Nigeria’s economic experts and stakeholders in the telecom industry have sounded the alarm, warning that the sector’s decline could have far-reaching consequences for the country’s economic growth and development.
At a breakfast session hosted by the Lagos Business School, Pan-Atlantic University on June 5, 2024, leading voices in the private sector gathered to discuss the theme “Telecom Sector: The Fulcrum for Economic Dynamism in Nigeria.” Keynote speaker Bismarck Rewane, CEO of Financial Derivatives Company, emphasized the telecom sector’s critical role in driving economic growth, innovation, and productivity across various industries.
Rewane, in his presentation titled, “Nigerian Economy on the Brink, Adapt or Collapse?” highlighted the sector’s challenges, including rising inflation, high operating costs, limited access to foreign exchange, regulatory burdens, multiple taxations, and state and local government extortion. He stressed that these challenges are threatening the sector’s growth and development, citing MTN’s reported loss in 2023 financial year.
The expert’s comments align with telecom operators’ push for cost-reflective tariffs, which they deem necessary due to adverse economic headwinds. Rewane emphasized that the current situation is having a detrimental impact on the sector’s growth and development, warning that the revenue potential from telecoms may start falling, leading to a ripple effect on other sectors.
“Big push theory posits that growth in one sector can stimulate growth in others through backward and forward linkages. The telecom sector has both forward and backward linkages to various sectors. This linkage to other sectors is vital for economic growth, innovation, and productivity across various industries making it a key enabler and driver of development in modern economies. If the telecom industry collapses, all other sectors will follow”, he added.
Other notable speakers, including Prof. Ali Bongo, echoed Rewane’s sentiments, stressing the need for government support and deregulation to ensure the sector’s survival. They highlighted the sector’s growth potential, citing its 8% outperformance of GDP growth rate between 2019 and 2023.
The event examined the telecom sector’s critical role in Nigeria’s economic growth and development, with stakeholders urging the government to provide support and create an enabling environment for the sector’s growth. As the sector continues to face numerous challenges, experts warn that its decline could have far-reaching consequences for Nigeria’s economic dynamism.
