…Tariff reforms, data demand boost investment
Nigeria's telecommunications sector drew $392.92 million in foreign direct investment between January and September 2025, reversing last year's slump and signaling a gradual return of offshore capital into one of the country's most strategic industries.
The latest capital import figures released by the National Bureau of Statistics show that the nine-month total easily surpassed the $319.72 million recorded in the same period of 2024, a year marked by weak investor appetite and macroeconomic stress.
The improvement was mainly driven by a sharp rebound in the third quarter. Telecom flows increased to $208.51 million in the third quarter of 2025, compared to only $14.74 million in the same quarter a year ago, more than fourteen times. The surge represents one of the clearest signs yet that foreign investors are reevaluating the sector after a period of caution.
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from recession to rebound
The trajectory of the last two years underlines the change.
In 2024, telecom capital imports started strongly at $191.57 million in the first quarter, then dropped to $113.42 million in the second quarter, before falling to $14.74 million in the third quarter as exchange rate volatility and macroeconomic headwinds weighed on sentiment.
In contrast, 2025 has shown steady progress. Inflows reached $80.78 million in the first quarter and reached $103.63 million in the second quarter before increasing rapidly in the third quarter. While the latest quarterly figure still did not surpass the peak of early 2024, it decisively reversed the slowdown recorded a year ago.
The cumulative 23 percent year-on-year increase in nine-month flows indicates more than a statistical bounce. Instead, it points to new confidence that despite lingering structural challenges, telecommunications remains central to Nigeria's growth story.
Tariff reset opens up capital
A major catalyst has been policy adjustments within the industry.
On January 20, 2025, the Nigerian Communications Commission approved a 50 percent tariff adjustment for operators citing rising operating costs and the need to protect quality of service. It was the first significant pricing review in more than a decade.
Operators and industry groups had long argued that fixed tariffs were unsustainable in the face of inflation, currency depreciation, rising diesel prices and rising infrastructure spending. He said the reforms will stabilize the balance sheet and open doors for new investments.
The Association of Telecommunications Companies of Nigeria said the improved revenue flow would be leveraged into network upgrades, rural expansion and improved customer experience. Sector officials have since pointed to increased capital expenditure on fiber deployment, capacity upgrades and service optimization.
For foreign investors, the tariff reset signaled regulatory accountability and a clear path to returns in a capital-intensive industry.
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Data hunger reshapes attitudes
Beyond regulation, growing demand for data services has strengthened the fundamentals of the sector. Mobile internet usage continues to grow as more Nigerians rely on digital platforms for payments, education, streaming and enterprise services.
The growth of fintech, e-commerce and cloud-based applications has also strengthened the case for deep network investment. As traffic volumes grow, operators are under pressure to ramp up infrastructure and expand 5G coverage – projects that require substantial and ongoing capital.
Challenges remain
Despite the rebound, volatility remains a defining feature of telecom investment flows.
Nigeria fell short of its 70 percent broadband penetration target at the end of 2025, reflecting barriers such as high right-of-way fees, inadequate fiber rollout and persistent power shortages. Operators' cost burden continues to rise due to security concerns and import duties on equipment.
Industry stakeholders warn that achieving nationwide high-speed connectivity will require billions of dollars in long-term funding. Rural coverage, backbone expansion and advanced network deployment cannot be financed through short-term flows alone.
Nevertheless, the nine-month figure of approximately $393 million provides reassurance that international capital has not abandoned the region. Instead, investors are recalibrating, responding to reforms, tracking demand growth and weighing Nigeria's digital potential against its structural risks.
For an economy seeking diversification through technology and services, the direction of telecom investment provides a clear signal. After last year's downturn, the return to 2025 suggests that confidence, though fragile, is returning.
