Broadcasting
Creating Conditions for Sustainable and Inclusive Growth in Nigeria’s Digital Economy – An Urgent Call for Action
By Engr. Gbenga Adebayo
The renewed Hope Agenda clearly recognizes the power of technology and innovation to enable inclusive economic growth and development. It is an important acknowledgement that if we can create the conditions within which innovation can thrive, we can maintain, or even accelerate the already rapid growth in the digital economy.
Since the liberalisation of the telecoms sector in the early 2000s, the ICT sector’s contribution to GDP in Nigeria has grown progressively. Today, it delivers 17.89% of annual GDP. That is more than double the contribution of oil and gas. From the initial development of connectivity infrastructure and services, the sector has catalysed the emergence of innovative technology businesses across a range of sectors. From financial technology, to data, logistics, transportation, healthcare and education.
It also provides the infrastructure that enables the delivery of critical national development projects, from national identity enrollment and management, to elections and financial inclusion programmes that provide access to vital services for marginalised and vulnerable communities.
While this growth is impressive and the impact on socio-economic development so far has been clear, the journey is far from over. The recognition within the renewed hope agenda is that the sector has the potential to drive a new wave of inclusive economic development that can be the foundation of Nigeria’s economy for decades.
To deliver this, the government has clearly and publicly acknowledged the importance of creating an enabling environment for investment and taken a number of bold steps to address investment bottlenecks. From the tough decisions to unify the exchange rates, to the tightening of monetary policy and a focus on reviewing the tax regime to make it smoother and more efficient. They have also created target investment funds to support key sectors of the economy, from healthcare and agriculture to the small businesses that drive the economy.
The specific role of the digital economy is captured in the Federal Ministry of Communications, Innovation and Digital Economy’s 4 year 2023-27 growth plan, which envisages a further 15% increase in the contribution of the ICT sector to GDP growth, as well as 15% YoY increases in investment in the sector, both of which are projected to support a 100% increase in the annual net revenue that the sector delivers to government.
These are laudable and ambitious objectives, but they are impossible to achieve without deliberate sustained strategic and tactical action. If these actions are not taken, then the foundations that have been built are vulnerable and not only will these objectives be missed, but the industry will stagnate.
If you look carefully at the investment trajectory in the telecoms industry you can see two clear and concerning trends, which are being further exacerbated by the recent short term economic shocks. Between 2021 and 2022 industry CAPEX declined by 30.37% while industry Foreign Direct Investment declined by 46.9%. This happened at a time when operational expenses have surged and it has been exacerbated more recently by rising interest rates increasing the cost of debt. What that means is that industry expenditure has been diverted from capital (expansion and growth) to operations and that the investment environment has deteriorated. The ultimate manifestation of this has been the recent losses declared by major operators for FY 2023 and HY 2024.
This is further exacerbated by the multiple taxation ecosystem that continues to exist across Nigeria, with operators exposed to 54 different federal/state/local government taxies or levies, many of which are technically illegal. There is a perception that the telecoms industry is highly profitable and so can be treated as a ‘cash cow’ – we are now seeing the impact of this, and even though it is clear operators are suffering, more new taxes continue to be considered by the national assembly.
This is a critical moment. It is an inflection point. If we act, we can establish the platform for growth and the delivery of the government’s ambitious objectives. If we delay, or fail to take the decisions necessary, then the industry is likely to go in the wrong direction. This will not only damage the interests of investors, many of whom are Nigerian, but also impact the emergence of the innovative services and products that ride on telecoms infrastructure.
We believe that decisive action can turn this moment from a crisis into an opportunity. Following extensive research, the Association of Licensed Telecom Operators of Nigeria (ALTON), has developed a clear set of recommendations that can catalyse the next wave of growth in the industry, and for Nigeria. These are:
- Take immediate action on retail pricing: In the short term, this means an industry wide increase to retail tariffs, which were last reviewed in 2016, when the exchange rate was N373/$ and inflation at 18.4%. No industry can survive indefinitely in a rapid inflation environment and not be allowed to increase retail prices. Regulators have denied all recent requests, despite approvals being granted in other critical industries from power to fuel and transportation.
