Nigeria’s vision to achieve 70% broadband penetration by 2025 is hitting significant roadblocks, raising concerns about the nation’s economic future and its digital transformation agenda.
The National Broadband Plan 2020-2025, a blueprint aimed at connecting a vast majority of Nigerians to high-speed internet, has seen limited success over the past four years.
As of March 2024, data from the Nigerian Communications Commission (NCC) indicates that broadband penetration has reached 43.53%, up from 39.54% in April 2020 when the Plan was first introduced. This modest increase of just 4% over four years falls far short of the Plan’s milestones. Originally, the goal was to achieve 50% penetration by the end of 2023, but the actual figure was 43.71%, dipping slightly to 43.53% in early 2024.
Tekedia Mini-MBA edition 15 (Sept 9 – Dec 7, 2024) has started registrations; register today for early bird discounts.
Tekedia AI in Business Masterclass opens registrations here.
Join Tekedia Capital Syndicate and invest in Africa’s finest startups here.
Missed Targets and Unrealized Ambitions
The Plan’s architects recognized several hurdles, such as the high cost of smartphones, and proposed setting up at least one local smartphone assembly plant by 2023 to make devices more affordable. Yet, Nigeria remains without such a facility, and the depreciating Naira has pushed smartphone prices to around N65,000, a far cry from the target of N18,000.
Additionally, the Plan called for 70% of telecom subscriptions to be on 4G by 2023. Current NCC data shows only 32.74% of the 219 million active mobile subscriptions are on 4G, while a significant 56.97% are still using 2G networks.
Notable Progress in Speed and Data Pricing
Despite these setbacks, there have been some achievements. The Plan set internet speed targets of 15Mbps download in urban areas and 5Mbps in rural areas by 2023. Thanks to 5G launches by MTN, Airtel, and the entry of Starlink, which offers over 50Mbps, these speed goals have been surpassed in both urban and rural settings. Moreover, data prices have fallen below the Plan’s target of N700 for 1GB, with some operators offering data for as low as N350 per day, although these operators are now seeking regulatory approval to increase prices.
Challenges to Implementation
In the issues stalling the Plan’s progress highlighted by Engineer Gbenga Adebayo, Chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), Multiple taxation and high Right of Way (RoW) costs are significant barriers to infrastructure deployment.
The Plan estimated a need for $3.5 billion to $5 billion in investments over five years, but foreign investment in Nigeria’s telecom sector has been declining sharply. The National Bureau of Statistics (NBS) reported a 239% drop in Foreign Direct Investments (FDIs) in 2023, falling from $456.83 million in 2022 to $134.75 million in 2023.
“The current investment figures are a clear indicator of the challenges facing the industry. This is adversely affecting the expansion of network infrastructure,” Adebayo said, adding that limited access to foreign exchange further hampers the ability of operators to expand and deploy more broadband infrastructure.
Government’s Last-Ditch Efforts
In response to these challenges, the Ministry of Communications, Innovation, and Digital Economy has launched several initiatives to bolster connectivity. One notable project is Project 774 LG Connectivity, aimed at providing internet access to all 774 Local Government secretariats across Nigeria. Additionally, the government has announced plans to establish a Special Purpose Vehicle (SPV) to deliver an additional 90,000km of fiber optic cable, boosting Nigeria’s connectivity backbone to at least 125,000km from the current 35,000km.
“The SPV will build the additional fiber optic coverage required to take Nigeria’s connectivity backbone to a minimum of 125,000km,” Dr. Bosun Tijani, the Communications Minister said.
Nigeria’s journey towards achieving its broadband penetration goals is fraught with challenges. The slow progress threatens to delay the country’s digital transformation and economic development.
Analysts note that while the government’s recent initiatives are a step in the right direction, addressing fundamental issues like investment, taxation, and regulatory bottlenecks is crucial for Nigeria to harness digital technologies for economic growth and social inclusion in the coming years.