Stakeholders in Nigeria’s telecommunications sector are optimistic about the potential for increased investments in 2025, following the relative stability observed in the forex market toward the end of 2024. Industry leaders believe that the worst of the volatility that plagued the market last year is over, and a more stable exchange rate will create a conducive environment for growth.
The primary issue, according to telecom operators, was not the value of the Naira itself but the instability of the forex market, which made it difficult for companies to plan effectively. Towards the end of 2024, the official exchange rate ranged between N1,535 and N1,538 to the dollar, while the parallel market rate stabilized between N1,650 and N1,655, providing a sense of predictability.
Tony Emoekpere, President of the Association of Telecommunications Companies of Nigeria (ATCON), emphasized that the key challenge for the industry was the volatility, not the exchange rate itself. He expressed optimism for 2025, noting that the recent stability would allow companies to plan more effectively and attract more investments.
He also pointed out that sustained stability, coupled with effective policies to stabilize the Naira, could lead to growth for the telecom sector.
MTN Nigeria’s CEO, Karl Toriola, echoed Emoekpere’s sentiments, predicting a more stable forex environment in 2025 and expressing confidence that the sector can adapt to a gradually declining currency as long as stability is maintained.2024 was a turbulent year for the sector, with the Naira’s sharp decline from N460 in 2023 to over N1,600 to the dollar disrupting telecom operators’ plans, especially for equipment imports. Gbolahan Awonuga, Head of Operations at the Association of Licensed Telecommunications Operators of Nigeria (ALTON), noted that this instability also made it difficult for operators to obtain funding and generate returns.
From a data center perspective, Engr. Ikechukwu Nnamani, CEO of Digital Reality, explained how the Naira’s depreciation created challenges for businesses that relied on USD benchmarks for their services, leading to a reduction in the value of their offerings in dollar terms.Experts predict that the forex stability seen in the latter half of 2024 will continue into 2025, supported by several key factors. Dr. Muda Yusuf, founder of the Centre for the Promotion of Private Enterprises (CPPE), highlighted the positive outlook for the exchange rate, citing improvements in foreign reserves, the CBN’s capacity to manage volatility, and favorable developments such as the successful Euro Bond issuance.
Yusuf also pointed out that Nigeria’s ongoing refinery projects, including those by Dangote and Port Harcourt, will reduce demand pressure on foreign exchange by supporting local production of refined products.While forex stability is seen as a positive development, telecom operators are also anticipating a tariff adjustment by the Nigerian Communications Commission (NCC). To offset rising operational costs, they have proposed a 100% increase in charges for data and voice services. However, it remains uncertain whether the NCC will approve this adjustment, given the economic challenges and the strain on Nigerians’ purchasing power.As forex stability offers hope for the telecom sector’s growth, operators are preparing for a more predictable environment, with the expectation that regulatory changes, including tariff adjustments, may also play a role in shaping the industry’s future.