Home » Foreign investment in telecom sector slows by 83.19% in Q2 2023 to $25.81bn – NBS

Foreign investment in telecom sector slows by 83.19% in Q2 2023 to $25.81bn – NBS

by Daudu John


Foreign investment in telecom sector slows by 83.19% in Q2 2023 to $25.81bn – NBS


The Nigeria Bureau of Statistics capital importation data showed that the telecoms sector attracted investments worth $25.81 million in Q2 2023 compared to $153.50 million in Q2 2022, representing a significant decline of 83.19 percent year-on-year.


According to the NBS, quarter on quarter, foreign capital inflow into the telecoms sector increased by 17 percent in Q2 2023 when compared with the $22.05 million investments recorded by the sector in Q1 2023.


The data also revealed that the telecoms sector accounted for 2.51 percent of the total capital inflow into the economy in Q2.


Analysis of the data shows that there was a decline in Nigeria’s total capital importation in Q2 2023 to $1.03 billion, lower than $1.5 billion recorded in Q2 2022, indicating a decrease of 32.9 percent y/y. Quarter-on-quarter, capital importation declined by 9.04 percent from $1.13 billion in Q1 2023.


The telecommunications sector has also been affected by the issues that the country’s economy is currently facing, as seen by dwindling industry numbers.


In Q2 2023, the sector growth rate declined to 9.74 percent from the 11.71 percent recorded in Q1 2023, while contributing 16.06 percent to the aggregate Real GDP.


According to the Nigerian Communications Commission teledensity, the number of active telephone connections per 1,000 inhabitants living within an area, declined to 115.63 percent in August 2023 from 115.70 percent in July 2023.


Broadband penetration also declined to 45.57 percent from 47.01 percent, while mobile subscriptions declined to 220.72 million from 220.86 million.


Analysts say players in the sector are currently facing several issues, one of which is the issue of multiple taxation, a key factor deterring investments in the sector.


Recently, the chairman of the Association of Licensed Telecommunications Operators of Nigeria, Gbenga Adebayo, disclosed that telecom operators are currently paying a total of 39 taxes and levies as governments at different levels in the country continue to introduce various charges.


“We also note that exchange rate instability, scarcity of forex, and high levels of inflation are other factors currently discouraging investments into the sector,” Adebayo said.


Investors lose N64.12bn as NGX ASI declines by 0.17%


Meanwhile, the bears dominated the local bourse, the Nigerian Exchange Limited on Tuesday with the market loss of 116.71 basis points.


At the close of trading the NGX All-Share Index settled at 66,984.62 points translating to a 0.17 percent decline when compared to the previous session’s closing figure of 67,101.33 basis points.


In Naira terms, the NGX Market Capitalisation recorded a loss of N64.12bn to settle at N36.80 trillion thereby dragging down year-to-date return to 30.70 percent.


The weak performance of the market was primarily driven by selloff in Tier-1 Banking stocks of ZENITHBANK, GTCO, ACCESSCORP which shed 0.47 percent, 0.70 percent and 1.25 percent respectively.


Detailed trading analysis shows that the total volume of stock traded declined by 4.18 percent to close at 257.42 million units, while the total trades for the day plummeted by 5.89 percent to 6,498 deals valued at N7.80 billion.


The shares of FIDELITYB recorded the highest volume of trade with 53.40 million stocks exchanged, while SEPLAT was the most traded stock by value worth N3.85 billion traded.


Notably, several stocks such as JOHNHOLT, PRESCO, DAARCOMM, DEAP CAP and JAIZBANK recorded loss of 10.00 percent, 9.54 percent, 8.70 percent, 7.41 percent and 6.25 percent respectively to topped other 27 losers of the day while MCNICHOLS topped the gainers list while the share prices of 77 others stocks remain unchanged.

The Industrial Goods and Oil/Gas sectors closed flat, while the Banking, Insurance and Consumer Goods sectors closed southward by 1.11 percent, 0.71 percent and 0.11 percent respectively.


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