Quick Read: Nigeria’s telecommunications sector is optimistic about heightened investments in 2025, thanks to the relative stability observed in the forex market by late 2024. While the declining value of the Naira created challenges, industry leaders believe the worst of forex volatility is over, allowing for improved financial planning and forecasting.
Nigeria’s telecommunications sector are optimistic about increased investments in 2025, driven by the relative stability observed in the forex market towards the end of 2024. Industry leaders believe the worst of the volatility in the foreign exchange market is behind them, paving the way for growth and development.
Challenges of Forex Instability
While the declining value of the Naira posed challenges, stakeholders emphasize that the high rate of instability in the forex market was the primary issue. This instability hindered planning for telecom operators, as fluctuating rates made financial forecasting difficult. By late 2024, the Nigerian Foreign Exchange Market (NFEM) saw the official exchange rate stabilize between N1,535 and N1,538 to a dollar, while the parallel market rate averaged N1,650 to N1,655, signaling a period of relative calm.
Industry Leaders Weigh In
The President of the Association of Telecommunications Companies of Nigeria (ATCON), Mr. Tony Emoekpere, highlighted the importance of forex stability over 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 stated.
Emoekpere believes that sustained stability, combined with effective policies to stabilize the naira, will foster growth in the telecom sector.
Similarly, the CEO of MTN Nigeria, Mr. Karl Toriola, expressed confidence in a more stable forex environment for 2025. Reflecting on 2024, he noted that the turbulence of last year is unlikely to recur, given the shift toward a more liberal forex market.
The Turbulence of 2024
Impact on Operations and Investments
The Head of Operations at the Association of Licensed Telecommunications Operators of Nigeria (ALTON), Mr. Gbolahan Awonuga, outlined the disruptions caused by the dollar’s significant rise from about N460 in 2023 to over N1,600 in 2024. This surge complicated the importation of equipment and limited operators’ ability to secure additional funding.
From a data center operator’s perspective, the CEO of Digital Reality, Engr. Ikechukwu Nnamani, described how forex instability affected pricing models and investment plans.
“If you come to Nigeria and use an exchange rate of N1,500/$1 to benchmark your charges, but the Naira later depreciates to N2,000, your revenue in dollar terms reduces drastically, disrupting your business case,” Nnamani explained.
Positive Economic Indicators
Financial experts share the optimism of telecom industry leaders, citing improved economic conditions. The Centre for the Promotion of Private Enterprises (CPPE) reported that regulatory reforms and periodic Central Bank of Nigeria (CBN) interventions stabilized the exchange rate between July and December 2024.
Dr. Muda Yusuf, CPPE’s founder, projected a stable forex environment in 2025, supported by over $40 billion in foreign reserves and improved inflows from diaspora remittances. Additionally, the $2 billion Eurobond proceeds and enhanced CBN capacity to moderate rate volatility are expected to strengthen the market.
A Promising Outlook
With a stable forex environment and continued regulatory reforms, Nigeria’s telecommunications sector is poised for significant growth in 2025. Industry leaders and financial experts alike anticipate a year of increased investments and economic progress.
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