Emma Okonji
Worried about the continuous depreciation of the value of naira, which has further weakened to N470 to a dollar, coupled with the scarcity of dollar, the President of the Association of Telecommunications Companies of Nigeria (ATCON), Mr. Olusola Teniola has said that unless government introduces short-term palliative measures to address the situation, more businesses are likely going to collapse within a short period of time.
Teniola, who raised the alarm while addressing journalists at the weekend in Lagos, on the deplorable state of businesses in the telecoms sector, listed several challenges that telecommunications companies are facing in doing business in Nigeria, while calling on government to expedite action in proffering long-lasting solutions to the issues.
According to him, several businesses in the telecoms sector and across other sectors of the Nigerian economy, are shrinking because of the non-availability of dollar to import telecoms equipment, which he said, are usually transacted in dollars. “Aside scarcity of dollar, the rate at which dollar is converted to naira is so high that it has made nonsense of legitimate transactions that are carried out in dollar denomination. Business owners can no longer make importations because of the scarcity and the high rate of dollar, and businesses are shrinking,” Teniola said.
While listing some of the challenges in the telecoms sector, Teniola said most telecoms companies could no longer participate in the auction process of spectrum licences and that those that have already been awarded spectrum licences could not rollout services across the country as a result of the difficult business environment of the country.
Responding to questions relating to the licensing of MainOne and IHS as Infrastructure Companies (InfraCos) for Lagos and North Central respectively, by the Nigerian Communications Commission (NCC), Teniola said their inability to rollout commercial services with the InfraCo licences, was not unconnected with difficult businesses situation in the country, occasioned by forex.
He said the current difficult business situation in the country, would continue to discourage foreign investors from investing in the country, if nothing was done about it.
He therefore called on government to introduce short-term palliative measures like tax rebates and tax concession for businesses, especially telecoms businesses that are operational in the country.
Addressing the current move by the National Assembly members to increase telecommunications tax bill by 9 per cent, which has passed the first and second readings at the floor of the National Assembly, Teniola said although government needs money to fund national projects and that such monies are generated through taxes, he however advised government to thread with caution in order not to further shrink telecoms business in the country. According to him, the telecoms operators were already over-burdened with government taxes and levies, insisting that further tax on telecommunications, will exclude about 10 per cent of the population of telecoms subscribers, which is over 20 million, from getting access to telecommunication services.
However, since government needs tax revenue to execute projects, it should consider reducing the proposed introduction of 9 per cent telecommunications tax bill to 1 per cent, which could easily be absorbed by the telecoms operators, Teniola said.
“As an advocacy body, ATCON will continue to appeal to government to amend some of its decisions in order to encourage the ease of doing business in the country,” Teniola added.
He welcomed the recent move by the federal government to diversify the Nigerian economy in the area of information and communications technology (ICT) and agriculture, but stressed the need for government to provide the necessary ICT infrastructure that would help to boost development across the country. He said government must deal with the fundamentals in the ICT sector, in order to fully diversify and grow the Nigerian economy.
