The GSMA, a global mobile industry association, has released a report urging Nigeria to implement policy changes to attract Investment in its telecom sector. This investment is crucial to expanding Internet Access and growing the digital economy, as only 29% of Nigerians currently use mobile internet regularly. According to the GSMA, improved policies could lead to an additional 15 million Nigerians being online by 2028. But the telecom sector in Nigeria faces some challenges, including difficulties in deploying Infrastructure due to the complex and costly process of securing Rights of Way (RoW).
This process significantly increases the time and costs associated with rolling out infrastructure. Furthermore, the complex Tax environment in Nigeria poses a significant burden on the sector, resulting in high and increasing costs of tax compliance due to the overlapping tax structure within the country. Other costs, such as the cost of power for sites, are also rising, making it difficult for the industry to maintain sustainable levels of investment. This is primarily driven by increases in the price of fuel, government fees and levies, and demand for forex, which is increased by contractual obligations for network infrastructure and services denominated in USD.
Recommendations given by the report and MCC Initiative.
To address these challenges, the report recommends several initiatives to support policymakers in creating an economic and regulatory environment that supports growth, investment, and competition. These include implementing a legal framework for critical national infrastructure, simplifying and standardizing the process for issuing RoW, reducing the industry’s tax burden, and creating a regulatory environment that supports sustainable investment. Currently, Nigeria’s internet usage policy is governed by the Nigerian Communications Commission (NCC), which has implemented various initiatives to increase internet penetration.
However, more needs to be done to address the challenges facing the sector. The NCC has introduced policies such as the National Broadband Plan, which aims to increase broadband penetration to 70% by 2025. Additionally, the commission has implemented initiatives such as the Universal Service Provision Fund (USPF), which provides funding for infrastructure deployment in unserved and underserved areas. Despite these efforts, Nigeria’s internet usage policy still faces significant challenges. The country’s internet penetration rate remains low, and the cost of internet services is high compared to other countries.
Digital economy and literacy must be prioritized.
Also, the GSMA report recommends that policymakers implement policies that support the growth of the digital economy, such as reducing taxes and fees, simplifying the process for issuing RoW, and creating a regulatory environment that supports sustainable investment. The report recommends that policymakers prioritize the development of digital infrastructure, such as fiber optic cables and cell towers, to support the growth of the digital economy. This includes implementing policies that support the deployment of 5G technology, which has the potential to significantly increase internet speeds and reduce costs.
Furthermore, the report recommends that policymakers prioritize Digital Literacy and skills development, to ensure that Nigerians have the skills they need to fully participate in the digital economy. This includes implementing programs that provide training and Education in digital skills, such as coding and data analysis. Then, the report highlights the need for policymakers to address the issue of cybersecurity, which is a major concern for internet users in Nigeria. This includes implementing policies that protect internet users from cyber threats, such as hacking and online fraud.
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In all, boosting internet usage in Nigeria requires a comprehensive approach that addresses the challenges facing the telecom sector. This includes implementing policies that support the growth of the digital economy, prioritizing the development of digital infrastructure, promoting digital Literacy and skills development, and addressing cybersecurity concerns. By implementing these recommendations, Nigeria can create an environment that fosters investment and growth in the telecom sector, leading to increased internet access and a more robust digital economy.