The Telecom Entrepreneurs Association has recently voiced major worries about the borrow-me-credit scheme that various telecom companies in Nigeria provide. This service, which provides credit advances for mobile phone users, is being examined for its possible monopolistic practices, Tax implications, and chances of violating regulatory standards. Representing long-standing Nigerian businesses in the airtime distribution sector has brought attention to critical concerns that may affect consumers and the national economy. They emphasise the need for transparency, compliance with regulations, and fair practices in telecom.
A key focus of their discussion is the ownership and functioning structure of companies that provide borrow-me-credit services. The organisation pointed out that these services have mostly excluded the nation’s Finance sectors, including banks and regional lending companies. This exclusion raised concerns regarding equity and market competition. Furthermore, exclusive agreements between two leading telecom companies and one particular service supplier have created a monopoly, hindering competition and possibly raising consumer expenses. A particularly contentious issue the association raises is the practice of dollar-denominated contracts for services delivered within the region.
Harmful effects of dollar-denominated contracts in the telecom industry.
This breaches the regulations The Central Bank of Nigeria (CBN) set forth, which mandates that domestic services must be priced in naira. Such practices could result in significant foreign exchange leakages and put undue pressure on the volatile Naira exchange rate. The possible consequences reach more than just economic stability; they threaten to increase expenses for ordinary individuals, putting additional pressure on family budgets while many already face financial difficulties. The Association of Telecom Entrepreneurs underscored the potential that dollar-denominated contracts might be a deliberate tactic to evade federal taxes.
If accurate, this scenario suggests that solid Revenue is being diverted from government resources, denying the country vital financial support. The organisation called for examining these practices to protect national interests and close any loopholes that could enable tax avoidance. An essential issue the association raises concerns the clarity of these services, especially regarding user fees. Many clients have surfaced with complaints indicating they face outrageous charges without adequate explanation. This lack of transparency contributes to a perception of exploitation and deepens the divide between service providers and their users.
Regulatory bodies were called to enforce best practices in the sector.
With two dominant telecom operators partnering exclusively with one service provider, limited competition exists to drive down prices or improve service quality. This monopolistic control could further solidify unfair pricing structures, disadvantaging millions of ordinary people who rely on these services for essential communication. The association’s appeal extends to key regulatory and investigative bodies, including the Nigerian Communications Commission (NCC), Economic and Financial Crimes Commission (EFCC), Federal Competition and Consumer Protection Commission (FCCPC), and Federal Inland Revenue Service (FIRS). These agencies have been called upon to assess the situation urgently and ensure that best practices are observed in the telecom sector.
Moreover, the goal is to cultivate a competitive and open market, protecting consumers while ensuring that the pricing of telecom services remains equitable. They emphasised the possible involvement of telecom companies if they persist in entering agreements that violate local laws by pricing services in foreign currencies. The group pointed out that these deals with international service providers not only bypass local financial norms but might also facilitate tax avoidance tactics. This jeopardises government income, leading to less funding for essential public services and Infrastructure improvements.
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Furthermore, telecom business leaders contend that the government is missing out on notable tax income because of the lack of clarity surrounding these agreements. They believe that immediate steps are necessary to eliminate such practices. Addressing these issues is vital for creating a fair market where no one organisation has an unfair edge. Increasing transparency and adhering to national laws will ultimately support the telecom sector, its users, and the economy. In closing, the organisation urged the different government entities to evaluate the borrow-me-credit program and resolve any associated issues thoroughly. An equitable and properly managed system enhances confidence, protects consumer rights, and contributes to economic stability.