The Business NG - August 28, 2024

In this issue

Nigeria's telecommunications sector, once a booming industry, has experienced a steady decline in Gross Domestic Product (GDP) growth rate over the past year. According to the National Bureau of Statistics (NBS), the sector's real GDP growth has dropped from 11.71% in Q1 2023 to 5.17% in Q2 2024. This significant decline is attributed to a challenging operating environment characterized by inflation and currency depreciation.

The forex debacle has taken a toll on telecom operators, with heavy losses reported due to the dwindling value of the Naira. For instance, MTN, with a subscriber base of 79.7 million as of December 2023, reported a first loss after tax of N137 billion since its 2019 listing on the Nigerian Stock Exchange in 2023. Airtel Africa, which had 50.9 million subscribers in Nigeria as of March 2024, reported a loss after tax of $89 million for its full year ended March 2024, primarily due to FX headwinds in Nigeria and Malawi.

Industry stakeholders have sounded the alarm, urging the government to address the perennial challenges in the telecom sector. "Telecommunications is the engine room of the digital economy. A steady decline in the GDP growth rate of the sector for more than a year is a clear indication that things are not going the right way," said Akin Naphtal, Founder/CEO of Africa Digital Economy Forum (ADEF).