Afrigather Nigeria’s Communications, Innovation, and Digital Economic system Minister, Bosun Tijani, has spent his first yr changing into a key determine within the telecom trade. He envisions a world the place each Nigerian can entry high-speed web through fibre-optic cables. We look at the progress and challenges in the direction of attaining that imaginative and prescient.
Niger, Nigeria’s largest state by landmass, borders six different states and the Republic of Benin. It additionally hosts an important 3,500-kilometre fibre optic cable community, owned by a number of operators and is the sixth largest fibre community that helps high-speed web throughout Nigeria.
Regardless of this, Niger State’s 6.7 million residents, most of whom reside on lower than $6 a day, get no high-speed web from the fibre infrastructure beneath their toes. In accordance with Suleiman Isah, Niger State’s Commissioner for Science and Know-how, web entry within the state is offered by lower than 400 telecom masts that serve the huge area.
That there’s a lot high-capacity fibre underfoot and but no high-speed for Niger state residents highlights the complexity of Bosun Tijani’s problem to supply web connectivity by fibre to tens of millions of Nigerians outdoors main cities like Lagos and Abuja.
Nigeria has 79,212.4 kilometres of fibre optic cables put in, predominantly serving city centres like Lagos, Abuja, and the Federal Capital Territory. Most of that’s intrastate fibre—last-mile supply to finish customers. Solely 35,000km of it’s spine fibre, a community of fibre cables that draw high-speed web from the varied worldwide submarine cables that serve Nigeria. Nigeria has eight cables, seven of which terminate in Lagos State. These cables embrace Nigeria Cameroon Submarine Cable (NCSCS), the SAT-3/WACS, MainOne, Glo 1, West Africa Cable System (WACS), African Coast to Europe (ACE), the Equiano cable owned by Google and the latest of them, 2Africa owned by META. In addition to 2Africa, which landed in each Lagos and Akwa Ibom; each one in all these cables terminates solely in Lagos. The spine community then distributes these cables throughout Nigeria.
Whereas states like Lagos and Abuja are effectively served by robust spine and last-mile supply, states with nearly all of residents within the decrease revenue vary, equivalent to Niger, Sokoto, Ebonyi, Kebbi, and Jigawa, stay underserved, primarily as a consequence of decrease common income per consumer (ARPU) figures in comparison with city areas, which discourage funding by personal sector gamers unsure concerning the returns on these investments.
Whereas the enterprise case for bringing fibre connectivity to main cities is evident, relying on personal corporations to attach states the place the enterprise case is weak has created a divide that the federal government believes is stifling the expansion and improvement of its rural areas and Nigeria’s financial potential.
The proposed resolution is a nationwide fibre spine that connects each state with the expectation that quick web entry will result in elevated productiveness and financial outcomes. This has been a thesis of Nigeria’s digital leaders since Omobola Johnson assumed the Minister of Communication Know-how position in 2011, and making it a actuality is a crucial a part of Bosun Tijani’s agenda. He envisions including 90,000km of fibre spine to deliver Nigeria’s complete spine community to 125,000km, making it the third longest in Africa, after South Africa and Egypt.
“Everybody is aware of that in case you elevate the standard of connectivity in any nation, you elevate the GDP. The projection in Africa is that you simply get virtually a 2.5% contribution to the GDP for a ten% enhance in connectivity,” he instructed TechCabal in Abuja.
His ministry’s strategic blueprint, launched in October 2023, focuses on enhancing connectivity for public establishments throughout all 774 native governments.
“Improved amount and high quality of connectivity will create brief and long-term alternatives by stimulating a extra vibrant digital ecosystem,” Tijani stated in a put up on X, marking his first yr as a minister.
The fibre rollout goals to spice up web penetration by 70% by 2025 and obtain 80% protection for underserved populations by 2027. The Strategic Blueprint additionally targets a 300-500% funding enhance by the tip of 2027. Tijani describes these objectives as “constructing the spine of the digital financial system.”
