In 2022, the telecommunications sector attracted $456.82 million in foreign investments, a significant increase of 325.12% compared to the previous year’s figure of $107.46 million.
This rise is due to the increased rollout of 5G and expansion of 4G networks across the country, which has made the sector more attractive to foreign investors.
Despite the challenging economic environment in the country, the telecoms sector has continued to retain its appeal to foreign investors. The capital importation data from the National Bureau of Statistics shows that the sector has remained one of the most attractive sectors for foreign investments.
However, the total foreign investments into the country decreased by 20.47% or $1.37 billion from $6.7 billion in 2021 to $5.33 billion in 2022. This decline was not enough to dampen the attractiveness of the telecoms sector to foreign investors.
In the fourth quarter of 2022, the production sector recorded the highest inflow of capital importation, with $392.54 million representing 37.01% of the total capital imported. The banking sector followed with $255.45 million (24.08%), while the telecoms sector received $168.27 million (15.86%) in capital importation.
The COVID-19 pandemic has further increased the reliance of almost every sector on the country’s communication backbone. As a result, the telecoms sector has seen increased network roll-out to expand coverage.
According to the Nigerian Communications Commission, teledensity has grown from 97.45% in January 2020 to 119.01% in February 2023.
Broadband penetration has also increased from 38.49% to 48.49%, while mobile Internet subscriptions grew from 128.37 million to 156.42 million and mobile subscriptions from 185.74 million to 226.84 million.
To accommodate the growth and expansion of 5G and 4G networks, MTN Nigeria and Airtel Africa invested N613.13 billion in 2022.
This investment represents a 14.19% increase from the N536.91 billion spent in 2021. MTN Nigeria deployed 9,027 4G sites, 588 5G sites, and 778 rural sites, with 4G accounting for approximately 76% of the total sites deployed during the year.
The adoption of digital products and the return on investment are also driving the growth of the telecoms sector. With the continued shift to digital technologies and a digital economy, it is expected that 5G will dominate and further increase foreign investments in the sector.
The global body for telcos, GSMA, has recently stated that the 5G rollout in ten top cities in the country will cost telcos $500 million as they will need to build 6,000 base stations.
