FG Rejects States’ Hike of RoW Charges

Isa Pantami

•Says high cost for telecom infrastructure violates NEC’s resolutions

Iyobosa Uwugiaren in Abuja

The federal government has condemned what it described as state governments’ disregard of Right of Way (RoW) Charge Agreement reached by the National Economic Council (NEC) by increasing the RoW charges in disregard of NEC resolutions.

In a statement he issued yesterday, the Minister of Communications and Digital Economy, Dr. Isa Pantami, said the decision of some states to increase the Right of Way charges was in disregard of the resolutions reached by NEC.

THISDAY had reported exclusively that agencies and ministries of no fewer than 14 states increased the cost of RoW from the initial fee of between N300 to N500 per linear metre to between N3,000 and N6,000 per linear metre.
The cost of RoW on federal roads is N145 per linear metre.

Some of the agencies and ministries include, the Lagos State Infrastructure Maintenance and Regulatory Agency (LASIMRA), State Information Technology Agency (SITA) of Ondo, Cross River State Infrastructure Safety and Regulatory Agency (CRISRA), Kogi State Environmental Protection Board and Kano State Urban Planning and Development Authority.

Others are: Kogi State Internal Revenue Service (KSIRS), Kaduna State Urban Planning and Development Authority (KASUPDA), Osun State Ministry of Environment and Sanitation, Anambra State Internal Revenue Services, Enugu State Ministry of Environment and Mineral Resources, Adamawa State Ministry of Environment, Imo State Environmental Transformation Commission (Imo ENTRACO), Kebbi State Ministry of Environment and Solid Minerals and Gombe State Internal Revenue Board.
Some of the states have reportedly refused to collect the old rates for RoW and were no longer issuing RoW licences in their various states.

The minister recalled that in 2013, NEC set up a committee comprising state governors and ministers to review the issue of multiple taxations in the telecommunications industry in Nigeria and the impact.
The minister said the committee, after extensive and wide-ranging consultations, resolved to harmonise the taxes applicable to broadband-related activities and streamline the taxation management processes nationwide.

According to him, as part of the efforts to deepen broadband penetration for the social and economic development of the country, the committee agreed to the uniform RoW charge of N145 per linear metre of fibre.
He added that in October 2019, the federal government wrote all governors, drawing their attention to the resolutions and soliciting their support towards the realisation of the National Digital Economy by fast-tracking the deployment of broadband infrastructure for the provision of affordable internet services to underserved and unserved areas.

“It is true that the digital economy today is strategically dominating the world economy. Oxford Economics puts the current value of the digital economy at $11.5 trillion, which is about 16 per cent of the world economy. Furthermore, the World Economic Forum revealed that 60 per cent of the global economy is expected to be digitised by 2022.

With the renaming of the Federal Ministry of Communications to Federal Ministry of Communications and Digital Economy as well as the unveiling of the National Digital Economy Policy and Strategy by Mr. President, we are on the path of realising the potentials of the digital economy,” he explained.
The minister said it was disheartening that some states disregarded these resolutions and in some cases, had increased the RoW charges by over 1,200 per cent.

He said the hike would impact negatively on the efforts being made by the federal government.
“It is established that there is a strong correlation between a country’s broadband penetration and its Gross Domestic Product (GDP). An ITU study on Africa indicates that a 10 per cent broadband penetration would result in an increase of 2.5 per cent of GDP per capita.

We are therefore calling on all state governors, especially those that have made public their decisions to increase the RoW charges, to reconsider these decisions in the interest of Nigerians as well as for the socio-economic growth and development of the country. We also draw their attention that these decisions, if implemented, will result in an increase on the costs of operations of the telecoms operators which will naturally be passed to the consumers,” he added.