Telcos

Doing business in Nigeria is becoming more difficult; even the big guys are complaining. During a panel discussion at the Telecom Townhall Forum hosted by Financial Derivatives Company (FDC) on Tuesday, CEOs of MTN Nigeria, Airtel Nigeria and IHS Towers complained that the cost of offering telecom services in Nigeria is becoming too expensive to handle.

Multiple taxations, worsening power supply, and currency volatility are eroding business margins and skyrocketing the cost of providing services. Providing telecom services costs a lot of money: the fibre cables that run throughout the roads and cities in Nigeria, the network towers you see in your neighbourhood, and the cost of maintaining these infrastructures are sky-high.

Telcos have spent at least $3 billion dollars in yearly investment since 2001, and more than $4 billion to keep Nigerians connected to the internet, according to Bolaji Balogun, Chapel Hill Denham CEO.

The CEOs are now pushing for tariff increases on data and voice subscriptions. All this coming at a time when Nigerians are facing high inflation. A potential tariff hike will be a difficult pill for Nigerians to swallow. However, there’s a clear indication of the challenging business environment in Nigeria, where even industry giants are struggling to stay afloat.

Did you know that 57.7% of the business owners in Nigeria’s informal economy are under 34 years old? Click here to find out more about the demographics of Nigeria’s informal economy.

Economy

When inflation is on the rise, central banks typically increase interest rates to make borrowing more expensive, which reduces spending and ultimately slows down price increases. In July 2023, the Bank of Ghana (BoG) Monetary Policy Committee (MPC) raised its interest rates to 30% to help drop its inflation from 43%.

The BoG kept the rates constant for about five months, helping to drive down inflation to about 23.2% in Dec 2023. Yesterday, headline inflation for July eased to about 20.90%, the lowest since March 2022 (19.40%). This reduction was attributed to a decline in the prices of food. July’s deflation result is a continuation of a slowdown in the country’s inflation rate. 

While July’s figure is still very far from the BoG target of 8%, analysts at Stears predict that Ghana’s inflation will reach 15% in the coming months. 

The current rates might also prompt the MPC—which is keen to keep rates higher for longer to hedge against inflation—to review interest rates in its next meeting. The MPC will meet in September to decide the rates. 

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Opportunities

• The Africa Prize for Engineering Innovation is open to African innovators creating engineering solutions to local challenges. Innovators from sub-Saharan Africa should pitch viable engineering products or services that will have social or environmental benefits to the continent. Apply for the chance to get up to $25,000 in funding. 
• The Future of Capitalism Tech Startup Competition is offering $1 million to one lucky tech startup that can transform how businesses today operate. If your tech can save costs, boost efficiency, increase productivity or customer satisfaction, then apply by September 30 for a chance to win. 
• Applications are now open for the 5th cohort of Microsoft’s GrowthX Accelerator Programme. AI Startups can apply to join the eight-week incubator that will provide $25,000 worth of azure credits, mentorship from some of the biggest tech corporations and investor readiness lessons. Apply by September 2, 2024. 

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