Tariff hike should not exceed 60%, minister says

The Minister of Communications, Innovation and Digital Economy, Bosun Tijani, has said that a potential tariff increase in the telecommunications sector should not exceed 60 per cent.

He emphasised the need to balance the sustainability of the sector with affordability for Nigerians.

Tijani made this known during an interview on Politics Today on Channels Television on Wednesday.

When asked if he has a percentage threshold in mind, he replied, “I think it shouldn’t be more than 30 to 60 per cent.”

Highlighting the critical role of telecommunications in Nigeria’s economy, Tijani noted that the sector contributes about 14 to 16 per cent to the nation’s GDP and directly employs over 15,000 people, with an additional half a million benefitting indirectly.

He described the sector as a vital engine driving digital connectivity and economic growth.

The minister acknowledged the demands from telecom operators for a 100 per cent tariff hike, citing rising operational costs and inflation.

However, he stated firmly that such an increase would be detrimental to Nigerians.

Tijani explained that decisions on tariff adjustments must be evidence-based and guided by independent reports, such as the one recently concluded by KPMG.

He said the government’s goal is to ensure the sector continues to thrive without unduly burdening Nigerians.

The minister highlighted the significant investment required to maintain and expand telecommunications infrastructure.

He pointed to the importance of both physical and soft infrastructure, including towers, fibre optic cables, data centres and power solutions, as critical components for improving service quality.

While much of this investment is driven by the private sector, he revealed plans by the government to step in where private investment falls short, particularly in underserved rural areas.

He said the government is working on creating special-purpose vehicles to develop infrastructure in these locations to ensure more Nigerians have access to meaningful connectivity.

He also disclosed plans to lay 90,000 kilometres of fibre optic cable nationwide, a project estimated to take five to six years.

With support from the World Bank of about $500 million and other donors, the project is expected to commence by the third quarter of 2025.

Responding to concerns about the high cost of data and poor service delivery, Tijani noted that the government is collaborating with regulators to improve service quality and customer experience.

He said the Nigerian Communications Commission and the Federal Competition and Consumer Protection Commission recently signed an agreement to enhance customer service standards.

He acknowledged that service disruptions, often caused by vandalism of critical infrastructure, remain a challenge.

He added that the government had designated telecom infrastructure as a critical national asset to deter vandalism and reduce repair costs.

Tijani also spoke about efforts to expand broadband access and affordability. He announced plans to formally launch the National Broadband Alliance in February, which aims to extend affordable connectivity to public institutions such as schools, hospitals and local government offices.

Pilot projects, he said, have already provided free connectivity to six universities and several government offices.

Looking ahead, Tijani expressed optimism about Nigeria’s digital future.

He highlighted plans to increase foreign direct investment in the tech ecosystem from $1bn to $5bn annually by 2027.

He said the government is leveraging initiatives like the establishment of a technology hub in San Francisco to support Nigerian startups.