Telecommunications operators in Nigeria have expressed optimism about increased investment in the sector in 2025, citing the continued stability of the Naira as a key driver of growth. Industry stakeholders believe that the recent stability in the foreign exchange market has created a more predictable financial landscape, enabling better planning for capital-intensive projects.
Tony Emoekpere, President of the Association of Telecommunications Companies of Nigeria (ATCON), highlighted that while the depreciation of the Naira has posed challenges, the primary concern for operators has been the volatility of the forex market. According to Emoekpere, a more consistent exchange rate allows for improved financial forecasting and investment decisions across the telecoms sector.
The foreign exchange market saw significant improvements in late 2024, following a period of severe volatility between 2023 and 2024, during which the Naira experienced sharp devaluation due to supply constraints and fluctuating demand. This depreciation led to a surge in parallel market activity, creating further instability in the currency market. However, by the end of 2024, the official exchange rate stabilized around N1,535 to N1,538 per US dollar, while parallel market rates hovered between N1,650 and N1,655 per dollar. This relative calm in the currency market has bolstered investor confidence, particularly in sectors like telecommunications, where long-term infrastructure investments require financial predictability.
Investment in the telecommunications sector in Nigeria over the past five years has shown steady growth despite economic challenges. Between 2019 and 2024, the sector attracted over $5 billion in foreign direct investment, driven by increasing demand for mobile connectivity and digital services. Major projects during this period included the expansion of 4G networks, the launch of 5G services, and the construction of fiber optic infrastructure to improve broadband penetration.
The investment climate for the telecommunications sector in Nigeria is also influenced by key policy and regulatory decisions. Recent discussions around tariff adjustments, such as the proposed 100% increase in telecom tariffs advocated by Karl Toriola of MTN Nigeria, have sparked debate. While some stakeholders argue that higher tariffs could drive better service quality and infrastructure development, others have expressed concerns about affordability and public backlash, as seen in reactions to Bismarck Rewane’s endorsement of tariff hikes. Policymakers are therefore tasked with balancing investor incentives and consumer protection to sustain the positive investment trajectory.
Industry analysts suggest that continued exchange rate stability will encourage greater capital inflows into the telecoms industry, supporting infrastructure expansion, enhanced service quality, and wider network coverage across Nigeria. However, they stress that sustaining this stability will require proactive policies from the Central Bank of Nigeria (CBN) and other regulatory authorities.
Telecoms operators are urging policymakers to maintain forex stability, emphasizing its importance in sustaining the momentum for increased sectoral investments in the coming year. With a stable currency, the industry is poised for further growth, benefiting both investors and consumers with better connectivity and service improvements.
The Nigerian government’s 2025 budget has been formulated with an exchange rate assumption of approximately N1,500 to the US dollar. This conservative estimate aims to provide a stable fiscal environment for investment planning, including in the telecommunications sector. Analysts view this assumption as a positive step towards maintaining macroeconomic stability and encouraging continued capital inflows.
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