Business

Telecom Operators Urge FG To Cut Taxes To Boost Investments

Published

10 months ago

September 5, 2024

The Global System for Mobile Communications Association has urged the Federal Government to reduce telecom taxes to encourage investments and boost the country’s digital economy.

According to Angela Wamola, The Head of Sub-Saharan Africa at GSMA, Nigeria’s complex and burdensome tax regime is hindering the telecom sector’s ability to invest in infrastructure, expand services, and contribute to the country’s economic development.

The GSMA official said in a note shared with Newsmen on Wednesday that the rising operational costs, driven by increasing energy prices, have placed considerable strain on telecom operators.

Wamola explained that the situation was further exacerbated by the difficulty in accessing foreign currency, which is essential for importing the equipment needed to expand and maintain network infrastructure.

“These challenges are not unique to Nigeria; many African markets face similar issues. However, Nigeria’s complex and burdensome tax regime presents additional, country-specific obstacles that severely limit the sector’s potential,” the GSMA chief detailed.

Nigeria’s telecommunications sector has experienced a slowdown in growth and contribution to the country’s GDP in recent years. This decline is attributed to significant financial losses and deteriorating performance among telecom operators.

In 2023, telecommunications companies in Nigeria paid a total of approximately N2.4tn in taxes, a digital economy report from the Groupe Special Mobile Association showed.

This figure represents a significant contribution to the Nigerian economy, as the telecom sector generated around N33tn, accounting for 13.5 per cent of the country’s Gross Domestic Product (GDP) during the year.

Although the sector has enormous potential, according to Wamola, it is also pressed by the high cost of the right-of-way (RoW) charges, which vary drastically from state to state.

RoW charges are fees paid by telecom operators to landowners or authorities for the use of their land or property for infrastructure deployment.

The GSMA official lamented that despite a 2020 agreement among state governors to set the RoW charge at 145 naira per meter, many states have failed to comply with this rate.

According to her, this non-adherence has resulted in escalated costs for infrastructure deployment, with RoW charges now ranging from 1 per cent to 70 per cent of the additional costs of fiber optic installations, depending on the state.

The GSMA boss noted that this inconsistency not only hinders the deployment of vital infrastructure like fiber optics but also threatens the sector’s ability to finance necessary expansions.

However, if the agreed-upon rate of 145 naira per meter were uniformly applied, the GSMA official said that the cost of deploying fiber across the country could decrease by 15 per cent, making it more feasible for operators to invest in expanding their networks.

Wamola recommended that the government streamline taxes, harmonize right-of-way charges, and reduce multiple levies to encourage investment and enhance digital inclusion.

She argued that reforming telecom taxes would not only benefit the sector but also enhance economic growth, improve connectivity, and increase access to digital services for millions of Nigerians.

Business

Naira Depreciates Against Dollar

Published

1 week ago

July 4, 2025

Editor

The Naira experienced a slight depreciation on Friday at the official market, trading at N1,528.56 to the dollar.

Data obtained from the website of the Central Bank of Nigeria (CBN) showed that the Naira lost N2.73.

This represents a 0.17 percent loss compared to the N1,525.82 recorded on Thursday.

The Naira, which opened the week on Monday with a gain of N9.52 against the dollar, held steady gains until Thursday.

On Wednesday, the local currency gained N3.42 against the dollar and received commendation from the International Monetary Fund (IMF).

The IMF, in its 2025 Article IV Consultation report on Nigeria, commended the CBN for its reforms to the foreign exchange market, which supported price discovery and liquidity.

Business

JUST IN: Dangote Refinery Hikes Petrol Ex-depot Price

Published

3 weeks ago

June 20, 2025

Editor

Nigerians may soon pay more for petrol as the Dangote Petroleum Refinery on Friday increased its ex-depot price for Premium Motor Spirit to N880 per litre, raising fresh concerns over fuel affordability and price volatility in the downstream sector.

Checks on petroleumprice.ng, a platform tracking daily product prices, and a Pro Forma Invoice seen by The PUNCH confirmed the hike, representing a N55 increase from the previous rate of N825 per litre.

The increment would ripple across the entire fuel distribution chain, likely pushing pump prices above N900/litre in some parts of the country, especially in areas far from the distribution hubs.

The hike comes despite global crude prices falling. Brent crude dipped by 3.02% to $76.47, WTI fell to $74.93, and Murban dropped to $76.97 on Friday. The decline in benchmarks offers little relief due to persistent fears of sudden supply disruptions.

The refinery has increased its reliance on imported U.S. crude and operational costs amid exchange rate instability, which adds to its pricing pressure.

On Thursday, the President of the Dangote Group, Aliko Dangote, said his 650,000-barrel capacity refinery is “increasingly” relying on the United States for crude oil.

This came as findings showed that the Dangote Petroleum Refinery is projected to import a total of 17.65 million barrels of crude oil between April and July 2025, beginning with about 3.65 million barrels already delivered in the past two months, amid ongoing allocations under the Federal Government’s naira-for-crude policy.

Dangote informed the Technical Committee of the One-Stop Shop for the sale of crude and refined products in naira initiative that the refinery was still battling crude shortages, which had led it to resort to imports from the United States.

On Monday, the president of the Petroleum and Natural Gas Senior Staff Association of Nigeria, Festus Osifo, accused oil marketers of exploiting Nigerians through inflated petrol prices, insisting that the current pump price of PMS should range between N700 and N750 per litre.

He criticised the disparity between falling global crude oil prices and the stagnant retail price of petrol in Nigeria.

“If you go online and check the PLAT cost per cubic metre of PMS, convert that to litres and then to our Naira, you will see that with crude at around $60 per barrel, petrol should be retailing between N700 and N750 per litre.”

He asserted that if Nigerians bear the brunt of higher fuel costs, they should be allowed to enjoy the benefit of low pricing.

His forecast of increased costs now appears spot on, considering the latest developments.

Marketers are already adjusting. Depot owners and fuel distributors in Lagos and other cities anticipate a domino effect, with new price bands expected to follow Dangote’s lead.

Many had held back pricing decisions since Tuesday, when the refinery halted sales and withheld fresh PFIs. The delay fueled speculation, allowing opportunistic price hikes across various depots.

Business

Naira Appreciates At Official Market

Published

2 months ago

May 24, 2025

Editor

The Naira, which has seen steady appreciation against the Dollar all week, closed stronger on Friday, trading at ₦1,580.44 in the official forex market.

Data from the Central Bank of Nigeria’s website show the Naira gained ₦4.51k against the Dollar on Friday alone.

This marks a 0.28 per cent appreciation from Thursday’s closing rate of ₦1,584.95 in the official foreign exchange window.

The local currency maintained consistent strength throughout the week, recording gains daily.

On Monday, May 19, it traded at ₦1,598.68; on Tuesday, at ₦1,590.45; and on Wednesday, at ₦1,584.49.

These gains suggest increased investor confidence and improved forex supply, contributing to the naira’s performance.

Meanwhile, the CBN, at its 300th Monetary Policy Committee meeting held Monday and Tuesday, retained the Monetary Policy Rate at 27.5 per cent.