Foreign direct investment (FDI) into Nigeria’s telecommunications sector declined sharply in the first quarter of 2025, falling by 58% year-on-year to $80.78 million, according to the latest capital importation report released by the National Bureau of Statistics (NBS).
This compares to $191.57 million recorded in Q1 2024, underscoring a significant loss of investor confidence in the sector over the past year.
On a quarter-on-quarter basis, FDI into the telecom industry also contracted by 41% when compared to the $136.86 million reported in Q4 2024.
The telecom sector’s FDI downturn stands in contrast to the broader trend across the Nigerian economy. Total capital importation into the country reached $5.6 billion in Q1 2025, representing a 67.12% increase from the $3.4 billion recorded in the corresponding period of 2024.
Industry analysts attribute the persistent decline in telecoms investment to unresolved structural and regulatory issues. Key concerns include insecurity, multiple taxation, vandalism of infrastructure, high Right of Way (RoW) charges, and broader macroeconomic instability.
The Association of Licensed Telecommunications Operators of Nigeria (ALTON) noted that the sector continues to suffer under the weight of overlapping taxes and levies at the federal, state, and local government levels.
In addition, delays and excessive costs associated with RoW permits have significantly slowed infrastructure rollout efforts across key regions.
“We may not see a steady growth in investments until the industry challenges are addressed,” ALTON said in a recent statement. “Issues of Right of Way charges are still there, likewise multiple taxation, which continue to discourage investors.”
Despite being one of the most critical enablers of Nigeria’s digital economy, the telecom industry is facing increased capital flight and a weakening investment outlook.
This trend threatens the sector’s ability to sustain network expansion, upgrade to next-generation 5G infrastructure, and meet surging consumer demand for broadband services.
The sector has historically been a key driver of financial inclusion, digital transformation, and economic productivity.
However, the sustained drop in foreign capital raises questions about the long-term sustainability of growth targets outlined in Nigeria’s digital economy roadmap.
Analysts warn that unless targeted reforms are implemented to remove policy bottlenecks and improve investor protections, Nigeria risks losing its competitive edge as a telecom investment destination in sub-Saharan Africa.
Stakeholders have called for urgent regulatory intervention to harmonize taxes, lower RoW charges, improve security for telecom infrastructure, and create a more transparent investment environment. Without these changes, capital inflows into the sector may remain constrained despite overall improvements in the country’s investment climate.
As of Q1 2025, the telecommunications sector ranks among the few segments experiencing net declines in FDI, even as confidence gradually returns to Nigeria’s broader economy.