Bridging the connectivity hole calls for politicking and actively courting friendships with state officers, a sluggish course of in a authorities the place each chief has separate aims and agendas. Up to now yr, Tijani has discovered few mates keen to make the modifications in strategy that his plan will demand. Some governors, equivalent to Hope Uzodinma in Imo, have been receptive. However there may be nonetheless a lot work to do to get extra buy-in.
Suleiman Isah turned Niger’s Commissioner for Science and Know-how in August 2023 after a profession in IT safety on the Federal Inland Income Service. In accordance with him, the state has actively tried to draw operators by reducing right-of-way charges, which supplies corporations the suitable to put fibre cables, to ₦145 per metre for the previous six years. They haven’t achieved as a lot success as he would need.
Different states, dealing with income challenges, are reluctant to surrender the income from right-of-way charges linked to infrastructure tasks. Many states don’t really feel charge waivers translate to elevated web connectivity, and telcos have expressed reluctance to put fibre cables in new markets with out decrease charges as an incentive. In addition to, even when charges are lowered or waived, improved connectivity doesn’t at all times comply with.
In March 2024, Niger State waived right-of-way charges for one operator whereas providing incentives to different telcos. But, Isah instructed operators at a breakfast assembly organised by the Affiliation of Telecommunication Operators of Nigeria (ATCON) in July 2024, “We don’t have any broadband presence, the best presence we’ve is fibre to tower.”
These tensions and mismatch of expectations continuously lead to states denying telecom operators entry to deploy infrastructure.
On this charge battle, it’s the individuals who endure. Throughout Nigeria, 97 communities — villages and native governments residence to about 28 million individuals—lack web entry totally, in response to a spokesperson for the Nigerian Communications Fee (NCC). Solely 39% of the inhabitants at present resides inside 5 kilometres of a fibre community, with Lagos state having a excessive of 85% and Jigawa with a low of 12%, in response to the White Paper on Broadband launched by the Federal Ministry of Communications, Innovation and Digital Economic system.
The Broadband Problem in Numbers
Even in an ideal world the place states and telcos get alongside, there’s nonetheless the matter of how costly fibre optic deployment is.
Fibre Broadband Affiliation estimates deploying underground cables prices between $11 and $24 per foot. Utilizing the decrease determine, 90,000km of cable would value $3.2 billion, larger than the federal government’s $2 billion estimate.
Nigeria’s Nationwide Broadband Plan 2020-2025, launched in 2020 by former Minister of Communications and Digital Economic system Isa Ali Pantami, aimed to put at the very least 120,000 kilometres of fibre optic cables by 2025. In 2023, his successor, Tijani, revised the purpose to 90,000 kilometres by 2027, with $2 billion in funding required to succeed in that concentrate on.
A yr into Tijani’s tenure, there have been some important developments.
The discharge of the broadband blueprint in July 2024 was met with enthusiasm by trade operators and financiers, with a variety of traders instantly scrambling to fulfill with the minister and his staff. There may be reticence to talk on the file because the ministry works out the main points of the plan and as formal agreements have but to be signed. Nonetheless, one senior chief at a significant telco operator claimed operators are enthusiastic concerning the blueprint
“It borrows the very best a part of constructions like NIBBS or LNG. If operators are allowed to deliver their current belongings into the proposed SPV, they type the skeleton of a nationwide spine comparatively rapidly and that construction can develop quickly by means of each personal and authorities investments. We’re eager to see finalised implementation constructions and venture plans.”
In accordance with Tijani, seven improvement finance establishments (DFIs), together with the World Financial institution, Islamic Growth Financial institution, and Africa Growth Financial institution, have dedicated to offering the $2 billion wanted.
“They (DFIs) have shaped a gaggle and are already working. We’re organising a venture administration workplace. FEC [The Federal Executive Council of Nigeria] has already authorised so that’s being sorted,” Tijani instructed TechCabal. There’s a goal of 12 months to safe the cash for the venture. The minister acknowledges that any delay within the fundraising would probably delay the venture.
