Foreign investments in the telecommunication and IT service sectors rose by 310.11 per cent year-on-year to $238.11m in the first quarter of 2023.
Capital importation increased from $58.06m as of Q1, 2022 to $238.11m as of Q1, 2023, according to data obtained from the National Bureau of Statistics.
During the quarter under review, IT services witnessed a 79,922.22 per cent growth in foreign investments, growing from $270,000 in Q1, 2022 to $216.06m.
Telecoms recorded a 61.85 per cent decline in investments to $22.05m from $57.79m despite the increasing rollout of 4G and 5G networks.
Total capital importation into the country fell to $1.13bn in the quarter from $1.57bn in Q1, 2022.
Commenting on the foreign inflow, the NBS said, “Disaggregated by sectors, capital importation into the banking sector recorded the highest inflow of $304.56m, representing 26.89 per cent of total capital imported in Q1 2023.
“This was followed by capital imported into the production sector, valued at $256.12m (22.61 per cent), and IT Services with $216.06m (19.08 per cent).”
The NBS attributed the decline in telecoms funding to the difficulties investors had been having repatriating funds to their home country.
However, the floating of the country’s foreign exchange by the President Bola Tinubu and increasing network rollout from the telcos are expected to increase inflows in the coming quarters.
In 2022, increased 5G rollout and 4G expansion boosted foreign investments into the telecoms sector by 325.12 per cent in 2022, with capital importation growing to $456.82m from $107.46m in 2021.
According to GSMA, the global body for telcos, 5G rollout in 10 top cities in the country would cost telcos $500m as they would need to build 6,000 base stations, which will boost foreign investments.
Recently, the Executive Vice Chairman of the Nigerian Communications Commission, Prof. Umar Danbatta, disclosed that total investments in the telecoms space hit $75.6bn as of the end of 2021.
According to him, this is a combination of foreign direct investment and local investment as of 2021.
He noted that in 2018, the investment profile in the sector stood at $68bn, increased to $70.5bn in 2019 and $72bn in 2020.
To further boost investments in the space, Danbatta recently urged international telecom companies and potential investors to invest in the country’s telecoms sector.
According to him, the country’s population has made its telecom sector an attractive investment proposition.
He said, “Our national plan is to achieve 70 per cent broadband penetration by 2025. We still have less than 50 per cent penetration. This means there is huge investment potential for investors. Nigeria’s telecom sector needs more investment in the area of infrastructure deployment.
“The importance of this event for us as a commission is to showcase the NCC as a Nigerian brand, a foremost telecom regulator in Africa and beyond and to bring about the much-needed investment that will enhance development of the Nigerian telecom industry.”