulletin indicate that the indebtedness of the telcos and the other ICT firms represents a year-on-year decrease of N68.04bn, or 3.9 per cent, compared to the N1.77tn owed in September 2023.
The decline reflects the impact of the CBN’s repeated interest rate hikes, which has tightened monetary conditions and discouraged borrowing within the sector.
Month-on-month, however, there was a slight increase of N31.61bn, or 1.9 per cent, from the N1.66tn recorded in August 2024.
The year-on-year analysis shows that credit to the ICT sector experienced mixed trends throughout 2024.
In January, credit stood at N2.47tn, marking a significant increase of N1.23tn, or 99.3 per cent, compared to N1.24tn in January 2023.
However, by February, credit had declined to N2.35tn, though it still represented an 88.4 per cent increase year-on-year, with a difference of N1.10tn compared to February 2023.
By March, the pace of borrowing slowed further, with credit falling to N1.67tn. This represented a year-on-year increase of N385.24bn, or 30 per cent, compared to March 2023.
The trend continued into April, where credit remained relatively stable at N1.66tn, up N241.90bn, or 17 per cent, year-on-year.
In May, credit rose slightly to N1.68tn, reflecting an N308.38bn, or 22.4 per cent, an increase compared to the same period in 2023.
From June, year-on-year figures began to show a decline. Credit to the sector dropped to N1.64tn in June, representing a decrease of N81.59bn, or 4.7 per cent, compared to June 2023.
July saw a further decline to N1.69tn, down N48.93bn, or 2.8 per cent, from July 2023.
In August, the decline deepened, with credit falling to N1.67tn, a reduction of N107.37bn, or six per cent, compared to the N1.77tn recorded in August 2023.
By September, the year-on-year decrease of N68.04bn drew attention to the cautious borrowing stance adopted by firms in response to persistent economic uncertainties and high interest rates.
The decline in credit to the ICT sector throughout 2024 can be attributed to the CBN’s tight monetary policies, which have raised the cost of borrowing.
The apex bank has consistently hiked interest rates in a bid to curb inflation, with its monetary policy rate standing at a record high for most of the year.
CBN Governor Yemi Cardoso, who assumed office in September 2023, has overseen six interest rate hikes in 2024.
In February, the Monetary Policy Rate increased by 400 basis points, moving from 18.75 per cent to 22.75 per cent, the largest single hike of the year.
This was followed by another increase in March to 24.75 per cent. In May, the rate was raised again to 26.25 per cent, and by July, it reached 26.75 per cent.
The tightening cycle continued with an increase to 27.25 per cent in September, and the most recent hike in November brought the rate to 27.50 per cent.
These cumulative increases, totalling 875 basis points, are part of efforts to combat inflation and stabilise the economy.
This has had a direct impact on the borrowing capacity of firms, particularly those in capital-intensive sectors such as ICT.
Also, macroeconomic challenges, including exchange rate volatility and rising operational costs, have further constrained borrowing activity.
Despite these challenges, the ICT sector remains a critical driver of Nigeria’s economy, contributing significantly to Gross Domestic Product growth and employment.
Activities in the ICT sector contributed 16.35 per cent to Nigeria’s real GDP in Q3 2024, a decline from the 19.78 per cent it added in the previous quarter.
The National Bureau of Statistics disclosed this in the Q3 2024 GDP report.
The contribution was, however, higher than the 15.97 per cent contributed by the sector in the same period of last year.
According to the NBS, the ICT sector comprises the four activities of Telecommunications and Information Services: Publishing, Motion Picture, Sound Recording, and Music Production, as well as Broadcasting.
In the third quarter of 2024, the sector recorded a growth rate of 5.92 per cent in real terms, year-on-year.
This was driven largely by activities in the telecommunications sub-sector, which contributed 13.94 per cent to the GDP in the real term.
According to NBS, the telecom industry was the third-largest contributor to the real GDP in Q3 2024, coming behind only crop production and trade industries, contributing 26.51 per cent and 14.78 per cent, respectively.
The telecom industry, which is dominated by mobile network operators including MTN, Globacom, Airtel, 9mobile, and Internet Service Providers, is also driving a lot of activities in every other sector of the economy.
The closest sub-sector to telecoms in the ICT sector in terms of contribution was Broadcasting, which added 1.37 per cent.
The NBS data further revealed that the ICT sector contributed 11.30 per cent to the total Nominal GDP in the third quarter of 2024, lower than the rate of 11.57 per cent recorded in the same quarter of 2023 and lower than the 14.19 per cent it contributed in the preceding quarter.
In nominal terms, in the third quarter of 2024, the sector growth was recorded at 14.51 per cent (year-on-year), a 25.75 percentage points decrease from the rate of 40.27 per cent recorded in the same quarter of 2023 and 2.65 percentage points higher than the rate recorded in the preceding quarter.
