The announcement of a proposed telecom tariff hike in Nigeria has caused heated debates, with Financial Derivatives CEO Bismarck Rewane stepping in to cheer the decision as a “necessary move” to stabilize the sector and, somehow, combat inflation. It’s funny right? In a country where the cost of living is already crushing, we’re being told that paying more for calls and data will magically save us from rising inflation.
On Wednesday, Nigeria’s Minister of Communications, Innovation, and Digital Economy, Bosun Tijani, confirmed the government’s plan to increase telecom tariffs, stating that the Nigerian Communications Commission (NCC) would oversee the adjustment process. Rewane, who appears to have found a silver lining in this policy, claims the hike will “make the sector more sustainable.” A curious statement, considering Nigerians already suffer from poor service and exorbitant rates compared to income levels.
“Telecommunications tariff hike will help reduce inflation because it increases productivity,” Rewane boldly declared during an interview on Channels Television’s Business Morning.
Rewane pointed out that the market seems optimistic, citing a 10% increase in MTN’s stock price following the news. “Yesterday, the price of MTN shares went up by 10% to 220. The investors have already factored that in and are expecting a lot of good goodies,” he said. Okay, what goodies are being prepared for the average Nigerian?
To his credit, Rewane tried to connect the dots between higher tariffs and economic growth, albeit in a roundabout way. According to him, the increased tariffs will drive investment into the telecom sector, leading to better sustainability and indirectly boosting productivity. “Any increase in productivity and output is likely to allow inflation to moderate, which is the goal,”
Rewane also highlighted the government’s alignment on the issue. “We heard from the policymaker Bosun Tijani who was very clear that we want a sustainable sector. But we also heard from the regulator saying that we will hold these guys to quality of service,” he noted. Of course, promises of better service quality have been made before, yet dropped calls and frustratingly slow internet speeds remain the usual.
In a bid to reassure the public, Rewane emphasized that the tariff hike wouldn’t be astronomical. “Will they get 100%? No, they will definitely not. We suspect that we are going to likely see something between 40 and 50%, which is fair after so many years of static changes,” he said. Fair? For whom? It’s difficult to see fairness when a significant portion of the population is already struggling to afford basic necessities, let alone keep up with the digital economy. A hungry man wouldn’t think about network.
That Nigerians are being asked to pay more for services that often fall below acceptable standards. While policymakers and operators may be aligned in their goals, the everyday consumer is left struggling with the reality of higher costs.
