The President of the Trade Union Congress, Festus Osifo, has linked the recent 50% increase in telecom tariffs to the continuous depreciation of the Naira.

Speaking on Arise Television’s Prime Time, Osifo stated that the rising cost of foreign exchange is driving up the operational expenses of telecommunications companies, forcing them to adjust their tariffs.

Osifo recalled that the TUC had previously warned about the potential ripple effects of fluctuating FX rates on essential services in Nigeria.

He referenced Zimbabwe’s historical hyperinflation as a cautionary example, warning that unchecked currency devaluation could trigger severe economic distress.

“Sometime last year, we addressed a World Press Conference where we identified the root cause that would trigger a lot of increment in social services, and that was our FX—which is our exchange rate. When the Naira depreciates significantly, the cost of operations for businesses rises. To stay profitable, businesses have no choice but to adjust their revenue, and the easiest way to do that is by increasing the price of their goods and services,” he said.

The TUC president emphasized that rising operational costs for telecom companies, driven by forex fluctuations, are being passed on to consumers.

He explained that as the Naira weakens, expenses tied to foreign currencies, such as network equipment and software licenses, become more costly.

“The cost of their [telcos’] operations in Naira equivalent is going up. The reason that cost is going up is because they have to adjust revenue to remain profitable. If a company’s cost outweighs its revenue, it will operate at a loss. To avoid that, they increase prices, thereby transferring the financial burden to the consumers,” Osifo noted.

Osifo called on the federal government to take urgent action to stabilize the Naira and curb FX volatility’s impact on businesses and consumers.

He warned that if the trend persists, it will further drive up the cost of living and weaken Nigerians’ purchasing power.

“When our Naira was sliding down when it was being devalued, we argued that if you leave this unchecked, it’s going to trickle down to literally everything. Today, we are seeing that prediction come true, with telecom tariffs being the latest example,” he stated.

The telecom industry relies heavily on foreign components, including infrastructure, network equipment, and software, which are mostly priced in dollars.

This dependence on FX makes telecom operators highly vulnerable to exchange rate fluctuations, resulting in price hikes to sustain profitability.