Nigeria’s telecommunications sector recorded a significant 58% decline in foreign direct investment, attracting only $80.78 million in Q1 2025 compared to $191.57 million the previous year.
The National Bureau of Statistics data reveals concerning trends for the telecommunications industry despite Nigeria’s overall capital importation surge to $5.6 billion during the same period, representing a 67% increase year-on-year.
Quarter-on-quarter analysis shows the telecommunications sector’s performance declined 41% from Q4 2024’s $136.86 million, highlighting persistent challenges affecting investor confidence in Nigeria’s digital infrastructure development.
According to the Association of Licensed Telecommunications Companies of Nigeria, multiple taxation and high Right of Way charges continue hindering investment growth. “We may not see steady growth in investments until industry challenges are addressed. Issues of Right of Way charges persist, alongside multiple taxation,” ALTON stated.
Digital Reality CEO and former Association of Telecommunications Companies President Ikechukwu Nnamani emphasized the need for government policy consistency to attract foreign investment. He identified forex market instability as a major deterrent for potential international investors interested in Nigeria’s telecommunications market.
“A stable environment means government consistency with policies. Instability in the forex market has discouraged many foreign investors interested in Nigeria’s telecoms,” Nnamani explained, expressing optimism about recent forex market stabilization.
The telecommunications sector’s decline contrasts sharply with banking sector performance, which captured 55.44% of total foreign investments during Q1 2025. The banking sector received $3.13 billion, largely attributed to ongoing recapitalization exercises mandated by the Central Bank of Nigeria.
Financing sector investments totaled $2.1 billion (37.18%), while production and manufacturing attracted $129.92 million (2.30%), demonstrating diverse sectoral investment patterns across Nigeria’s economy.
Telecommunications industry analysts warn that continued investment decline could impact Nigeria’s digital transformation agenda and 5G network deployment plans. The sector requires substantial capital injection for infrastructure modernization and service expansion.
Economic observers suggest that addressing regulatory bottlenecks and creating investor-friendly policies could reverse the negative investment trend in subsequent quarters.
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