Nigeria: Backward integration in telecoms presents positive prospects for naira

Zawya

01-07-2025

Olayemi Cardoso, Governor of the CBN, speaking in Abuja during a visit by Airtel Af- rica's management team, led by Group CEO Sunil Taldar, stressed that local production would help reduce pressure on the dollar, create jobs, and boost Nigeria's economy.
He said that massive production of key inputs, that are currently being imported, like SIM cards, cables, and towers is es- sential. He noted that over the past 16 months, the CBN has worked to stabilise the foreign exchange market, strengthen the naira, and attract investors. With these improvements, he urged telecom firms to embrace backward integration.
He also assured Airtel and other stake- holders that the CBN would continue to create a business-friendly environment that encourages competition, innovation, and wider access to financial services.
Sunil Taldar lauded the CBN's reforms and expressed support for local produc- tion, saying it would benefit telecom com- panies in the long run. He also reaffirmed Airtel's commitment to expanding finan- cial inclusion through technology.
Taldar was accompanied by Airtel Ni- geria CEO, Dinesh Balsingh; Group CFO, Jaideep Paul; and Director of Corporate Communications and CSR, Femi Adeniran.
Balance of payments surplus hits $6.83bn
The Central Bank of Nigeria (CBN) has announced a Balance of Payments (BOP) surplus of $6.83bn for the 2024 financial year. Hakama Sidi-Ali, the CBN's corpo- rate communications director, said the performance marked a decisive turna- round from deficits of $3.34bn in 2023 and $3.32bn in 2022. She said the improve- ment reflects the impact of wide-ranging macroeconomic reforms, stronger trade performance, and renewed investor con- fidence in Nigeria's economy. The current and capital account recorded a surplus of $17.22bn in 2024, underpinned by a goods trade surplus of $13.17bn.
Petroleum imports declined by 23.2% to $14.06bn, while non-oil imports fell by 12.6% to $25.74bn.
On the export side, gas exports rose by 48.3% to $8.66bn and non-oil exports in- creased by 24.6% to $7.46bn. Remittance inflows remained resilient, with personal remittances rising by 8.9% to $20.93bn. International Money Transfer Opera- tor (IMTO) inflows surged by 43.5% to $4.73bn, up from $3.30bn in 2023, re- flecting stronger engagement from the Nigerian diaspora. Official development assistance also rose by 6.2% to $3.37bn. Nigeria recorded a net acquisition of financial assets totalling $12.12bn. Portfolio investment inflows more than doubled, increasing by 106.5% to $13.35bn, while resident foreign currency holdings grew by $5.41bn, indicating stronger con-fidence in domestic economic stability. Although foreign direct investment fell by 42.3% to $1.08bn, the overall financial account posted notable gains. The coun- try's external reserves increased by $6bn to $40.19bn by year-end 2024, bolstering its external buffer.
'The positive turnaround in our external finances is evidence of effective policy implementation and our unwavering commitment to macroeconomic stability,' said the Governor of the Central Bank of Nigeria. 'This surplus marks an important step forward for Nigeria's economy, benefitting investors, businesses, and everyday Nigerians alike.'
CBN seeks more export markets for Nigerian products
Nigerian manufacturers can only stand a chance in the global market if their prod-ucts can compete favourably with their counterparts abroad, the Central Bank of Nigeria (CBN) has said.
Aisha Olatinwo, the CBN's director of consumer protection and finance, noted that local businesses have the potential to thrive in the global market but that there are a number of constraints militat- ing against the growth of Nigerian-made goods.
'Nigerian products often lack the qual- ity and packaging standards required to compete in global markets. Locally made goods and services need better branding to increase their visibility and appeal in global markets and businesses require support to prepare for global market com- petition.
'The CBN initiative aims to support Nigerian businesses in enhancing their competitiveness through capacity building initiatives and investment in technology, encourage collaboration among financial institutions, business leaders, regulators and policymakers to identify and dis- mantle barriers to growth, and increase exports by raising standards to meet in- ternational requirements and inspiring confidence in locally produced goods,' she stressed.
Bamidele Akintayo, director at Coun- tryside Manufacturing Limited, said: 'From manufacturing to fashion, to tech- nology, and to the industry, our ability to compete depends on how well we can align to embrace productivity and deliver consistent, high-quality products that command respect in global markets'.
The Nigerian banking sector remains a critical industrial foundation to build Nigerian products, opportunity-building initiatives, and investment technology. Banks are well-positioned to support businesses in enhancing their competi- tive opportunities, he stressed.
Nigerian manufacturers, he said, 'should ensure that the products are at- tractive and suitable for specific markets. And utilise packaging as a branding tool. Packaging can serve as a critical compo- nent of branding. Nigeria should design packaging that not only protects the prod- uct but also tells the story and resonates with the consumer.'
However, Francis Meshioye, President of the Manufacturers Association of Ni- geria (MAN) lamented that the operating climate for the manufacturing subsector has been anything but friendly.
According to him, manufacturers spent a whopping N1.3trn ($810m) on the cost of funds in 2024 alone, even as he lamented that the soaring interest rate which oscil- lates between 35-37%, was a disincentive to business.
He would rather the CBN and the Bank- ers' Committee come up with long-term financing options for manufacturers at favourable terms that would drive and not strangle business concerns.