One Year After Tariff Hike, Foreign Investment in Telecoms Drops 77% to Four-year Low

By Àkànní Olúwaségún Michael

Foreign investment into Nigeria’s telecommunications sector dropped to a four-year low in the first quarter of 2026 despite a tariff increase approved last year to improve operators’ profitability and support network expansion, official data has shown.

According to the National Bureau of Statistics (NBS), the sector attracted just $25.82 million in foreign capital during Q1 2026, representing a 77.4 per cent decline from the $114.07 million recorded in the corresponding period of 2025.

The figure is the lowest quarterly inflow into the telecommunications industry since 2022 and comes roughly one year after the Nigerian Communications Commission (NCC) approved a 50 per cent increase in telecom tariffs following sustained pressure from operators.

The tariff review, announced in January 2025, was intended to help telecom companies cope with rising operating costs driven by inflation, foreign exchange volatility, soaring energy prices and increasing infrastructure expenses.

However, fresh capital importation data suggests that foreign investors have yet to significantly increase their exposure to the sector.

Data from the NBS Capital Importation Report showed that telecommunications accounted for only 0.25 per cent of Nigeria’s total capital importation of $10.37 billion during the quarter.

The broader economy, meanwhile, witnessed a sharp rebound in foreign capital inflows. Total capital importation rose by 83.8 per cent year-on-year, driven largely by portfolio investments into financial assets and money market instruments.

The banking sector emerged as the biggest beneficiary of foreign investment, attracting $7.55 billion, equivalent to nearly three-quarters of all capital imported during the quarter.

Telecoms losing ground in the investment race

The latest figures indicate that the telecommunications sector has struggled to attract foreign capital even as investors returned to other parts of the Nigerian economy.

A review of the data reveals a declining pattern in telecom inflows. The sector received $168.27 million in the third quarter of 2025 before declining to $77.26 million, $57.79 million in the fourth quarter of the year, before eventually slipping to $25.82 million in Q1 2026.

The trend raises questions about whether improved revenues resulting from higher tariffs are sufficient to attract new foreign investment into the industry.

While telecommunications investment tends to be cyclical and often depends on large financing transactions, infrastructure projects, and corporate expansion plans, the consistent decline is likely to attract attention from policymakers and industry stakeholders.

This is particularly important as the Nigerian Communications Commission (NCC) is currently working with industry stakeholders to review 26-year-old National Telecommunications Policy (NTP) 2000, in order to accommodate emerging technology trends and spart fresh investment appetite in the sector.

At the policy review workshop recently, the Executive Vice Chairman of the NCC, Aminu Maida, said the telecoms sector has become central to economic productivity and national development.

“This is no longer a narrow telecommunications conversation. The sector is no longer just a sector within the economy. It is the productivity infrastructure for the entire economy,” he said.

Telecommunications remains one of the foundations of Nigeria’s digital economy as the sector supports fintech growth, security, e-commerce, digital payments, remote work, online education, and a growing ecosystem of technology-driven businesses.