NCC Targets 22% Telecom Contribution To GDP By 2027

The Nigeria Communication Commission (NCC) is set to increase the contribution of the telecommunication sector to the Gross Domestic Product (GDP) contribution to 22 per cent by the year 2027. The telecommunications sector contribution to the nation’s Gross Domestic Product (GDP) increased significantly to 16 per cent in the second quarter of 2023 from a 14.13 per cent contributed in the first quarter of 2023, and up from the 15 per cent recorded in the second quarter of 2022, Executive Vice Chairman/Chief Executive Officer of NCC, Mr Aminu Maida who disclosed this in Lagos at a conference on how to reposition the nation’s economy said the Commission planned to increase the annual net revenue of the telecommunications sector to the Federal Government by 100 per cent over the next four years, achieve at least 15 per cent year-on-year increase in investments into the telecommunications sector. Another target set by the Commission according to him is to have a 50 per cent  improvement in Quality of Service (QoS) by the end of next year, and reduce the access gap in rural areas to less than 20 per cent by 2027. He said that the reimagining of the communication sector is driven by five pillarswhich are interwoven with each other to deliver on the goal of fostering economic growth and development. He said that these pillars which include policy, infrastructure, innovation, entrepreneurship and capital, trade, and knowledge, are the bedrock of the Strategic Vision Plan (2023 – 2025) and form the guide to channel our efforts to harness the potential of the telecommunications sector and drive positive change in Nigeria. He said the vision aimed” to accelerate the growth of Nigeria as a global technical talent hub and a net exporter of talent, to deepen and accelerate our position in global research in key technology areas and raise the complexity and dynamics of our economy by significantly increasing the level of digital literacy across Nigeria.” He said the programme which has already commenced  with over one million applications by potential trainees is expected to increase the level of digital and technical skills among Nigerians, especially young and middle-level talents, to 70 per cent by the end of 2027.  This he said will position Nigerians to productively contribute to the economy and place the country in the top 25 percentile of research globally in the key areas of Artificial Intelligence (AI), Unmanned Aerial Vehicles (UAVs), IoT, Robotics, Blockchain, and Additive Manufacturing in keeping with the strategic plan unveiled by the Honourable Minister. Speaking further he said “We believe that attaining these targets will increase our pool of technically skilled persons to the global market. With more talents in these areas, we expect that potential employers of digital and technical skills in the international scene will begin to engage more Nigerians.”

Multiple Taxations Discouraging Investments In Telecoms Industry, Operators Lament

Chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON) Engr. Gbenga Adebayo has said that the challenge of multiple taxation is one of the major factors discouraging further investments in the industry. This is coming on the heels of the Capital Importation data released by the National Bureau of Statistics (NBS) which shows a plunge in Foreign Direct Investments in Nigeria’s telecommunications sector in the second quarter of 2023, attracting only $25.81 million as against $153.50 million recorded in the same period last year, representing a 494 per cent decline year on year. The NBS data also revealed that the telecom sector accounted for 2.51 per cent of the total capital inflow into the economy in the second quarter of 2023, which stood at $1.03 billion. Reacting to the report, Adebayo said telecom operators are currently paying a total of 39 taxes and levies, and governments at different levels in the country keep coming up with different charges. He said the undefined tax regime in the industry has made planning and projections very difficult for players in the industry, adding that potential investors are also on the lookout for these factors and are still watching. Expressing a similar view, the immediate past President of the Association of Telecommunications Company of Nigeria (ATCON) another umbrella body of players in the telecom industry, Engr. Ikechukwu Nnamani also observed that instability in the country’s forex market has been a major discouragement for many foreign investors who are interested in the country’s telecoms. “It has been estimated that the country would require $100 billion in investments in the next 10 years to bridge the existing infrastructure gap in the telecom sector, but where is the money going to come from? The exchange rate situation in Nigeria is of serious concern for foreign investors; they are not sure of what the situation will be by the time they want to repatriate their returns. Their returns on investments could be halved due to the fluctuations in the exchange rate. If we want to see the investors, we have to first address the foreign exchange situation,” he said. While there has been a general downtrend in FDI in the country’s economy since the outbreak of the coronavirus (COVID-19) pandemic in 2020, the telecoms sector has been recording a consistent decline in investments over the last 5 years.

