The Federal Government has justified its approval of a 50% increase in telecommunications tariffs, stating that the move is necessary to protect jobs and prevent multinational telecom companies from exiting the country. The Minister of Communications and Digital Economy, Dr. Bosun Tijani, made this clarification on Thursday after leading Airtel Nigeria’s management to a meeting with President Bola Tinubu at the Presidential Villa in Abuja.
Why the Tariff Hike?
Dr. Tijani explained that the decision to approve the tariff increase was driven by the need to ensure the sustainability of foreign investments in Nigeria’s telecom sector, which is grappling with rising operational costs and inflationary pressures.
“If we chose not to allow the increase in tariffs, we would be at risk of losing jobs, as some of these companies could shut down, and when you weigh that, it’s also not the best outcome for the economy,” the minister said.
He emphasized that the telecom sector, including its value chain, employs nearly half a million Nigerians, making it a critical contributor to the nation’s economy.
A Thorough Evaluation Process
The minister revealed that the request for a tariff hike had been pending before the current administration took office. However, President Tinubu insisted on a comprehensive evaluation before granting approval.
“This is a government that is extremely conscious of the state of the economy, and Mr. President consistently takes into consideration each and every citizen before making decisions. Some of these decisions are difficult, but we have to balance the interests of individuals and businesses alike,” Tijani stated.
To determine the optimal rate for the adjustment, the government commissioned a study led by KPMG, which provided insights into the most sustainable tariff increase.
Focus on Quality and Accessibility
Dr. Tijani stressed that the government’s focus extends beyond affordability to ensuring “meaningful access” to telecommunications services. This includes not only providing connectivity but also guaranteeing high-quality service delivery.
“The NCC has been working to shift the focus not just to quality of service but to quality of experience. Now that the MNOs (Mobile Network Operators) have the opportunity to increase tariffs, they must ensure that quality remains a priority,” he said.
Investing in Infrastructure
To support its objectives, the government is investing heavily in telecom infrastructure. Tijani highlighted ongoing projects, including the expansion of Nigeria’s fibre-optic network by 90,000 kilometres and the recent approval for the construction of 7,000 additional telecom towers in rural areas.
“This collaborative approach aims to bridge connectivity gaps and improve service quality nationwide,” he added.
Labour Unions Push Back
The tariff hike has faced criticism from labour unions, including the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC). They accused the government of failing to conduct adequate consultations before approving the increase and threatened to mobilise their members to boycott telecom services unless the decision is reversed.
Some stakeholders have also warned that the tariff hike could exacerbate Nigeria’s already high inflation rate, further burdening citizens.
Key Takeaways
The Nigerian government has approved a 50% increase in telecom tariffs to protect jobs and prevent multinational companies from leaving the country.
The telecom sector employs nearly 500,000 Nigerians and is a key contributor to the economy.
President Tinubu insisted on a thorough evaluation before approving the tariff hike, which was informed by a KPMG study.
The government is investing in infrastructure to improve connectivity and service quality.
Labour unions have criticized the hike, threatening a boycott unless the decision is reversed.