Despite being a major contributor to the country’s GDP, the Nigerian telecommunications sector recorded an 87 per cent decline in foreign investments for the third quarter of 2024, marking a significant downtrend from the previous two quarters of the year.
The NBS data for capital importation showed that the sector attracted only $14.4m in capital importation in Q3, a sharp decline from the $113.42m investments recorded in Q2.
Year-on-year, the Q3 2024 capital importation for the telecom sector also represents a 77 per cent decline compared to the $64.05m recorded in the same period last year.
Despite the decline in the third quarter, the telecom sector has had better foreign investments this year than in previous years.
The NBS data showed that the sector attracted a $191.5m capital inflow in the first quarter of this year, marking a significant 769 per cent increase compared with $22.05m received in Q1 2023.
The investments recorded in the first quarter alone surpassed the total investments recorded by the sector in the full year 2023, which stood at $134.75m.
This came after years of consistent decline in investments, even with a gaping infrastructure gap requiring billions of investments to bridge.
In Q2 2024, FDIs in the sector stood at $113.4m. While this is lower than the inflow recorded in the preceding quarter, it represents a 339 per cent increase over the $25.81m capital inflow recorded in the same period last year.
Between January and September 2024, MTN Nigeria’s core capital expenditure dropped 27.79 per cent to N217.64bn, while Airtel’s capex fell 36.59 per cent to $149m.
This investment decline is tied to a N514.93bn loss between January and September 2024 for MTNN and a 46.9 per cent decline to $755m in Airtel Nigeria’s revenue in the period.
To adjust to these harsh economic realities, telcos renewed their push for tariff hikes this year.
According to the Association of Licensed Telecom Operators of Nigeria and the Association of Telecommunication Companies of Nigeria, telecom operators have advocated for higher prices for the last 11 years.
The telcos stressed the need for cost-reflective tariffs in the face of adverse economic headwinds like high inflation of 34.6 per cent in November 2024 and losses resulting from foreign exchange fluctuations.
However, telecommunications companies in Nigeria were mandated to increase their investments in network infrastructure following the approval of a tariff hike after 11 years of lobbying.
This follows an assertion by Bosun Tijani, the minister of communications, innovation, and digital economy, that tariff hikes will happen in the interests of the industry’s sustainability. “Tariff will go up,” he said.
The condition of this increase has been tied to a commitment by telcos to increase investments in the sector.
Economy
How to apply: FG opens access to 250,000 free business name registrations
The Federal Government has opened access to 250,000 free business name registrations for eligible entrepreneurs across Nigeria as part of efforts to support the growth and development of Micro, Small and Medium Enterprises (MSMEs).
The initiative, approved under the administration of President Bola Ahmed Tinubu, is designed to ease the cost of formalising small businesses and encourage more entrepreneurs to register their businesses.
Interested and eligible entrepreneurs have been advised to apply through the official SMEDAN portal at portal.smedan.gov.ng to become beneficiaries of the programme.
The registration is completely free, with the Corporate Affairs Commission (CAC) expected to process the business name registration without charging applicants.
The government also warned entrepreneurs to be wary of fraudsters who may attempt to exploit the programme.
Applicants have been advised not to pay anyone claiming to have the ability to fast-track or secure their registration, as no payment is required for the approved free registration.
Entrepreneurs seeking to benefit from the initiative are therefore encouraged to use only the official SMEDAN portal and avoid sharing payments or personal information with unauthorised agents.
Economy
Over 5,000 fibre cuts recorded in six months – NCC
The Nigerian Communications Commission (NCC) has disclosed that more than 5,000 fibre-optic cable cut incidents were recorded across the country in the first six months of 2026, with road construction, excavation and related civil works identified among the major causes.
The Executive Vice-Chairman of the NCC, Dr Aminu Maida, disclosed this on Tuesday at a stakeholders’ workshop on the protection of fibre-optic cables during road construction, excavation and other activities in Nigeria.
Maida said the high number of incidents required stronger collaboration between telecommunications operators, road contractors, government agencies, regulators and security institutions to prevent further damage to critical telecommunications infrastructure.
According to him, many of the incidents occurred because of inadequate coordination among stakeholders involved in road and other construction activities. He said the consequences of fibre cuts extended beyond the immediate physical damage to cables, stressing that they could disrupt essential services and affect millions of Nigerians.
The NCC boss recalled the nationwide telecommunications disruption in February 2024, when fibre cuts, including those caused by road construction, affected one of the major telecommunications operators. He said millions of subscribers were unable to make calls, send messages or access the internet for several hours, while subscribers who moved to alternative networks caused congestion on those networks.
According to him, the incident demonstrated how damage to one network could quickly have wider national consequences.
