Tariff Increase Proposed
Nigeria’s Minister of Communications, Innovation, and Digital Economy, Bosun Tijani, has announced plans for an impending telecom tariff hike. The Nigerian Communications Commission (NCC) is tasked with finalizing the details of this adjustment.
Rewane’s Support for the Tariff Adjustment
Bismarck Rewane, CEO of Financial Derivatives Company, has publicly supported the proposed tariff increase. Speaking on Channels Television’s “Business Morning,” he argued that the hike would bolster the sustainability of the telecom sector. “Telecommunications tariff hike will help reduce inflation because it increases productivity,” Rewane stated.
Market and Investor Reaction
The financial markets have responded positively to the news, with MTN shares rising by 10% to 220, indicating investor confidence in the potential benefits of the tariff adjustment. Rewane noted, “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.”
READ ALSO: FG Announces Modest Telecom Tariff Increase, Rejects Operators’ Full Proposal
Economic Implications
Rewane elaborated on how this tariff increase could indirectly lead to higher productivity within the sector. He explained, “Because of an increase in tariff and an increase in investment to make the industry sustainable, they’re going to see an increase in productivity, not directly but indirectly.” He further suggested that this productivity boost could moderate inflation, aligning with the goals of policymakers.
Moderation in Expectations
However, Rewane tempered expectations regarding the extent of the tariff increase. He clarified, “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.”
Alignment of Policy and Industry
Rewane highlighted the synergy between policymakers, regulators, and telecom operators, indicating that all parties are working towards a sustainable sector with improved service quality. “We also heard from the regulator saying that we will hold these guys to quality of service,” he added, pointing out the comprehensive approach to ensure that the tariff hike benefits outweigh the costs.
