January 7, 2025
Stakeholders in Nigeria’s telecommunications sector are optimistic of a boost in investments in the sector in 2025 based on the relative stability in the forex market towards the end of 2024.
According to report on nairametrics, while stability is expected to continue this year, the industry leaders are confident that the foreign exchange market has overcome the volatility witnessed in 2024
In their views, the declining value of the Naira was not the main problem but the inability to effectively plan for many of the telecom operators due to high rate of instability in the forex market.
Towards the end of 2024, the official exchange rate at the Nigerian Foreign Exchange Market, hovered between N1,535 and N1538 to a dollar while on the parallel market, the exchange rate was traded unofficially, between N1,650 and N1,655 to the dollar, showing stability.
Expressing optimism for 2025, the President of the Association of Telecommunications Companies of Nigeria (ATCON), Mr. Tony Emoekpere, said forex stability has a greater impact on the industry than the exchange rate itself.
“The main issue with the forex is the instability. In the last few months, we have seen some stability. Now that we have a kind of range—almost like a top and bottom ceiling—I think it’s enough for any organization to plan and help us to attract more investments,” he said.
Emoekpere highlighted that sustained stability, combined with effective implementation of policies to stabilize the naira, could signal growth for the telecom sector.
“If we continue to see the kind of stability we saw towards the end of last year, it will be a good pointer for investors to come in,” he added.
Similarly, the CEO of MTN Nigeria, Mr. Karl Toriola, echoed same sentiments, predicting a more stable foreign exchange environment in 2025.
Reflecting on the challenges of 2024, Toriola said the worst of the volatility may have been over in 2024 .
READ MORE; Telcos Seek NCC Nod For A Proposed 100% Tariff Hike.
“I don’t expect any repeat of the kind of volatility we experienced last year, which was driven by the move towards a more liberal foreign exchange market,” he stated.
Toriola believes that the sector can adapt to a gradually declining currency as long as stability is maintained.
“We don’t need a reversal. We just need a relatively stable currency. We can manage that and find other ways and sources of efficiency,” Toriola added.
For the Head of Operations at the Association of Licensed Telecommunications Operators of Nigeria (ALTON), Mr. Gbolahan Awonuga, the significant rise of the dollar from about N460 in 2023 to over N1,600 in 2024 disrupted the operators’ plans for importing equipment.
He said this also made it difficult for telecom operators to obtain additional funding, as they struggled to generate returns amid the worsening exchange rate instability.
While the anticipated forex stability may bring a reprieve for the telecom operators, they are also expecting the Nigerian Communications Commission (NCC) to implement a tariff adjustment that would see them increase their charges for data and voice services.
The telecom operators has proposed a 100% increment to the regulator to offset the rising operational costs.
