Stakeholders in Nigeria’s telecommunications sector are expressing renewed optimism for increased investments, thanks to a noticeable stabilization in the foreign exchange (forex) market. This positive shift comes on the heels of a tumultuous 2024, where operators faced significant challenges due to extreme currency volatility.
Industry leaders believe that the worst is behind them. The naira, which experienced dramatic fluctuations last year, has recently stabilized at around N1,535 to N1,538 per dollar in the official market. In the parallel market, rates have also shown consistency, averaging between N1,650 and N1,655 to the dollar. This newfound stability is crucial for telecom companies that rely on predictable exchange rates for planning and operations.
Tony Emoekpere, President of the Association of Telecommunications Companies of Nigeria (ATCON), emphasized that it’s not just the exchange rate that matters but the overall stability of the forex environment.
“The main issue with forex has always been instability…Now that we have a clearer range for planning, we can attract more investments.” – Emoekpere
Karl Toriola, CEO of MTN Nigeria, echoed this sentiment, expressing confidence that 2025 will bring a more stable forex environment. Reflecting on last year’s challenges.
“I don’t expect a repeat of the volatility we experienced last year. As long as we maintain stability, we can adapt to gradual changes in currency value.”- Toriola
The turbulence of 2024 saw the dollar soar from about N460 in 2023 to over N1,600 at its peak. This dramatic rise disrupted telecom operators’ plans for importing equipment and made securing funding increasingly difficult. Gbolahan Awonuga from the Association of Licensed Telecommunications Operators of Nigeria (ALTON) highlighted how this instability hindered growth and profitability.
Engr. Ikechukwu Nnamani, CEO of Digital Reality, a leading data center company in Nigeria, illustrated the impact of forex fluctuations on business operations. He explained how changes in exchange rates can drastically alter pricing structures and profitability without any fault on the part of service providers.
Looking ahead, financial experts are cautiously optimistic about continued forex stability in 2025. Dr. Muda Yusuf from the Centre for the Promotion of Private Enterprises (CPPE) noted that regulatory reforms and interventions by the Central Bank of Nigeria (CBN) have contributed to this positive outlook. With foreign reserves now exceeding $40 billion and ongoing efforts to stabilize the naira, many believe that conditions are ripe for growth.
However, while telecom operators are hopeful for a stable environment, they are also pushing for a significant tariff increase up to 100%, to offset rising operational costs. The Nigerian Communications Commission (NCC) will need to consider this request carefully, especially given the economic pressures many consumers face.
