The Global System for Mobile Communications Association (GSMA) has called on Nigeria’s federal government to reduce its burdensome telecom tax regime, warning that the current system is hindering much-needed investment in infrastructure and stalling the growth of the country’s digital economy.
Angela Wamola, Head of Sub-Saharan Africa at GSMA, outlined the challenges faced by telecom operators in a statement on Wednesday, citing rising operational costs, fluctuating energy prices, and difficulty accessing foreign currency for essential equipment as major concerns. However, Wamola stressed that Nigeria’s complex tax environment presented a unique barrier to the sector’s development.
“The telecom sector is critical to Nigeria’s economic development, but the heavy tax burden is limiting its ability to invest and expand,” Wamola noted, adding that the country’s telecommunications growth has slowed in recent years, with operators reporting financial losses.
In 2023, telecom companies in Nigeria contributed an estimated N2.4 trillion in taxes, according to a GSMA report obtained by The PUNCH. This figure underscores the sector’s significant role in the economy, with telecommunications generating roughly N33 trillion, or 13.5 per cent of Nigeria’s Gross Domestic Product (GDP) for the year.
Despite the sector’s potential, Wamola highlighted that operators are struggling with high costs, especially for right-of-way (RoW) charges—fees paid for the use of land to deploy infrastructure like fiber optics. Although a 2020 agreement among state governors set the RoW charge at 145 naira per meter, many states have disregarded this, leading to wildly varying fees, which now account for between 1 and 70 per cent of additional costs for installations, depending on the region.
“These inconsistencies create significant hurdles for telecom operators, making it difficult to deploy crucial infrastructure,” Wamola said. “If the agreed rate were applied consistently, the cost of fiber deployment could drop by 15 per cent, allowing operators to expand their networks more affordably.”
Wamola urged the government to simplify taxes, harmonise RoW charges, and reduce multiple levies to stimulate investment. She argued that by reforming the telecom tax structure, Nigeria could unlock the sector’s full potential, enhance digital inclusion, and drive broader economic growth.
