Foreign capital into telecom sector hits four-year low at $7.24 million despite tariff hike

Foreign capital into telecom sector hits four-year low at $7.24 million despite tariff hike

Foreign capital flowing into Nigeria’s telecommunications sector plunged to $7.24 million, a four-year low in the first quarter of 2026, despite the 50 per cent tariff increase approved for operators last year to support investment and network expansion.

The latest capital importation report released by the National Bureau of Statistics (NBS) shows the weakest quarterly inflow into the telecom sector since Q4 2021, when no capital importation was recorded, making it the lowest level in 17 quarters, or more than four years.

The weak showing also contrasts with expectations that the tariff adjustment approved by the Nigerian Communications Commission in January 2025 would improve the investment climate for operators struggling with rising energy, foreign exchange and infrastructure costs.

Data from the National Bureau of Statistics showed that capital importation into the telecom sector fell to just $7.24 million in Q1 2026, representing only 0.07% of the $10.37 billion total inflows recorded during the period.

The figure marks a 91.04% year-on-year decline from $80.78 million in Q1 2025 and a 92.99% drop from $103.36 million recorded in the preceding quarter.

The decline is particularly striking given the sector’s performance in recent years. Telecoms attracted $496.27 million in capital importation in 2025, $456.59 million in 2024, $134.75 million in 2023, and $456.83 million in 2022.

While telecoms recorded a sharp decline, overall capital importation into Nigeria surged during the quarter.

Nigeria attracted $10.37 billion in capital importation in the first quarter of 2026, marking an 83.8% increase compared to the $5.64 billion recorded in the corresponding period of 2025, as foreign investors ramped up purchases of money market instruments and bonds.

The data showed that capital inflows also rose by 61% quarter-on-quarter from $6.44 billion recorded in the fourth quarter of 2025.

In comparison, telecoms ranked among the weakest-performing sectors, attracting less foreign capital than trading, agriculture, IT services and shares.

Industry players had argued that higher tariffs would strengthen cash flows, support network upgrades and encourage fresh investment into the sector.

Following the approval of 50% tariff adjustment for telecom operators early last year, NCC said the operators had invested over $1 billion in infrastructure to boost network capacity.

The NCC also disclosed that telecommunications operators invested more than N2.5 trillion in network infrastructure in 2025 as the regulator moved to tackle worsening service quality complaints across the country.

However, the latest data suggests that foreign investors remained cautious despite the increase in telecom service charges.