Securing $2 billion will set a brand new file in overseas direct funding into the telecom trade. The largest funding within the trade was roughly $942.8 million secured in 2019. Funding has since declined to lower than $400 million in 2022.
“We’ve important proof in Nigeria that driving important funding into the telecommunications house accomplishes that, as seen by the financial impression of the introduction of cell telephony, the touchdown of submarine cables on the coast and the rollout of terrestrial fibre throughout the nation,” Fola Fagbule, Deputy Director and Head, Monetary Advisory, Africa Finance Company (AFC) instructed TechCabal.
He famous that increasing broadband entry throughout the nation may have an analogous developmental impression as earlier large-scale initiatives.
“So we’re eager to see this venture succeed, and we’d be joyful to help it in all of the methods we are able to,” Fagbule stated.
Driving the agenda: The Particular Goal Car
The minister has additionally moved to ascertain a construction for utilizing the funding. President Bola Tinubu authorised a Particular Goal Car (SPV) in Could 2024 to supervise and handle the fibre community, with deployment anticipated to start in early 2025.
The SPV will probably mirror the three way partnership association within the Nigeria Liquified Pure Fuel (LNG) mannequin, the place the federal government owns a minority non-operating stake, and the personal sector owns the bulk stake. The construction additionally makes provisions for concessional debt from the DFIs, which provide extra beneficiant situations, together with below-market rates of interest and beauty intervals wherein the mortgage recipient is just not required to make debt funds for a number of years. Concessionary debt from improvement finance establishments begins from as little as 4% each year and is considerably cheaper than the price of fairness, the place telcos like MTN or cable corporations like Equinix may search to return 6% to twenty% of their value of capital to traders. Such debt additionally continuously comes with moratoriums lasting so long as ten years. Thus, the federal government is concentrated on elevating the majority of the $2 billion as concessionary debt, funding the extension of fibre spine to elements of the nation the place returns wouldn’t be aggressive for traditional business entities.
The SPV, which will probably be executed as a personal entity with an unbiased board of administrators and staff, would pay the debt as a going concern. The Federal Authorities will assure the debt.
The enterprise mannequin would come with gross sales or lease of cable providers to ISPs, Firms, last-mile corporations, and Cellular Community Operators (MNOs), who would then join the fibre to their towers to enhance the standard of service and broadband. The operators may also make investments their belongings within the SPV.
The SPV would give the investing operators interstate and backhaul entry to areas of the nation the place they haven’t constructed infrastructure but. They’d then be capable of commercialise their belongings extra aggressively than they could in the event that they needed to signal these agreements with each different operator individually and enroll clients in each area of the nation.
“A ultimate crucial level is that if the SPV succeeds, then their very own invested belongings grant them fairness in a significant and probably very profitable new entity,” stated the senior chief at a significant telco operator.
Many trade consultants are cautiously optimistic concerning the SPV and its potential to attain the minister’s web plans.
“(The SPV) has to incorporate trade practitioners who perceive the challenges of fibre infrastructure deployment, not merely authorities appointees with out the required experience,” stated Rotimi Akapo, companion and head of Telecommunications, Media, and Know-how at Advocaat Regulation Follow.
There’s additionally the matter of bringing state governments on board. Whereas Tijani has held conferences with state commissioners for Science and Know-how or ICT, together with these from Imo, Taraba and Lagos, formal agreements are usually not in place but.
“We’re but to have any formal assembly on the venture,” Isah stated in an interview with TechCabal. Nonetheless, the state is discussing with the NCC on the creation of incentives for waiving right-of-way charges. Niger state can be open to public-private partnerships (PPP) with knowledge centre suppliers and enterprise course of outsourcing (BPO) operators to make sure the extra fibre is totally utilised.
