The Global System for Mobile Communications Association has called on the Federal Government to lower telecom taxes to stimulate investment and enhance Nigeria’s digital economy.
The Head of Sub-Saharan Africa at GSMA, Angela Wamola highlighted that Nigeria’s complex and burdensome tax regime is impeding the telecom sector’s capacity to invest in infrastructure, expand services, and contribute to economic growth, according to The Punch.
In a statement shared on Wednesday, Wamola noted that rising operational costs, exacerbated by increasing energy prices, have significantly strained telecom operators.
She also pointed out that difficulties in accessing foreign currency, crucial for importing essential equipment, are further complicating efforts 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 faced a slowdown in growth and reduced its contribution to the country’s GDP in recent years, largely due to substantial financial losses and declining performance among telecom operators
In 2023, telecommunications companies in Nigeria paid approximately N2.4 trillion in taxes, according to a digital economy report from the Global System for Mobile Communications Association.
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.
Despite its significant potential, the sector is burdened by high right-of-way (RoW) charges, which vary considerably from state to state, according to Wamola.
RoW charges are fees that telecom operators pay 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.
Wamola recommended that the government streamline taxes, harmonize right-of-way charges, and reduce multiple levies to attract investment and improve digital inclusion.
She argued that such reforms would not only benefit the telecom sector but also drive economic growth, enhance connectivity, and expand access to digital services for millions of Nigerians.
