Crippling Interest Rates and Unresolved MTRs Threaten Nigeria’s $1 Trillion GDP Ambition, Telecom Sector Warns
Nigeria’s vital telecommunications sector, a cornerstone of the nation’s digital economy, is facing an existential threat from a staggering 33 per cent interest rate regime, according to a stark warning from the Association of Telecommunications Companies of Nigeria (ATCON). The association has declared that without immediate regulatory intervention to establish cost-reflective Mobile Termination Rates (MTRs), the sector’s long-term sustainability, and consequently Nigeria’s ambitious target of achieving a $1 trillion Gross Domestic Product (GDP) by 2030, is in severe jeopardy.
In a critical presentation at the Nigerian Communications Commission (NCC) Stakeholders Consultation Meeting concerning the determination of MTRs, ATCON articulated the severe economic headwinds impacting operators. Chidi Ibisi, ATCON’s Coordinator of Telephone Operators, highlighted that beyond the crippling interest rates, operators are grappling with high foreign exchange rates, rampant inflation, and escalating costs for imported network equipment, diesel, and transportation. These factors are significantly inflating both capital and operating expenses, thereby impeding the substantial investments necessary to fuel the burgeoning digital economy.
ATCON underscored that despite these formidable challenges, telecom operators remain committed to investing over $1.38 billion in the current year alone. These planned investments are earmarked for crucial network capacity upgrades, resilience enhancements, coverage expansion, and quality of service improvements. However, the association stressed that such ambitious capital deployment is unsustainable without a pricing framework that accurately reflects the true cost of operations.
The association further detailed a litany of operational impediments, including the substantial costs associated with repairing fibre optic cables damaged by road construction and vandalism, the significant expense of replacing stolen generators, batteries, and essential base station equipment, and the burdensome Right-of-Way (RoW) charges and multiple taxation levied by various state governments. Citing Section 108 of the Nigeria Communications Act (NCA) 2003, ATCON reminded the NCC that tariff rates must be cost-oriented, fair, and crucially, structured to attract investment into the communications industry. “To ensure the sustainability of the Telecom Sector, which underpins every sector of the economy and propels Nigeria toward a $1 trillion economy, we need cost-reflective Mobile Termination Rates,” Ibisi asserted.
In a key recommendation designed to safeguard smaller market players, ATCON advocated for the retention of the current asymmetric MTR structure. This, they argue, is essential to guarantee the continued participation and sustainability of new entrants and smaller operators holding less than 10 per cent market share. The presentation coincides with significant sector achievements, including over 185.7 million mobile subscribers, 153.15 million internet subscribers, internet data usage exceeding 1.4 million terabytes, a teledensity of 85.67 per cent, and an 8.12 per cent contribution to GDP in Q4 2025, as per the National Bureau of Statistics. ATCON pledged its full cooperation with the NCC’s MTR determination study, emphasizing that the outcome must align with the stark economic realities confronting operators. “Failure to adopt cost-reflective rates will not only stifle investment but could reverse the monumental gains recorded in the sector over the last two decades,” Ibisi warned.
In a separate development, the Federal Government has categorically dismissed reports suggesting the introduction or consideration of new taxes on telecommunications services and petroleum products, purportedly in response to the International Monetary Fund’s (IMF) Article IV Consultation Report on Nigeria. The Ministry of Finance issued a statement clarifying that these reports misrepresented the IMF’s findings and do not reflect the government’s policy stance. The ministry explained that while the IMF’s Article IV Consultation Report offers an assessment of Nigeria’s economic outlook and provides policy recommendations for consideration, these recommendations are advisory and do not constitute binding government policy. Decisions regarding taxation, the ministry reiterated, are made through established constitutional and legislative processes, guided by national priorities and prevailing economic conditions. The government also confirmed that the Value Added Tax (VAT) waiver on petroleum products remains in effect and has not been withdrawn. Regarding concerns about a potential fuel surcharge, the ministry noted that while existing legislation permits such a levy, its implementation would necessitate a ministerial order and official publication in the Gazette.
