Telcos Warn that a Shortage of Foreign Exchange Could Impact the Creation of Jobs

The Association of Licensed Telecommunications Operators of Nigeria asserts that a shortage of foreign exchange will impact job creation in the telecommunications sector.

Telcos Warn That a Shortage of Foreign Exchange Could Impact The Creation Of Jobs
Telcos Warn That a Shortage of Foreign Exchange Could Impact The Creation Of Jobs

ALTON disclosed this information at the Nigerian Communications Commission industry interactive session with the new Executive Vice Chairman and Chief Executive Officer of the commission, Dr. Aminu Maida, in Lagos recently.

Telcos Warn that a Shortage of Foreign Exchange Could Impact the Creation of Jobs

Gbenga Adebayo, Chairman of ALTON, emphasized the Federal Government’s goal to generate around two million digital jobs by 2025. He expressed the need for foreign exchange, stating that certain requests are currently under consideration. Adebayo stressed the importance of prioritizing access to foreign exchange to ensure the feasibility of job creation, highlighting potential challenges if individuals face difficulties meeting their foreign exchange obligations for application purchases due to scarcity.

Therefore, obtaining access to foreign exchange has become crucial for us.

Telecom services rely on foreign inputs, making access to foreign exchange crucial for the sector.

Telcos recently requested a dedicated forex window to support their foreign exchange requirements.

When addressing the House Committee on Communications, they suggested, “Collaborate with pertinent stakeholders like the CBN to implement intervention measures supporting the telecommunications sector. Such interventions may involve establishing a dedicated forex window for the industry and creating long-term, low-interest infrastructure funding schemes, among other initiatives.

Telecom Giants Navigate Forex Challenges and Urge Industry-Wide Price Review

MTN Nigeria and Airtel expressed concerns about the impact of forex scarcity on their businesses in their financial statements.

MTN stated, “Due to the prolonged scarcity of forex in the market, MTN Nigeria used trade lines to finance the creation of confirmed irrevocable letters of credit for its network capex investments, ensuring sustained revenue growth.

Airtel further mentioned, “In certain markets, we encounter situations where there is a limited supply of foreign currency in the local monetary system. This not only restricts our capacity to fully leverage, at the group level, the robust cash generation by those OpCos but also affects our ability to make prompt foreign currency payments to our international suppliers.

Meanwhile, the telcos reiterated their need for a price review, emphasizing that the current pricing regime in the industry no longer favors their business.

Adebayo emphasized, “The current pricing structure is unsustainable. We need to have an open discussion about it. Considering the current trajectory, I am uncertain if we can maintain the industry with the existing pricing. It is crucial for us to explore the best mechanism to initiate a necessary price review.

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