Nigeria targets 100% increase in revenue from telecom industry

The federal government has said it hopes to increase its revenue coming from the telecommunications industry by 100% between now and 2027.

This is contained in the Blueprint released by the Minister of Communications and Digital Economy, Dr. Bosun Tijani.

Revenue for the government from the telecom industry includes Company Income Tax (CIT) paid by the operators and VAT from their services.

The government has also been making money from the sales of spectrum to the telecom operators. Last year, for instance, the Nigerian Communications Commission (NCC) remitted N189 billion to the government as revenue from spectrum sales.

How the revenue increase will be achieved

Tijani in the Blueprint said the Ministry would overhaul the National Policy on Telecommunications, which was last revised in 2000, to account for changes in technology, standards, and markets, and define the trajectory of the next phase of one of Nigeria’s fastest-growing sectors.

 “As telecommunications continues to evolve in line with new technology and associated opportunities, it is critical to revamp our national approach to account for changing imperatives and to situate broadband development at the core of our national policy for the next 20 years. Core issues such as spectrum management, convergence, universal access, broadband penetration, net neutrality, and Quality of Service (QoS) have morphed significantly from when the last policy was issued. 

“Similarly, the drive towards a digital economy requires deepening of access to telephony and broadband services for the underserved and unserved. The Ministry will drive the review of the Telecoms Policy to account for these core issues,” he said.

In that regard, the Minister said the Ministry has set a target of increasing investment into Nigeria’s telecommunications sector by 15% year-on-year.

Part of the targets also include reducing the gap of unconnected Nigerians in rural areas from 61% to less than 20% by 2027.

Contribution to GDP

He added that the Ministry is also hoping to achieve a 50% improvement in Quality of Service (QoS) by the end of 2024.

According to him, the Ministry has also set a target to increase the net GDP contribution of the telecommunications sector to 22% of GDP by the end of 2027.

According to the data from the National Bureau of Statistics (NBS), while the ICT sector recorded a growth rate of 11.64% in real terms year on year in Q2 2023, the growth was driven largely by activities in the telecommunications sub-sector, which contributed 16.06% to the GDP in the real term.

The telecom industry, which is dominated by mobile network operators including MTN, Globacom, Airtel, and 9mobile, and Internet Service Providers (ISPs) is also driving a lot of activities in every other sector of the economy.

Source: Norvanreports