By Laju Iren

PRESIDENT, Association of Telecommunications Companies of Nigeria, Mr. Olusola Teniola has said that Nigeria’s poor economic situation has had a negative impact on Foreign Direct Investment in Information and Communication Technology, ICT.

“Despite having reached $68 billion, it is sad that there was a lull in telecoms investment and general infrastructure expansion  last year, which also extended into the new year,” he said in a release to Vanguard Hi-Tech.

“The reason is simple: The US Dollar to Naira uncertainty has led to anxiety within the investment community and this has also meant that FDI needed to fund network expansion and capacity upgrades under our members capital expenditure  programmes as have had to be put on ‘hold’.

We need government to see that an enabling environment with clarity in policy formulation and execution that leads to transparency will encourage investors both domestic and foreign to bring funds to drive this expansion. Government needs to remove the  fear, uncertainty and doubt that is prevailing in the economy in 2017 or there will be further contraction in the economy irrespective of crude oil prices on the global market.”

Olusola Teniola

Teniola opined that the Federal Government allow telecommunication equipment to be on the preferred list of items that can access cheaper USD to the Naira, it is hard to see where the further growth will come from in 2017.

Capacity upgrades

“Without expansion of networks or increase in capacity upgrades, the networks will not be able to sustain Quality of Service  and revenue will stagnate or decline. Again, government needs to show strong leadership on this critical issue,” he said.

Continuing, Teniola called on the Federal Government to realize  that “ICT is a sector that is critical to the diversification of the economy. ICT recorded almost 9.9 per cent to gross domestic product (GDP) in 2016 despite all the headwinds and against a slow-down in the overall economy.”

Also speaking on the communication service tax bill, the ATCON boss said: “ATCON, Association of Licensed Telecoms Operators of Nigeria (ALTON), Alliance for Affordable Internet (A4AI) and National Association of Telecoms Subscribers (NATCOMS), strenuously stand against any attempt by government to destroy the growth of this industry by creating an additional tax to the already 26 taxes/levies that are imposed on the ICT industry.

ATCON has provided alternatives for the government to consider, such as increase in value added tax (VAT) across the board (not just applied to this sector) at no more than one per cent alongside incentives that will encourage further much needed investments in addressing quality of service (QoS), broadband roll-out and sustaining job creation. Any excessive tax will stall and/or stifle further growth in the ICT sector.

The ATCON boss also added that the country’s plan to achieve 30 percent broadband penetration by 2018 is possible with the right policies and an enabling environment.