Isah believes improved communication between the ministry, the NCC and states will enhance synergy. It’s going to additionally assist incentivise states to guard fibre cable infrastructure. The minister is a needed lynchpin in selecting a standard customary and strategy and convincing these numerous entities to undertake them.
Managing a rising telecom sector
Curiosity in funding within the telecom sector is slowly growing regardless of trade challenges. In June 2024, ntel, the successor to NITEL (Nigerian Telecommunications Restricted, Nigeria’s earlier monopoly phone service supplier), introduced plans to lift $550 million following the appointment of Adrian Woods as the brand new CEO. 9Mobile, one in all Nigeria’s high 4 telcos, which has struggled during the last seven years, was acquired by LightHouse Telecoms in July 2024, hoping to rejuvenate its fortunes. Business watchers see these as constructive indicators.
Telecom operators say a definitive construction and outlined charges and agreements should come collectively rapidly for the minister’s plan to succeed. Nigeria’s states will play a key position within the success of the SPV, and to this point, their approaches to taxation, right-of-way charges and infrastructure improvement are something however uniform. Proper-of-way charges in states like Osun have soared from ₦1,350 to ₦3,000. In distinction, states like Katsina, Edo, Nasarawa and Anambra have waived right-of-way charges, whereas Kwara and FCT cost ₦1 and ₦145, respectively. The numerous state approaches make technique and planning difficult and don’t encourage large-scale investing.
State company officers’ denial of entry to tower places has additionally change into rampant. In 2023, over 18,000 location entry denials had been recorded, with states imposing hefty fines for fee delays, in response to knowledge shared by IHS Towers. Telcos like MTN Nigeria confronted fines exceeding ₦1 billion from Osun and Cross River States for right-of-way violations. An organization spokesperson instructed TechCabal that MTN is at present participating the states.
For states like Lagos, Cross River, Osun, and the FCT, which have championed the laying of fibre duct infrastructure by means of public-private partnerships (PPP), and are leasing that infrastructure out to operators, there are high quality issues.
“Some operators are usually not proud of the standard of civil works, the ducts, and different infrastructure developed by concession corporations,” Akapo stated. The SPV is predicted to set a standard customary for the trade. The telcos, who can be a part of the SPV, will probably be required to take part in setting this customary.
This raft of challenges has some trade veterans recommending different approaches to fixing the issue of Nigeria’s digital connectivity hole.
Is fibre the suitable strategy?
One of many challenges that issues trade gamers is how viable the returns will in the end look to operators and the scrutinising eyes of traders and bankers.
“A nationwide fibre spine requires a large funding that can take a very long time to generate a business return,” says Ladi Okuneye, CEO of UniCloud Africa. “Securing funding is difficult, particularly when a lot of Nigeria’s geography doesn’t promise a transparent return on funding.”
“My suggestion can be to mix the fibre deployment with a mixture of satellite tv for pc connectivity and different terrestrial wi-fi options, particularly within the early phases.” Okuneye proposed. “This can allow the fibre rollout to be prioritised round areas of the nation the place business, bandwidth-hungry end-user purposes are already in use.”
The Minister does recognise the constraints of fibre as a sole panacea, therefore he’s launched yet one more initiative – Mission 774 LG Connectivity, which goals to attach all 774 Native Authorities Secretariats in Nigeria by means of current infrastructure from two entities that sit beneath his purview, NigComSat Restricted and Galaxy Spine. NIGCOMSAT owns and operates the Nigerian Communications Satellite tv for pc programs, whereas Galaxy is a government-owned ICT & web supplier that owns a variety of belongings. Whereas there are advantages to the blended strategy, satellite tv for pc connectivity can be costly. The present NigComSat-R1 will probably be decommissioned in 2025 when it expires after 15 years in orbit. The nation is at present looking for investments in two satellites that may exchange NigComSat-R1. Launching a single satellite tv for pc can value anyplace between $10 million and $400 million relying on the car used.
