The domestication of Nigeria’s telecommunications industry has been identified as an urgent and critical step to ensure its sustainability.
This was the focal point of discussions at the Telecoms Industry 2.0 town hall meeting, organized by the Financial Derivatives Company (FDC) in Lagos, where Mr. Bolaji Balogun, CEO of Chapel Hill Denham, delivered the keynote address.
Mr. Balogun highlighted the challenges posed by the over-dollarisation of the telecom industry, advocating for a shift towards local manufacturing and production.
“If you look at the businesses that have been successful in Nigeria in the last 30 years, there are localisation, domestication, or import substitution businesses,” he said. He noted that despite the progress made since the liberalisation of the telecoms sector 24 years ago, Nigeria still lacks domestic assembly of handsets, a gap that must be addressed.
He emphasized the need for a tariff structure that encourages domestic manufacturing within the telecom value chain.
Mr. Balogun called for government intervention in creating enabling tariffs to support local production, as well as an equity model that promotes co-investments in import substitution startups through entities like the Ministry of Finance Incorporated (MOFI) or the Nigeria Sovereign Investment Authority (NSIA).
He also urged telecom operators to publish financial statements to enhance transparency and recommended tax incentives for listed telecom companies to foster investment.
“The government should be a critical enabler for scaling infrastructure investments to unlock industry growth,” Balogun added, stressing the importance of increasing localisation, minimising foreign exchange exposure, and utilising capital markets to strengthen the sector.
In his goodwill message, Dr. Armstrong Takang, MD/CEO of the Ministry of Finance Incorporated, reiterated the transformative impact of the 2001 liberalisation of the telecom industry on Nigeria’s economy.
However, he expressed concern that the sector no longer attracts the level of investment seen in the past two decades, leading to a decline in job creation. Dr. Takang questioned whether the current policy environment is sufficient to enable telecom companies to fully leverage emerging technologies.
“We must be decisive about how the telecoms industry will evolve in the next 25 years,” he said, underscoring the need for government policies that will accelerate the sector’s growth.
Mr. John Ugochukwu Uwajumogu, Special Adviser to the President on Industry, Trade, and Investments, also spoke at the event, representing the Minister of Industry, Trade, and Investments.
He described the telecom sector as the “lifeblood of the economy” with the potential to drive significant economic growth and job creation in Nigeria. He reassured stakeholders of the government’s commitment to enhancing digital infrastructure through initiatives such as the National Broadband Policy and investments in the I.D.I.C.E. initiative.
The event’s convener, Mr. Bismark Rewane, CEO of Financial Derivatives Company, described the town hall as an opportunity to address the pressing issues within the telecom industry.
He noted that the sector is currently facing significant financial strain, with revenues plummeting from $8 billion in 2020 to $3 billion currently, while costs continue to rise.
“The telcos are in intensive care unit mode and in dire need of new investments. These new investments will not come until the pricing formula has changed,” Rewane stated.
The town hall meeting featured panel discussions exploring strategies to navigate the macroeconomic challenges facing the industry and to reposition it for future growth through substantial investments in enabling infrastructure.
Stakeholders emphasized the importance of collaboration between the public and private sectors as key to the telecom industry’s progress in Nigeria.
