Despite concerns over the 14% export tariff recently introduced by former U.S. President Donald Trump, Nigeria’s telecom industry remains largely insulated. The reason? It’s an import-driven sector.
Telecom operators in Nigeria don’t rely on exports to stay afloat, they bring in almost all their equipment and infrastructure from China, the U.S., and Europe.
“It won’t affect the industry much because the operators import everything they use directly. They don’t export,” said Tony Emoekpere, President of the Association of Telecommunication Companies of Nigeria (ATCON), which represents key players like ISPs, tower firms, and data centres.
Still, while the direct impact may be limited, industry leaders warn of ripple effects that could surface through the wider economy.
Gbenga Adebayo, Chairman of the Association of Licensed Telecommunication Operators of Nigeria (ALTON), noted that while there’s little to no hardware exported from Nigeria, international call rates could be affected if the U.S. increases VAT on telecom services. Local operators would then have to respond accordingly.
And that’s just one of many possible knock-on effects. Nigeria’s weakened naira, rising inflation, and growing operational costs are already putting pressure on telcos. Earlier this year, operators introduced a 50% hike in service tariffs, an effort to stay afloat and maintain service quality amid these challenges.
The new U.S. tariff, though not targeting telecom directly, could still impact the sector indirectly by tightening foreign exchange inflows. The U.S. is Nigeria’s second-largest export destination, with non-oil goods valued at ₦1.6 billion as of Q3 2024, making up over 8% of total exports, per NBS data.
As these exports become more expensive and less competitive, Nigeria could see lower FX earnings, further devaluing the naira. That, in turn, would make it even more costly for telecom firms to import essential infrastructure, stretching budgets and potentially slowing network expansion and upgrades.
Despite the recent tariff increases, many consumers continue to face spotty service and unreliable connectivity. In a price sensitive market like Nigeria, operators are walking a tightrope, trying to balance cost recovery with the need to retain customers.
In short, Nigeria’s telecom sector might be dodging the direct hit from the U.S. tariff, but it’s not entirely out of the woods. As global trade dynamics shift, operators will need to adapt fast, and government policy support will be crucial.
The good news? According to telecom leaders, the Nigerian government is open to negotiations with the U.S.—a move that could ease future pressure on the industry.