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The Nigerian government has expressed its disapproval of hike in the Right of Way (RoW) charges by over 1,200% in some states warning that such wanton increments could jeopardize Nigeria’s goal to expand affordable internet services to underserved and unserved areas as well as undermine the national target for digital economy.
A statement this morning in Abuja by the Federal Ministry of Communications and Digital Economy expressed shock by the decisions of the states’ governments to hike right of way charges and consider it a threat to Nigeria’s ability to fast-track the deployment of nationwide broadband infrastructure.
“WE ARE THEREFORE CALLING ON ALL STATE GOVERNORS, ESPECIALLY THOSE THAT HAVE MADE PUBLIC THEIR DECISIONS TO INCREASE THE ROW CHARGES, TO RECONSIDER THESE DECISIONS IN THE INTEREST OF NIGERIANS AS WELL AS FOR THE SOCIO-ECONOMIC GROWTH AND DEVELOPMENT OF THE COUNTRY. WE ALSO DRAW THEIR ATTENTION THAT THESE DECISIONS, IF IMPLEMENTED, WILL RESULT IN AN INCREASE ON THE COSTS OF OPERATIONS OF THE TELECOMS OPERATORS WHICH WILL NATURALLY BE PASSED TO THE CONSUMERS.”
The
ministry said the hike disregards the resolutions
reached by the National Economic Council (NEC) on uniform Right of
Way (RoW) charge of N145.00 per linear
meter of fibre.
The Minister of Communications & Digital Economy, Dr Isa Ali Ibrahim Pantami, in the statement lamented that it was “disheartening to hear that some states have decided to disregard these resolutions and have, in some cases, increased the RoW charges by over 1,200%.
“This will no doubt impact negatively on the efforts being made by the Federal Government. It is established that there is a strong correlation between a country’s broadband penetration and its Gross Domestic Product (GDP). An ITU study on Africa indicates that a 10% broadband penetration would result in an increase of 2.5% of GDP per capita.”
RoW and other multiple taxes have been the bane of growth in Nigeria’s telecom sector for over a decade. Pantami has expressed determination to address the issues in order to move the industry forward.
Below is the ministry’s full statement.
We received with dismay the decision of some states of the Federation to increase the Right of Way charges in disregard of the resolutions reached by the National Economic Council (NEC).
It may be
recalled that in 2013, NEC set up a Committee
comprising State Governors and Ministers to review the issues of multiple
taxation in the telecommunications Industry in Nigeria and its impact. The Committee,
after extensive and wide-ranging consultations, resolved to harmonize the taxes
applicable to broadband related activities and streamline the taxation
management processes across the Federation. Specifically, to deepen broadband
penetration for the social and economic development of the country, the Committee
agreed to the uniform Right of Way (RoW) charge of N145.00 per linear meter of fibre.
It may also be recalled that in October 2019, we had written to all the State Governors, drawing their attention to these resolutions and soliciting their support and collaboration towards the realisation of the National Digital Economy by fast-tracking the deployment of broadband infrastructure for the provision of affordable internet services to underserved and unserved areas.
It is true that the digital economy today is strategically dominating the world economy. Oxford Economics puts the current value of the digital economy at $11.5 trillion which is about 16% of the world economy. Furthermore, the World Economic Forum revealed that 60% of the global economy is expected to be digitised by 2022. With the renaming of the Federal Ministry of Communications to Federal Ministry of Communications and Digital Economy as well as the unveiling of the National Digital Economy Policy and Strategy by Mr President, we are on the path of realising the potentials of the digital economy.
It is however disheartening to hear that some States have decided to disregard these resolutions and have, in some cases, increased the RoW charges by over 1,200%. This will no doubt impact negatively on the efforts being made by the Federal Government. It is established that there is a strong correlation between a country’s broadband penetration and its Gross Domestic Product (GDP). An ITU study on Africa indicates that a 10% broadband penetration would result in an increase of 2.5% of GDP per capita.
We are therefore calling on all State Governors, especially those that have made public their decisions to increase the RoW charges, to reconsider these decisions in the interest of Nigerians as well as for the socio-economic growth and development of the country. We also draw their attention that these decisions, if implemented, will result in an increase on the costs of operations of the telecoms operators which will naturally be passed to the consumers.
