Investment in the telecommunications sector dropped to $111.91m in the first three quarters of 2023, down 61.22 per cent from $288.55m in the same period of 2022, according to the National Bureau of Statistics.
This coincides with a dry period for foreign investments in Nigeria, as total foreign investments into the country fell by 33.99 per cent to $2.82bn in the period under review from $4.27bn in the same period of 2022, signifying investors apathy to the country.
Commenting on the total foreign investments into the country, the NBS said, “In Q3 2023, total capital importation into Nigeria stood at $654.65m, lower than $1.16m recorded in Q3 2022, indicating a decline of 43.55 per cent.
“In comparison to the preceding quarter, capital importation fell by 36.45 per cent from $1.03m in Q2 2023. Other Investment ranked top accounting for 77.56 per cent ($507.77m) of total capital importation in Q3 2023, followed by portfolio investment with 13.31 per cent ($87.11m) and foreign direct investment with 9.13 per cent ($59.77m).”
The slowdown in foreign investments is happening despite increasing rollouts in 4G and 5G networks.
According to telcos, the paucity of forex is not necessarily slowing down their investments.
One of the telcos, MTN Nigeria, stated, “Despite the paucity of forex, we continued to invest in the capacity and coverage of our network, focusing on the 4G and 5G networks. Capex increased by 6.9 per cent to N405bn, reflecting the impact of the currency devaluation.”
The firm stated that it “signed a $125m trade facility with Access Bank UK and raised N125bn through commercial paper in line with our funding strategy to support capex deployment”.
Foreign investment into the telecoms space is set to fall for the second successive year after falling by 46.89 per cent to $399.91m in 2022 from $753.05m in the previous year.
At the time, an industry expert lamented to The PUNCH, “Lack of forex has impacted how we can import equipment into the country. This has reduced investments too. There is also the issue of end-user certificates. Because for us to import some equipment into the country, we need the certification of the security agencies, especially the National Security Adviser’s office.”