“In the first six months of this year alone, more than 5,000 fibre cut incidents were reported from road excavation, construction, and related civil work. A damaged fibre cable is therefore not simply a cost to an operator, it is a cost to Nigerians and to the wider economy.
“Those affected were not numbers in an incident report. They were parents, businesses, workers, and citizens cut off from people and services on which they depended on,” Maida said.
He stressed that preventing fibre cuts should be prioritised rather than waiting to repair damaged infrastructure after incidents had occurred.
Maida said telecommunications operators must provide accurate information on the location of their infrastructure and respond promptly when contacted before construction begins. He added that contractors must check for underground infrastructure before excavation and make adequate plans for its protection.
The NCC chief also urged regulators and security agencies to provide guidance and ensure accountability, stressing that coordination should form part of the design and execution of every relevant infrastructure project.
He said the commission remained committed to working with public and private stakeholders to make coordination a standard practice in road construction and other civil works.
Earlier, the Director of Critical National Assets and Infrastructure Protection in the Office of the National Security Adviser, AVM Effiong Ewa, said the protection of fibre-optic infrastructure was a shared national responsibility.
Ewa noted that telecommunications infrastructure had been designated as Critical National Information Infrastructure, warning that negligence or interference that exposed the assets to damage could constitute an offence under Nigeria’s legal framework.
He called for strict adherence to established protocols, guidelines and procedures during construction and maintenance activities.
Also speaking, the Permanent Secretary, Federal Ministry of Works, Mr Rafiu Adeladan, said the ministry recognised that road and telecommunications infrastructure often operated within the same physical space.
He said excavation, grading, reconstruction, utility relocation and other road activities could inadvertently damage vital fibre-optic infrastructure where adequate coordination and precautions were not in place.
Adeladan called for stronger mechanisms for coordination and information sharing before and during road construction activities. He said road contractors, consultants and relevant agencies should have access to accurate information on the location of telecommunications infrastructure before excavation begins.
On his part, the Permanent Secretary, Federal Ministry of Communications, Innovation and Digital Economy, Engr Nadungu Gagare, said protecting telecommunications infrastructure was not the responsibility of one institution, but required collaboration among government ministries, regulators, security agencies, construction companies, utility providers and other stakeholders.
Gagare said the Federal Government had established a tripartite standing committee on the protection of fibre-optic infrastructure to strengthen collaboration and promote a coordinated approach to infrastructure protection.
He said the committee would also promote compliance with established standards and right-of-way regulations, improve information sharing and support measures to prevent avoidable damage.
The workshop, organised by the Federal Ministry of Communications, Innovation and Digital Economy in collaboration with the Federal Ministry of Works, NCC, Office of the National Security Adviser and Nigeria Security and Civil Defence Corps, is aimed at developing practical measures to protect fibre-optic cables during road construction and other civil works.
Economy
NRS boss, Adedeji under fire over Nigerian economy comment
Nigerians have tackled the Executive Chairman of the Nigeria Revenue Service, Zacch Adedeji, over his recent comment about critics of economic reforms under President Bola Ahmed Tinubu.
DAILY POST reports that in a viral video, Adedeji questioned critics of Tinubu’s economic reforms about what they would have done differently.
“That is what I get worried about when I listen to some people about the economy and everything.
“Just ask them, what would they do differently? Mr President, I don’t want you to wonder. You have elevated the system from what they know and wonder,” Adedeji told President Tinubu.
Adedeji’s comment triggered reactions from Nigerians on X.
Reacting, a development professional and former Director-General of the Bureau of Public Service Reforms, Joe Abah, described Adedeji’s comment as insensitive.
“If true, this is a deeply insensitive statement.
“But to answer the question of what I would have done differently, I can just look at the UK’s Andy Burnham, who is trying to tackle the cost of living.
“In just 19 days, he has removed the 5 percent VAT on domestic electricity (it is 7.5 percent in Nigeria); capped bus fares at £2 per ride by reimbursing private sector operators for the difference in real costs; pledged a 20 percent cut in business rates for pubs and clubs (an important part of British social life); maintained and adjusted Universal Credit to favour the poorest and most vulnerable.
“So, I would have used the increasing tax revenue to tackle the cost of living. That is what I would have done differently at my own level. Hope that helps,” he said on X on Saturday.
Similarly, a lawyer known, Vena Ikem wrote on X: “He should ask himself what all the millions of dollars he is spending mean to the tax he is collecting even from poor people. If karma truly fulfils, this man will get his just deserts in the land of the living. This arrogance is from getting away with stealing tax money.”
Also, Adekunle Oderinde wrote on X: “The entire convoy of Zacch Adedeji is more expensive and longer than the convoy of UK Prime Minister, yet he is talking about suffering Nigerians complaining about the effects of the policies of his principal, President Tinubu, who drives an expensive and long convoy on scarce resources.”
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