GSMA Gives FG Condition To Boost Investments

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

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

Rising operational costs, driven by increasing energy prices, have placed considerable strain on telecom operators, further exacerbated by difficulty in accessing foreign currency for importing equipment.

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

In 2023, telecommunications companies in Nigeria paid approximately N2.4 trillion in taxes, representing a significant contribution to the economy, with the sector generating around N33 trillion, accounting for 13.5% of GDP.

High right-of-way charges, varying drastically from state to state, press the sector, with RoW charges now ranging from 1% to 70% of additional costs of fiber optic installations, depending on the state.

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The GSMA recommends streamlining taxes, harmonizing right-of-way charges, and reducing multiple levies to encourage investment and enhance digital inclusion.

Reforming telecom taxes would benefit the sector, enhance economic growth, improve connectivity, and increase access to digital services for millions of Nigerians, according to Wamola.