Foreign direct investment (FDI) in Nigeria’s telecom sector has slumped to its lowest in over a decade, but industry leaders expect inflows to rebound from late 2025 into 2026 as currency stability and tariff hikes restore investor confidence.
Telecoms attracted just $80.78 million in FDI in the first quarter of 2025, a 57.8% drop from $191.57 million a year earlier, according to the National Bureau of Statistics. That’s a steep fall from the $994.33 million peak recorded in 2014. Although inflows briefly rebounded to $944.05 million in 2019, they haven’t crossed the $500 million mark since.
Industry players blame this decline on years of price controls that ignored market realities and the country’s volatile foreign exchange regime.
“Investments will not continue to come. No one will put in a dollar and continue to get 66 cents… We are in a big crisis,” said Karl Toriola, CEO of MTN Nigeria, at the Financial Derivatives Company Telecoms Industry 2.0: The Next Investment Frontier in Nigeria in 2024.
Before 2023, Nigeria operated a pegged exchange rate system. A collapse in oil earnings, especially in 2020, forced businesses to source dollars from the parallel market at steep premiums, creating spreads as wide as 40% between official and black market rates.
The Central Bank of Nigeria eventually abolished the peg in June 2023, but the move triggered a steep naira slide, from ₦471/$ before stabilising at around ₦1,500/$ in 2025 — ₦1,536/$ as of August 26, 2025.
The initial volatility reduced investors’ appetite, according to Gbenga Adebayo, chairman of the Association of Licensed Telecom Operators of Nigeria (ALTON).
“While we trade in naira, a lot of our inputs are foreign exchange dependent — equipment, hardware, software, bandwidth, satellites. They are all dollar-denominated,” he said.
However, a combination of factors, including the stability of the naira and the approval of a 50% hike in telecom tariffs, is turning the tide.
“Investors plan based on forecasts. Decisions for 2025 were made last year when the industry was struggling,” Adebayo said. “We expect the second half of this year and early 2026 to show improvements, barring any shocks.”
He noted that since most investors in the space are deep-pocketed with patient capital, certainty plays a big role in their decisions.
“The market leaders of today are those who invested at the right time in the years past. Yes. They are the market leaders of today,” he said.
However, telecom operators are not waiting for foreign capital as they are deploying $1 billion in their businesses in 2025. This signals a rebound, and according to Adebayo, “the industry is now back on the path of sustainability.”
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