- Make industry pricing sustainable: Every price increase requires individual pre-approval from the regulator, which continues to use 2016 pricing guidance. This is an outdated regulatory model that is not representative of global best practice. ALTON recommends the implementation of a general authorization regime for tariff administration under which the NCC sets general pricing principles and requirements and operators independently align their tariffs with the set pricing requirements through self-certification, eliminating the need for prior approval.
- Provide concessionary funding to enable CAPEX investment: To continue to drive investment and growth in infrastructure, the industry needs access to concessionary finance. Establishing a dedicated financing facility will help mitigate the impact of recent interest rate increases and enable more investment.
- Build and expand regulatory capacity: With technology driving rapid change, we need to rapidly upskill the sector’s regulators to ensure the implementation of well structured regulation that provides the right balance between protection and investment incentive. Regulations need to be co-developed more constructively with industry on a regular basis.
If we can deliver each of these things, then we will have established the basis for long-term sustainable growth in the telecoms sector, and through it catalyse dynamic growth in Nigeria’s broader digital economy. This is achievable, and the time is now.
Engr. Adebayo is the Chairman of the Association of Licensed Telecom Operators of Nigeria (ALTON)
Broadcasting
King Shipping Felicitates with Aluo, NNL Chairman as He Bags Sports Administrator of the Year Award
A leading shipping company in the country, King Shipping Trading Maritime Services Limited has congratulated the Chairman of Nigerian National League ( NNL), Mr. George Aluo on his nomination for the Sports Administrator of the Year Award by the Imo State Chapter of Sports Writers Association of Nigeria ( SWAN).
In a congratulatory message he personally signed, the Managing Director/ Chief Executive Officer of the company, Bob Chukwuma Hyacinth, the company described Aluo as a Sports administrator per excellence whose nomination for the award did not come as a surprise to anyone. ”
The award to Mr. George Aluo, is well deserved and did not come to us as a surprise considering the various transformation he has brought to the country’s second tier League within a short period of time of being n charge of the league. ”
As he receives this award, we urge him not to relent in his efforts at making the NNL a household league in the country but to see it as a call to more meritorious service to the country”, concludes the statement by the company whose operations covers Ship Chandelling, Ship handling and repairs, supply of Diesel, commodities , beverages , shipping logistics, clearing and forwarding. Meanwhile, the company has also congratulated the wife of the Managing Director Mrs.Loretta Bob-Chukwuma on her birthday.
In a congratulatory message, the CEO described her as his pillar of success and prayed that God Almighty will continue to clothe her with garment of blessing, and good health ” I also want to use this occasion to congratulate my wife who is a year older today.
She has been the pillar of my success and I pray that the Almighty God will continue to bless her, clothe her with garment of blessings and good health as well as give her long life and prosperity to celebrate many more years in good health.”
By Lukman Otunuga, Senior Market Analyst At FXTM
America has chosen Republican Donald Trump as its 47th president following a tight race for the White House!
As of writing, Trump has secured 277 electoral votes with Republicans taking control of the Senate. If the House comes under his control, this will be a “red sweep” scenario.
Assets tied to the “Trump trade” rallied during the Asian session after Trump took an early lead with his victory keeping bulls in the game. US futures are flashing green, Treasury yields have jumped while Bitcoin hit an all-time high.
Before election day, we thoroughly discussed a list of assets that could soar on a Trump win:
· US dollar: jumped 1.8% – its biggest 1-day gain since February 2023 on the prospects of slower rate cuts by the Federal Reserve.
· Bitcoin: rallied almost 10% to hit a fresh all-time high above $75,000 as crypto enthusiasts cheered a pro crypto president.
· S&P500 index: futures climbed 1.4% signalling that the S&P500 will open hitting fresh all-time highs. As mentioned in our week ahead report, the prospects of corporate tax cuts and a softer regulatory environment under Trump is good news for US equity bulls.
What does this mean for Nigeria?
Trump’s victory may pressure oil prices as he is seen pushing for a further increase in domestic oil and gas production, leading to increased supply in the long term.