One more space of concern is how lengthy it is going to take to deploy 90,000 kilometres of fibre throughout Nigeria’s 774 native governments. Jinmi Oluanuiga, who helped draft the 2012 Nationwide Broadband Plan, estimates that deploying 50,000 kilometres may take as much as 20 years.
To attain 90,000km of fibre in 2 years, the SPV should construct 123 km day by day for 2 years. To make that occur, each bolt and nut on the venture wheel should operate with out downtime all through the interval.
Kenya, with a smaller land mass, beforehand deliberate to put 100,000km in 5 years and revised it to 2 years in April 2024 when it turned apparent they may use current infrastructure to attain the goal. This required reviewing the deployment technique by partnering with Kenya Energy and Lighting Firm’s nationwide grid infrastructure. Quite than dig new holes for fibre optic cables, the Kenyan Ministry of Info, Communications, and Digital Economic system makes use of the facility strains for high-speed web roll-out.
Tijani’s SPV playbook already borrows some components from Kenya’s. However to fulfill its personal aims, the SPV have to be up and operating, and the $2 billion have to be within the financial institution ready for fast deployment.
Getting it finished
As a political appointee, Tijani has set formidable timelines for himself, and an impatient public consumed tales of tech trade expects an motion man who will instantly resolve all issues. In a political atmosphere the place a cupboard reshuffle may ship the minister out of workplace, lots hinges on velocity.
The fact of delivering significant digital improvement is significantly extra measured. For the Minister’s broadband plan to come back into focus, there may be an armada’s price of preliminary work that have to be accomplished – technical feasibility research to find out what current belongings may match into the SPV, technical feasibility research to find out what strategies of fibre deployment will probably be most cost-effective inside Nigeria’s various terrains, technical feasibility research to find out what fibre thicknesses are appropriate for what areas. The truth is, the technical feasibility research being carried out now relaxation on the again of analysis and research finished by earlier ministers. The Nigerian Nationwide Broadband Plan 2020-2025, launched by former Minister Isa Pantami, is continuously referenced.
Whereas establishments just like the AFDB and the World Financial institution have indicated help for the venture, that help have to be transformed into formal commitments which are authorised by threat committees. These committees will wish to see each final one of many aforementioned feasibility research, not simply technical feasibility research but additionally business viability research, environmental impression surveys, and extra.
Getting the SPV authorised by the Federal Authorities and the Federal Govt Council (FEC) is already a significant success for the minister. And but, it is just a primary step. The inner operational construction of the SPV must be outlined, and leaders have to be chosen for what will probably be a big working entity in its personal proper. The construction wherein funds will enter that entity must be outlined, together with how contributions from the various contributors within the SPV will probably be valued.
Detailed engagement with the states, operators, and different financiers is pressing, but it surely should essentially wait till the above work is both accomplished or effectively sufficient underway for the messaging to these entities to be significant.
So, how ought to the general public decide his success or lack thereof?
Progress on a few of the factors above will present significant indicators.
The Minister expects monetary preparations with the DFIs to be in place inside six months. If he can announce important formalised funding commitments inside that interval, that can present that he’s not alone on this; the cash can be onboard.
The SPV entity must be formally constituted with management with a pedigree to ship work of this magnitude and impression. The standard of the staff he proclaims and their readiness to get to work will probably be a robust indication of the chance of success for this venture.
As soon as these milestones are hit, one would anticipate to see extra strong engagement with the states and different authorities constructions that must help this plan. Signal-off on uniform phrases inside the subsequent yr to 18 months can be a extremely constructive sign.
Finally, it could be much less essential that the Minister lay 90,000km of cable earlier than 2027 than that he has provide you with a imaginative and prescient for funding and delivering a big infrastructure venture that may change Nigeria’s digital future and that he has secured the buy-in of the federal government and severe monetary backers. If he can deliver collectively the entire items that may make that imaginative and prescient a actuality, he would have succeeded tremendously earlier than the primary piece of cable will get laid.
* -The information on 97 communities throughout Nigeria is from December 2023.
