Capital inflows rebound after 2024 slump, but volatility and broadband gaps highlight need for sustained funding…..
Foreign direct investment (FDI) into Nigeria’s telecommunications sector staged a dramatic comeback in the third quarter of 2025, according to fresh capital importation figures released by the National Bureau of Statistics (NBS).
The data shows that telecom inflows climbed to $208.51 million in Q3 2025, compared to just $14.74 million in the same period of 2024, a more than fourteenfold year-on-year surge. The rebound signals renewed foreign investor appetite after a sharp downturn a year earlier.
A Year of Swings
Despite the strong Q3 performance, investment patterns throughout 2025 have remained uneven, underscoring continued volatility in foreign funding.
Telecom inflows stood at $80.78 million in Q1 2025 and rose to $103.63 million in Q2 before accelerating significantly in Q3.
The trend contrasts sharply with 2024, when the year began strongly but lost momentum as it progressed. Capital importation into telecoms reached $191.57 million in Q1 2024, declined to $113.42 million in Q2, and then plunged to $14.74 million in Q3.
While the Q3 2025 recovery marks a decisive turnaround from that slump, inflows are still below the peak recorded in early 2024.
On a cumulative basis, the telecom sector attracted $392.92 million between January and September 2025, exceeding the $319.72 million recorded during the same period in 2024, a 23 percent increase year-on-year. The figures suggest that despite quarterly fluctuations, overall momentum improved in 2025.
Policy Shifts and Tariff Reforms
Industry observers attribute the rebound partly to regulatory and macroeconomic adjustments, including exchange rate reforms and stronger demand for data services.
Earlier this year, the Nigerian Communications Commission (NCC) approved a 50 percent tariff adjustment for telecom operators, citing rising operational costs and the need to safeguard industry sustainability.
The move followed sustained lobbying by operators who had argued that tariffs had remained unchanged for more than a decade despite mounting pressures from inflation, exchange rate volatility and escalating infrastructure costs.
According to the Association of Telecommunications Companies of Nigeria (ATCON), the tariff increase has enabled operators to channel additional revenue into network upgrades, expanded digital access and service quality improvements.
The association said the reinvestment drive is expected to deliver improved connectivity, broader coverage and innovative digital solutions tailored to Nigeria’s fast-evolving consumer base.
Infrastructure Gap Still Looms
The FDI rebound comes at a critical time for the sector. Nigeria missed its 70 percent broadband penetration target in December 2025, hindered by slow fibre rollout, high right-of-way charges, persistent power shortages and insufficient private capital.
Telecommunications infrastructure remains capital-intensive, requiring billions of dollars in sustained investment particularly for rural coverage, 5G expansion and backbone network development.
Operators continue to grapple with rising diesel costs, currency depreciation, security challenges and import duties on equipment all of which weigh heavily on margins.
While the Q3 surge offers a welcome boost, industry stakeholders caution that sustaining investor confidence will depend on regulatory stability, cost-reflective pricing and structural reforms that lower the cost of deploying infrastructure.
For now, the latest data suggests that foreign investors are once again willing to place bets on Nigeria’s digital future but whether that confidence translates into long-term capital commitments remains the bigger question.
