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Nigerian states are competing for telecom investment


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Nigerian states are competing for telecom investment

Kaduna State is the latest Nigerian state to adopt the Federal Government’s proposed policy strategy aimed at deepening national broadband coverage presently pegged at a low 40%.

What’s happening: Kaduna State government has announced a complete waiver of Right of Way [RoW] charges for telecommunications companies. It is an upgrade on the FG-recommended 145 naira per meter.

Why it matters: RoW charge is a pain point for telecom operators and a barrier for investment in many states across the country. We previously highlighted the issues in this report.

  • States like Osun charge telecom companies as high as 5,600 naira for every meter of utilized site within its domain. Considering that they need thousands of kilometers to lay broadband cables and other infrastructure, this is bad news for the companies.
  • The move by Kaduna State Government is an important signal to the industry that it is ready for investment.
  • Similar action from Ekiti state – though RoW charge in the state was placed at the recommended 145 naira per meter – is already reportedly bearing good fruits.

Of note: Kaduna State is the fourth state after Ekiti, Imo, and Katsina to slash its RoW charge in line with the recommendation of the Federal Government within days.

  • This shows a shift of focus from the previous insistence on restrictive charges as a means to earn quick revenue to a broader view of the benefits of attracting investments and the impact of an expansive broadband coverage on the standard of living.

READ: States are ignoring FG’s telecom RoW policy. That’s bad news

What they are saying: Dr. Isa Pantami, Nigeria’s Minister of Communications and Digital Economy, has praised the move.

He said: “The actions of the Governors are truly commendable.  They also align with the resolution of the State Governors under the auspices of the Governors’ Forum on the 22nd of January 2020 to address the lingering issue of Right of Way (RoW) charges in a bid to deepen broadband penetration in the country and promote a Digital Economy for a Digital Nigeria.”

Bottom line: There is a sense of competition amongst the states for telecoms investment. This could be driven by the need to grow local IGR in the face of declining federal allocations following the devastating economic consequences of COVID-19. It is refreshing to see Nigerian states compete on positive economic grounds like this, unlike the familiar political squabbles.

Peter Adeshina is a journalist who reports politics, policy and governance.

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