BD Insider 170: Telecoms attracted $75.6 billion investment in Nigeria

MTN Group says it will invest over $3.5 billion in Nigeria in the next five years. We covered this and India's plan to establish a technology institute in Tanzania.

BD Insider 170: Telecoms attracted $75.6 billion investment in Nigeria
President Bola Tinubu met with the Group Chairman, MTN, Mr Jonas Mcebisi, and his team alongside the Executive Vice Chairman, NCC, Dr Umar Garba Danbatta, at the State House on on Friday, July 7, 2023. (Photo: State House)

In this letter, we explore:

  • the growth of Nigeria's telecom industry
  • MTN's plan to invest $3.5 billion in Nigeria
  • the first Indian Institute of Technology Campus outside India

And other noteworthy information like:

  • the latest African tech startup deals
  • opportunities, interesting reads and more

The big three!

Nigeria's telecom industry attracted $75.6B investment

The news: According to the Nigerian Communications Commission (NCC), Nigeria's telecommunication industry received $75.6 billion in investment in 2021. These investments were from local and foreign investors, representing a 5% year-on-year growth over 2020.

The telecom sector's investment profile has recently experienced steady growth, from $68 billion in 2018 to $70.5 billion in 2019 and $72 billion in 2020.

The NCC Vice Chairman Umar Garba Danbatta also disclosed that the telecoms sector contributed ₦10.126 trillion as an aggregate quarterly contribution to GDP in 2022.

Know more: Per NCC, investments in the sector are computed from two sources: the Central Bank of Nigeria (CBN) and the financial data obtained from service providers.

While the CBN collects and calculates an element of the telecoms sector to include FDI, portfolio, and others, the Commission gathers investment figures from telecom licensees described as domestic investment arising from capital expenditure which forms part of the total investment in the industry.

Zoom out: Last week, President Bola Tinubu suspended the implementation of a 5% excise duty on telecom services to address business unfriendly fiscal policy measures and multiplicity of taxes.

When this tax was introduced last year, several stakeholders including the then minister for digital economy Isa Pantami protested against it. According to Pantami, "the ICT sector is overburdened by so many categories of taxes to the extent that there are 41 categories of taxes at the federal and state level, particularly in the telecom sector".

MTN plans to invest $3.5 billion in Nigeria

The news: Africa's leading telecom player, MTN, says it will invest over $3.5 billion in Nigeria in the next five years. MTN Group chairman Mcebisi Jonas disclosed this plan last week during a meeting with Nigerian President, Bola Ahmed Tinubu in Abuja.

Why it matters: Despite operating in 19 markets, Nigerian contributes the largest chunk of MTN Group's revenue.

The telco increased mobile subscribers by 9.4% to 76.7 million in the first quarter of 2023. Per ITWeb, MTN's active data users in Nigeria increased by 14.7% to 41.2 million, mobile money wallets increased by 1.2 million to 3.2 million, and service revenue increased by 20.5% to $742 million.

Know more: According to Jonas, the company intends to mobilise other investors to pump over $1.5 trillion into the country's economy.

"We are ready to remove bottlenecks to investments in the economy," Tinubu told the MTN delegation. "We have a responsibility to revolutionise the economy so that our youths can share in the prosperity of the nation; otherwise, we are only waiting for the dreams to be charted."

India to establish a technology institute in Tanzania

The news: The Indian government has announced plans to set up a campus of the Indian Institute of Technology (IIT) Madras in Zanzibar, Tanzania. This will be the first IIT campus outside of India.

The memorandum of understanding for setting up of campus of IIT Madras Tanzania was signed between the Ministry of Education, Government of India, IIT Madras and Ministry of Education and Vocational Training Zanzibar- Tanzania, last week in the presence of Hussein Ali Mwinyi, President of Zanzibar and S. Jaishankar, External Affairs Minister of India.

Why it matters: "Through this college, Tanzania’s mainland and Zanzibar will become technology hubs. I think this is the government’s ambition as it embraces the industrial revolution," Munishi Assenga, a Tanzanian tech expert told local media.

Since last year, Zanzibar has been positioning itself for rising investor interest; in order to attract funding and tech talent and to build its profile as an island tech hub. The Tanzanian government has since launched Silicon Zanzibar, a public-private initiative to drive this ambition.

Zoom in: In 2022, pan-African e-commerce startup Wasoko launched the “Wasoko Innovation Hub” in partnership with the Zanzibar government. Located in Fumba Town, Zanzibar, the hub focuses on building tech solutions that will drive Africa's e-commerce industry for years to come, becoming home to over 500 tech talents from Africa and across the globe.

The Wasoko Innovation Hub is the first private-public partnership between an African tech startup and the Zanzibar government for “Silicon Zanzibar

💰State of Funding in Africa

Nigerian mobility fintech Moove is back again. The company secured $8 million in financing from Absa Corporate and Investment Banking (CIB) to expand its offering across Ghana.

Recall that Moove raised $183.3 million in 2022—after five funding rounds, including a $20 million financing facility from Absa for its South Africa operations. This new investment brings the fintech's total disclosed funding to about $191.3 million, most of the rounds are debt financing.

Meanwhile, DRC-based cleantech Nuru took the lead on the funding table last week, raising $40 million Series B to double down its operations in the country. Find below a list of the African startups that secured funding last week.

BD Funding Tracker 

📚 Noteworthy

Here are other important stories in the media:

  • Funding decline across Africa: According to BD Funding Tracker, venture capital in African tech dropped by 48% in the first half of 2023.
  • Safaricom wants to invest in more African startups: Kenya’s leading telecom Safaricom says it intends to launch a new VC firm Venture Co. for growth-stage investments and re-launch Spark Venture Fund for early-stage startups.
  • Rwanda’s push to be Africa’s financial hub attracts leading fintech startups: Two African fintechs are expanding their operations in Rwanda, which is pushing to position itself as a strategically important hub for the fintech sector by revamping its business laws and tax code, Semafor reports.
  • 39% of International flights operated in Nigeria in Q1 2023 were delayed: Out of the 3,073 international flights operated within the first quarter of this year, the Nigerian Civil Aviation Authority says 1,193 flights were delayed.
  • Namibia passes crypto bill: Last week, Namibian lawmakers passed a bill to regulate digital assets, cryptocurrencies and virtual asset service providers (VASPs) in the country.

💼 Opportunities


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