In addition, his policies could see a boost in US growth – triggering inflationary pressures.
Should this prompt the Fed to keep interest rates higher for longer, a stronger dollar may drag oil prices lower as a result. This could be bad news for major oil producing countries who acquire most of their revenues from oil sales.
For Nigeria, the combination of lower global oil prices and a stronger dollar could add to its woes as it navigates a rough period.
Here are assets that could be burned by Trump’s return to the White House:
· Gold: dropped as much as 1.5% thanks to a stronger dollar and rising Treasury yields. The prospect of slower Fed rate cuts could limit upside gains.
· Chinese stock indices: slipped this morning amid renewed fears over US-China trade tensions.
· European stock indices: flashed red due to concerns over the impacts of Trumps proposed tariffs on Europe.
· Currencies of major US trading partners: Euro (EUR), Chinese Yuan (CNH), and especially Mexican Peso (MXN) have all weakened against the USD.
The bigger picture…
Trump’s return to the White House will most likely set the market tone for the next few years with the USD, Bitcoin and other assets tied to the “Trump trade” the biggest winners.
Investors with some skin in the game have already experienced how markets reacted under Trump between 2017 – 2021.
Trump’s unpredictability, policy uncertainty and tariff wars with China left investors on edge. This and other major themes triggered sharp moves on the Vix index during his term. Market volatility jumped over 60% during Trump’s previous administration, from 2017 until 2020. Since then, volatility fell about 10% under President Biden.
What does this mean?
And Trump’s return to the White House is likely to trigger fresh levels of volatility across the globe.
· Trump’s proposed tariff increases in Europe and China could spark a global trade war.
· If this pushes up the prices for American consumers, a return of inflation may spell higher interest rates – boosting the USD.
· An appreciating USD could hit gold prices along with emerging market currencies.
· On the geopolitical front, Trump has already vowed to “stop wars” and swiftly end the war in Ukraine. Any major shifts in US foreign policy that escalate tensions could trigger risk-aversion.
By the way….
With the US election done and dusted, the next market-moving event could be Thursday’s Fed rate decision.
As discussed in our week ahead report, US interest rates are widely expected to be cut by 25 basis points in November. But the election outcome is likely to determine what action the Fed will take in December and beyond.
Traders are currently pricing in a 67% probability of another 25-basis point cut by December.
Given how Trump’s victory could lead to rising inflationary pressures down the road, this may prompt the Fed to keep interest rates higher for longer.
It will be wise to keep a close eye on the US dollar and gold which remain sensitive to US rate expectations.
· A less dovish than expected Fed may push the US dollar higher while pulling gold further away from its all-time high at $2790.
· If the Fed confirms that a December cut is still on the table, this may limit the USD’s upside while supporting gold prices.
Board of Trustees of the Northern Broadcast Media Owners Association (NBMOA) has filed a lawsuit against the broadcast company Arewa 24 Limited and seven other entities, alleging they are operating without proper licenses.
The case, set for hearing before Justice Omotosho at the Federal High Court in the Federal Capital Territory (FCT), lists the National Broadcasting Commission (NBC), the Federal Ministry of Information and National Orientation, the Advertising Regulatory Council of Nigeria (ARCON), the Federal Competition and Consumer Protection Council (FCCPC), MIPAN, MultiChoice, StarTimes, and ADVAN as defendants.
In a statement issued in Abuja, Alhaji (Dr.) Ahmed Tijjani Ramalan, chairman of the NBMOA Board of Trustees, highlighted concerns that the unlicensed operations of the defendants pose a threat to Nigeria’s established legal and competitive media landscape, impacting media owners and audiences nationwide.
Ramalan stated, “Our objective is to ensure a fair, regulated media environment in line with established broadcasting standards, while maintaining a commitment to the rule of law.”
The NBMOA affirmed its commitment to lawful broadcasting standards and noted that it would refrain from further public comments until the legal proceedings are concluded to respect the judicial process.
Stakeholders in Nigeria’s broadcasting industry are closely watching the case, as its outcome could have significant implications for media regulation and licensing across the country
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