Foreign Telcos Reject New NCC Funds Repatriation Policy

Airtel Nigeria and some other foreign telecom companies operating in Nigeria have rejected the Corporate Governance provision by the Nigerian Communications Commission (NCC) on the repatriation of funds. Section 14 (16) of the Corporate Governance Guidelines published by the NCC, which the operators are frowning at states: “The Board shall ensure a licensee seeking to repatriate funds over 30 per cent of its annual net profit shall obtain the prior written approval of the Commission.” Expressing their displeasure during a public inquiry on the draft guidelines, the telecom operators, including IHS Nigeria, ATC Nigeria, and Airtel Nigeria argued that the provision would discourage investments even as it contradicts existing laws on the repatriation of funds by foreign companies operating in Nigeria. In its written submission during the inquiry, a tower company, ATC Nigeria Wireless Infrastructure Limited, stated: “Repatriation of funds ensures that foreign investors successfully reap the dividend of their investment (particularly when the licensee has mainly foreign investors). Waiting for the approval of the NCC before funds are repatriated will lead to investor dissatisfaction and affect the smooth operation of the company. “We respectfully suggest that the approval of the NCC be obtained where the repatriation involves a significant amount that might jeopardize the company’s operations. The repatriation threshold that would require the approval of NCC be fixed at 80 per cent.” Expressing similar concern over the same provision, Airtel Nigeria in its submission to the regulator said the Section 14(16) Guidelines are in contravention of Section 15(4) of the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act Chapter F34, 1995 18 which guarantees unrestrictive transferability of returns from Foreign Direct Investment. “It is also at variance with the Federal Government’s policy guaranteeing 100 per cent repatriation of profit from investments in the country. This pre-approval requirement from the Regulator to repatriate more than 30 percent of net profit could discourage Foreign Direct Investment (FDI) in the industry. According to HIS Nigeria, the provision has far-reaching implications and would only create bottlenecks and discourage investments, both local and foreign. “Given that foreign shareholders and bondholders are entitled to receive dividends and interest respectively depending on the capital structure of the entities, the inability to timely meet interest repayments portends a negative connotation for the country especially as lenders would be reluctant to extend further credit to local borrowers and this eventually adversely impacts sovereign credit ratings. “Requiring prior written approval of the Commission to repatriate funds is unduly restrictive and at variance with the policy position of the current government administration which has expressed the desire to attract foreign investments. Meanwhile, the Nigerian Communications Commission in its response to the operators’ concern said it had taken note of all their submissions and would take care of it in its ongoing review of the document.

Telcos rake in N3.33trn revenue from data, other services —NCC

MTN Nigeria, Airtel, Glo, and other telecom operators made a whopping N3.33 trillion as revenue from calls, data, SMS, and other telecom services in 2022, the Nigerian Communications Commission (NCC) has said in its 2022 Subscriber/Network Data Annual Report. According to the commission, the total number of active subscribers increased from 195,463,898 subscriptions in 2021 to 222,571,568 active voice subscriptions as of December 2022, a 13.86 percent year-on-year increase. “The increase in the Operators’ subscriber base was attributed to a number of reasons which includes subscriber loyalty, promos, seasonal effects, aggressive consumer acquisition drive, and competitive product offerings across all the networks,” the commission said. It noted that the growth in active subscriptions impacted positively on other derived telecom indicators such as teledensity, Internet penetration as well as broadband penetration. Data usage also continued its surge in 2022. It increased by 46.77 per cent to 518,381.78TB as of the end of the year. The NCC stated, “There was an increase in the volume of data consumed at the year-end December 2022 when compared with the year-end December 2021. The total volume of data consumed by subscribers increased to 518,381.78TB as of December 2022 from 353,118.89TB as of December 2021, representing an increase of 46.77 per cent in data consumption within the period,” the report said.