Foreign direct investments (FDI) in Nigeria’s telecommunications sector have seen a decline in the past four years, with 2020 recording the lowest inflow. According to data from the Nigerian Communications Commission (NCC) and the Central Bank of Nigeria (CBN), FDI in the telecommunications industry totaled $417.5 million in 2020, compared to $942.9 million in 2019.
The decrease in capital importation is mainly attributed to the outbreak of the COVID-19 pandemic, which had a negative impact on businesses worldwide. In 2021, FDI slightly increased to $753 million, but in the following year, it dropped to $399.9 million.
Despite the decline in FDI, the telecommunications sector continues to play a significant role in Nigeria’s gross domestic product (GDP). Its contribution rose from 10.6% in the fourth quarter of 2019 to 12.45% in the fourth quarter of 2020, and further increased to 12.61% in the fourth quarter of 2021. In the latest quarter, the fourth quarter of 2022, the sector’s contribution to GDP stood at 13.55%.
In terms of subscriber growth, Nigeria has seen a steady increase in the number of active voice subscriptions. As of December 2022, the total number of active voice subscriptions across all market segments reached 222.6 million, representing a 13.9% growth compared to the previous year. The density of telecommunications networks also increased from 102.4% in 2021 to 116.6% in 2022.
The growth in subscribers can be attributed to the lifting of the ban on the sale and registration of new SIM cards, SIM card swaps, and GSM operator porting following a nationwide Subscriber Registration Database audit conducted by the NCC. This directive, issued in April 2021, aimed to ensure compliance with quality standards and SIM card registration requirements.
Analyzing the market share of active voice subscriptions in the GSM mobile segment for 2022, MTN, Glo, Airtel, and 9mobile emerged as the leading operators with shares of 40.06%, 27.13%, 27.03%, and 5.78% respectively.
Despite the decline in FDI in Nigeria’s telecommunications sector, the continuous growth in subscribers and contribution to the country’s GDP indicates significant potential for future investments and expansion.
The source of the article is from the blog scimag.news