A recently released report by the Nigerian Communications Commission (NCC) for the year 2022 has shed light on the distressing state of affairs within the telecom sector. The figures reveal a substantial 47% decline in total investment inflow, which amounted to $399.9 million. This decline stands in stark contrast to the more promising $753 million recorded in the preceding year, 2021.

The substantial growth seen in 2021 was largely attributed to the aftermath of the COVID-19 pandemic, a crisis that significantly impacted global economic activities. The pandemic-induced drop in investment during 2020 had spurred a rebound in the subsequent year, leading to the $753 million inflow. However, it’s essential to note that this still fell short of the $942.8 million seen in 2019, prior to the pandemic’s emergence.

The deteriorating investment climate has compelled telecom operators to adopt a cautious approach. Despite the imperative need for continuous investment in network infrastructure expansion and optimization, capital expenditure (CAPEX) has been undergoing a gradual slowdown. A case in point is the industry’s performance in 2022, where despite the high-profile 5G rollout by MTN, the sector’s CAPEX plummeted by a notable 30%. The financial data indicates that operators expended a total of N785 billion on CAPEX during 2022, a sharp drop from the N1.1 trillion spent in the previous year, 2021.

Addressing the concerning situation, Engr. Gbenga Adebayo, Chairman of the Association of Licensed Telecommunications of Nigeria (ALTON), voiced his anxieties regarding the industry’s trajectory. He pointed to the findings of the NCC’s report as a clear indication of the downward trend in foreign direct investment (FDI). “We are worried that [this trend] will continue,” Adebayo emphasized, underlining the adverse impact of fluctuating exchange rates on the industry’s stability.

He further stressed that the declining investment has dire consequences for the expansion of vital network infrastructure. “This is impacting the expansion of network infrastructure, and we are worried that the FDIs may continue to go down. This will continue to affect the performance of the operators,” Adebayo cautioned, drawing attention to the ripple effects throughout the industry.

Beyond the dwindling investment, the telecom operators are grappling with a separate hurdle – limited access to foreign exchange. Despite assurances from authorities, the promised availability of forex is yet to materialize effectively. “We are still in a long queue for forex,” Adebayo disclosed, expressing the industry’s ongoing struggle.

Acknowledging the government’s efforts to implement policies for equal access to forex, he maintained that the promised solutions have not yet translated into tangible benefits. “The bottom line is that Forex is not available as promised,” Adebayo lamented.

Despite the prevailing challenges, Adebayo conveyed a sense of cautious optimism. He acknowledged the current difficulties but highlighted the potential for improvement through consistent government policies. “We are not in the best of times, I must say, but we are hopeful that things will get better given the policy consistency of the government,” Adebayo concluded on a note of expectation.