Bismarck Rewane, the Chief Executive Officer of Financial Derivatives, has voiced his support for the proposed telecom tariff hike, emphasizing its potential to boost productivity and help moderate inflation in Nigeria’s economy.
Speaking on Channels Television’s Business Morning on Thursday, Rewane highlighted the broader economic advantages of the adjustment, which has been proposed by telecom operators and is under review by the Nigerian Communications Commission (NCC).
“Yes, it helps to reduce inflation because it increases productivity,” Rewane stated, noting that a more sustainable telecom sector would enhance overall economic efficiency.
Telecom operators have submitted a proposal to the NCC requesting a 100% increase in tariffs, citing inflation and escalating operational costs as key drivers. The Minister of Communications, Innovation, and Digital Economy, Bosun Tijani, has confirmed the government’s intent to implement tariff adjustments, with the NCC working on the final framework.
Rewane pointed out that the market has already responded to the prospects of a tariff hike. “Yesterday, MTN’s share price rose by 10% to N220. Investors have factored in this expectation and foresee significant benefits,” he noted.
He added that the combination of tariff adjustments and increased investment in the telecom sector would enhance its sustainability, ultimately leading to higher productivity and economic output.
“Any increase in productivity and output is likely to allow inflation to moderate, which is the ultimate goal,” Rewane explained.
While telecom operators initially proposed a 100% hike, Rewane dismissed the likelihood of such a drastic increase. Instead, he predicted a more moderate adjustment of 40% to 50%, which he described as reasonable after years of static tariffs.
“Will they get 100%? No, definitely not. We suspect an increase of 40% to 50%, which is fair given the current circumstances,” he said.
The NCC has scheduled a meeting with telecom consumer groups to discuss the proposed tariff hike and address potential consumer concerns. The discussions aim to strike a balance between industry sustainability and affordability for consumers.
Rewane acknowledged the alignment among policymakers, regulators, and operators on ensuring the telecom sector remains viable while maintaining service quality.
“We’ve heard from the Minister, Bosun Tijani, who emphasized sustainability, and from the NCC, which is committed to holding operators accountable for service quality,” Rewane remarked.
The NCC is expected to announce a final decision on the tariff adjustment after completing consultations with stakeholders. The outcome will aim to balance the need for industry growth with protecting consumers from excessive cost burdens.