Foreign investment into the telecom sector fell to $7.24 million in the first quarter of 2026, the weakest quarterly performance Nigeria has seen in more than four years, according to data from the National Bureau of Statistics (NBS).
At the same time, total capital importation into Nigeria rose to $10.37 billion, an 83.8% increase compared with the same period in 2025. This is also a 61% rise from the previous quarter.
Telecoms barely registered in the inflow mix, while banking and finance absorbed most of the funds entering the country.
Banking alone pulled in $7.55 billion, while the financing sector followed with $2.43 billion. Together, they accounted for more than 96% of total inflows.
Most of the capital entering the country came through short-term instruments. Portfolio investment topped the list with about 95% of total inflows, and foreign direct investment small at $135 million, or roughly 1.3%.
Telecoms, by comparison, attracted just 0.07% of total inflows, trailing even trading, agriculture, IT services and equities.
The decline in the sector stands out when set against recent years. Telecom capital importation reached $496.27 million in 2025, while it stood at $456.59 million in 2024. In 2023, it dropped to $134.75 million, before rising again in 2022 to $456.83 million.
A steep drop was recorded in the latest quarterly figures as seen. Inflows fell 91% year-on-year from $80.78 million in Q1 2025 and also dropped 93% from $103.36 million in the previous quarter.
Policy changes in the sector have not shifted investor behaviour. Early in 2025, the Nigerian Communications Commission approved a 50% tariff adjustment for operators with an aim to improve revenue and support network expansion.
Operators also increased spending. The commission said telecom companies invested more than N2.5 trillion in infrastructure in 2025. That is over $1 billion in network upgrades.
Even so, foreign inflows did not follow, as investors appear more focused on fixed-income returns than long-term infrastructure commitments. High yields in money market instruments and bonds continue to draw capital.
This means money is coming in, but not where long-term investment is most needed.
Foreign exchange reforms have helped strengthen activity in banking. Still, volatility in the currency market still weighs on long-term decisions, especially in sectors like telecoms that require steady capital planning.
The International Finance Corporation and the World Bank have in past reports pointed to the need for stable, long-term investment conditions in infrastructure-heavy sectors. That gap is very much visible in the current data.
Heavy dependence on short-term inflows leaves productive sectors exposed. Telecoms, manufacturing and agriculture all receive limited foreign capital.
These risks must be looked into as foreign investment in Nigeria drives growth for telecom, banking and many other sectors.
