Minister Tijani Justifies 50% Telecom Tariff Hike Amid Rising Operational Costs, Inflation

Minister of Communication, Innovation, and Digital Economy Bosun Tijani on Tuesday defended the recent 50% tariff hike approved for telecommunications companies, explaining that it was due to rising operational costs and inflation.

During his appearance before the joint Senate and House of Representatives Committees on Communications, the minister also revealed that the government plans to invest about N6 billion to lay 90,000 kilometers of fiber optic cables, Punch reported.

This expansion aims to increase the country's fiber optic capacity from 35,000 kilometers to 125,000 kilometers. He added that the tariff hike aligns with broader economic trends where higher tariffs lead to increased consumer prices, especially because of the added costs of imported goods.

According to him, tariffs act like a sales tax, resulting in a one-time price increase rather than ongoing inflation. The minister explained that the planned expansion of fiber optic cables is intended to boost growth in key communication sectors across the country.

He noted that many countries, apart from South Africa, Egypt, and perhaps Tunisia, have a significant shortage of cable. He believes this will become a major industry and wants Nigerian companies to not only lay cables within Nigeria but also provide these services to neighboring countries.

Tijani emphasized that the goal is for Nigerians to become skilled workers in this field. He pointed out that companies in South Africa have grown by supporting global business and have created job opportunities, and Nigeria aims to do the same.

Chairman of the Senate Committee on Communication Senator Shuaib Salisu stressed on the important role the communication sector plays in the nation's economic growth.

He called for a review of the proposed 2025 budget for the Ministry to ensure it can carry out its responsibilities effectively. The Committee then passed a motion asking the Committees on Appropriation to consider increasing the Ministry's 2025 budget.

SERAP has given a 48-hour ultimatum to reverse the 50 percent tariff increase, calling it "unlawful." The organization said that if the increase isn't reversed within the deadline, it will take the matter to court.

The tariff hike, which aims to help sustain telecom operations, has sparked frustration among many Nigerians, especially low-income earners who depend on affordable communication services.

Earlier this month, Nigerian telecommunications companies had proposed a 100% increase in their tariffs, as per MTN Nigeria's CEO Karl Toriola.