Proposed Telecom Towers to Enhance Nigeria’s Lagging Pace
Proposed Telecom Towers to Enhance Nigeria’s Lagging Pace.
The planned construction of 7,000 telecom towers across Nigeria’s rural communities, as recently approved by the Federal Government, is a delightful development, and it’s coming at the most opportune time. This is because the project will accelerate Nigeria’s sluggish financial inclusion performance recently reported as the slowest among its African peers.
Financial Inclusion
Financial inclusion means bringing the unbanked, that is those who are currently not enjoying financial services — such as savings, deposit, credit, payment, pensions, insurance, remittances amongst others — into the financial system. By so doing, they enjoy access to, and use of such services, for economic empowerment and other activities that better their lots towards national development.
Financial inclusion strategy
The results of the Enhancing Financial Innovation & Access (EFInA) survey on ‘Access to Financial Services in Nigeria 2012’, showed that 34.9 million adults representing 39.7 per cent of the adult population were financially excluded. Only 28.6 million adults were banked representing 32.5 per cent of the adult population.
EFInA is a financial sector development organisation that promotes financial inclusion in Nigeria. To address the anomaly, Nigeria instituted the Financial Inclusion Strategy specifically, the strategy aims to provide the blue print that will guide and support stakeholder activities in advancing financial inclusion in the country. It endeavours to present a comprehensive picture of the activities and maps out modalities for coordination, complementarity and synergy among the stakeholders, as well as the periodic performance review.
The milestones
Nigeria put in place specific milestones and deliverables to evaluate its performance towards achieving its financial inclusion objectives.
First the target set for the strategy nationally was to reduce the percentage of adult Nigerians that does not have access to financial services from 46.3 per cent in 2010 to 20 per cent in 2020 – as the population grows. Equally, the strategy projected that 70 per cent of adult Nigerian’s should have access to payment services in 2020, 60 per cent to savings and 40 per cent each to credit, insurance and pensions.
In order to achieve the above targets, the channels through which people can access the services such as branches of banks,microfinance banks, number of ATMs, mobile agents, PoS, agents of deposit money banks are also expected to increase to specified numbers per 100,000 adults in 2020.
Latest report
Despite Nigeria’s robust financial inclusion strategy, a recent report by the FT Partners’ Fintech Industry Research revealed that Nigeria and nine others lead African countries with the most unbanked population in 2024.
According to the report, in Nigeria over 117 million people remain unbanked, followed by Egypt with 79 million people, Ethiopia with 66 million, Tanzania 31, and Morocco 21 million people.
Others include Uganda, Cote d’Ivoire, Kenya, Ghana and South Africa reporting 16 million, 14 million, 11 million and 9 million people respectively.
The report cited lack of trust, in the banking system, a deep-rooted preference for cash, and lack of infrastructure in rural communities as hampering past efforts to bring consumers into the formal banking system.
Despite Nigeria’s fast-growing financial sector, and digital banking revolution, a significant portion of the population remains unbanked. The report noted that the expanding mistrust against the banks was also due to inefficient operations often attributed to “network challenge” which frustrate the operations of the new fintech firms to expand their operations into the rural areas.
Fintechs’ renewed push
Experts say the recent penetration by fintech platforms such as Opay, MoniePoint, Palmpay and others into the rural areas has boosted Nigeria’s digital banking activities resulting in the country recording a record N1.07 trillion e-payment transactions in 2024, according to Nigeria Inter-Bank Settlement System (NIBSS).
The digital banking infrastructure builder explained that the volume of transactions processed by it for the year also jumped from 9.7 billion in 2023 to 11.2 billion in 2024 representing a 15.5% increase in the volume of electronic transactions year on year. The expansion reflected in the surge in PoS activities.
While commercial banks had been the major drivers of PoS terminal availability in the past, the entrance of fintechs into this space has seen the number of PoS devices in the market grow astronomically.
In 2024, NIBSS data showed that the number of PoS terminals deployed across the country more than doubled to 5.5 million from 2.4 million recorded at the end of 2023. This represents a 129% increase.
For a fintech like PalmPay, the deployment of PoS through agents was part of the company’s strategic plans to drive financial inclusion in Nigeria.
“This mission has fueled our efforts in deploying more PoS terminals across the 774 local government areas in the country,” the company said.
Intense competition
While the fintechs are moving in an aggressive manner, the banks are also overhauling their systems as the telecom companies embark on upgrading their payment service banking facilities.
“This is why it is necessary to have an efficient telecom service system in the country through the expansion of their masts and base stations into the rural areas,” said Benedict Okpala, a fintech specialist.
Entry of the 7,000
In response to the challenge, the Federal Government has announced plans to build 7,000 new telecom towers in rural areas to expand access to telecommunications services and improve digital connectivity across the country.
The Minister of Communications, Innovation, and Digital Economy, Dr. Bosun Tijani, who made this disclosure when he led a team of Airtel Nigeria on a visit to President Bola Tinubu at the Presidential Villa in Abuja, stressed the commitment of the government to ensuring that all Nigerians, particularly those in rural areas, have access to quality telecommunication services.
According to him, the plan by the government to invest in rural infrastructure aligns with the administration’s broader goal of improving economic opportunities for all citizens.
He said: “The priority for this government is meaningful access. We don’t want our people to just have access to telecommunication services; we want it to be of high quality. That is why the NCC has been working thoroughly to ensure that we shift the focus not just to quality of service, but to quality of experience.”
Tijani explained that the Federal Executive Council (FEC) approved the construction of the new 7,000 towers as part of a broader strategy by the current administration to bridge the digital divide between urban and rural areas nationwide.
He said the investment would complement the government’s ongoing deployment of 90,000 kilometers of fiber-optic cables across the country.
Telecom – inevitable driver
The three key elements of financial inclusion include institutions (such as banks, fintech firms, insurance companies), the enablers (the telecommunication facilities) and the products (the customized services offered by the institutions). The emergence of telecom sector in Nigeria created the window for enhanced financial inclusion strategy.
Industry experts say, the telecom firms, as the enabler and central to the buoying digital economy, are the inevitable drivers of the rapidly expanding fintech ecosystem and the aggressive financial inclusion strategy.
Role of NCC
Amid the aggressive expansion, it is of utmost priority that the telecom industry is effectively regulated. Without professional regulation, the upcoming 7,000 towers would not justify their purpose.
“Beating the telecom operators into the path of professionalism, efficiency and playing by the rules a one measure the NCC has pursued without reservation to put the telecom industry in a position it should serve the purpose required of it,” Mike Akhigbe, a telecom specialist had said.
According to Akhigbe, the NCC leadership from the outset set its eyes on the telecom operators and ensured they did not misbehave or take undue advantage of Nigeria’s thirst for effective telecom services and this has created an enabling environment for the citizens to enjoy the benefits of the telecom industry.
The Commission is responsible for creating an enabling environment for competition among operators in the industry as well as ensuring the provision of qualitative and efficient telecommunications services throughout the country.
The mandate has led to the expansion of Nigeria’s digital economy with the inbuilt windows for revenue opportunities across the sectors through taxes, levies and charges as the telcos act as enablers in expanding the digital economic landscape.
