Nigeria’s telecom sector attracts $392.9m in nine months, reversing 2024 slump

…Tariff reform, data demand drive investment rebound

Nigeria’s telecommunications sector pulled in $392.92 million in foreign direct investment between January and September 2025, reversing last year’s downturn and signalling a gradual return of offshore capital to one of the country’s most strategic industries.

Latest capital importation figures released by the National Bureau of Statistics show that the nine-month total comfortably surpassed the $319.72 million recorded in the corresponding period of 2024, a year marked by weakening investor appetite and macroeconomic strain.

The recovery was powered largely by a sharp upswing in the third quarter. Telecom inflows rose to $208.51 million in Q3 2025, compared with just $14.74 million in the same quarter a year earlier, more than a fourteenfold jump. The surge represents one of the clearest signs yet that foreign investors are reassessing the sector after a period of caution.

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From slump to rebound

The trajectory over the past two years underscores the turnaround.

In 2024, telecom capital importation began strongly at $191.57 million in the first quarter, then slipped to $113.42 million in Q2 before collapsing to $14.74 million in Q3 as exchange-rate volatility and broader economic headwinds weighed on sentiment.

By contrast, 2025 has shown steadier momentum. Inflows reached $80.78 million in Q1 and climbed to $103.63 million in Q2 before accelerating sharply in Q3. While the latest quarterly figure has not yet exceeded the early-2024 peak, it decisively reversed the slump recorded a year earlier.

The cumulative 23 percent year-on-year rise in nine-month inflows suggests more than a statistical bounce. Instead, it points to renewed conviction that telecoms remain central to Nigeria’s growth story, despite lingering structural challenges.

Tariff reset unlocks capital

A major catalyst has been policy adjustment within the industry.

On January 20, 2025, the Nigerian Communications Commission approved a 50 percent tariff adjustment for operators, citing rising operational costs and the need to safeguard service quality. It was the first significant pricing review in over a decade.

Operators and industry groups had long argued that static tariffs were unsustainable in the face of inflation, currency depreciation, soaring diesel prices and mounting infrastructure expenses. The reform, they said, would stabilise balance sheets and unlock fresh investment.

The Association of Telecommunications Companies of Nigeria maintained that improved revenue flows would be channelled into network upgrades, rural expansion and enhanced customer experience. Sector executives have since pointed to increased capital expenditure on fibre deployment, capacity upgrades and service optimisation.

For foreign investors, the tariff reset signalled regulatory responsiveness and a clearer pathway to returns in a capital-intensive industry.

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Data hunger reshapes outlook

Beyond regulation, surging demand for data services has strengthened the sector’s fundamentals. Mobile internet usage continues to expand as more Nigerians depend on digital platforms for payments, education, streaming and enterprise services.

The growth of fintech, e-commerce and cloud-based applications has also reinforced the case for deeper network investment. As traffic volumes climb, operators are under pressure to scale backbone infrastructure and extend 5G coverage — projects that require substantial and sustained capital.

Challenges persist

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 constraints such as high right-of-way charges, inadequate fibre rollout and persistent power shortages. Security concerns and import duties on equipment continue to add to operators’ cost burdens.

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 inflows alone.

Still, the nine-month figure of nearly $393 million provides a measure of reassurance that international capital has not abandoned the sector. Instead, investors appear to be 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 offers a telling signal. After last year’s slump, 2025’s rebound suggests that confidence, while fragile, is returning.

Royal Ibeh is a senior journalist with years of experience reporting on Nigeria’s technology and health sectors. She currently covers the Technology and Health beats for BusinessDay newspaper, where she writes in-depth stories on digital innovation, telecom infrastructure, healthcare systems, and public health policies.

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