Foreign investment in Nigeria's telecommunications sector declined by 91 percent in the first quarter of 2026, attracting just $7.24 million in foreign capital. This figure is a sharp reduction from $80.78 million recorded in the first quarter of 2025 and a 93 percent decrease from the $103.36 million received in the fourth quarter of 2025, marking the sector's weakest quarterly performance in over four years, according to new data from the National Bureau of Statistics (NBS).
This downturn occurred despite regulatory reforms, tariff adjustments, and substantial spending by operators to enhance network infrastructure. The Nigerian Communications Commission (NCC) had approved a 50 percent tariff adjustment for telecom operators in January 2025, a measure intended to improve industry revenues and attract new investment. Additionally, telecom companies invested more than N2.5 trillion in network expansion and upgrades during 2025, representing one of the highest annual investment levels for the industry.
The decline in telecom investment contrasts with overall capital inflows into Nigeria, which increased to $10.37 billion in the first quarter of 2026, an 83.8 percent rise from the same period in 2025. This broader inflow was predominantly directed towards the banking and financial sectors, which together accounted for over 96 percent of the total. Banking attracted $7.55 billion, while the financing sector received $2.43 billion, reflecting a preference among foreign investors for shorter-term opportunities seeking quicker returns.
Portfolio investments constituted approximately 95 percent of the total capital imported during the quarter, with foreign direct investment (FDI) remaining low at $135 million. This trend indicates that investors are increasingly drawn to high-yield financial instruments rather than sectors requiring patient capital and long-term commitments, such as infrastructure projects. Industry stakeholders have expressed concerns that these figures may impact the telecom sector's ability to secure the long-term capital necessary for sustained network expansion and to meet the growing demand for digital services, at a time when Nigeria aims to deepen broadband penetration and strengthen its digital economy.