In a move that has left Nigerians and tech firms in a shared state of financial contemplation, the Nigerian Communications Commission (NCC) has approved a tariff hike across telecommunications services. The adjustment, capped at 50% above current rates, comes against the backdrop of a steeply depreciating naira, rising inflation, and a tech sector fighting for survival. While the NCC defends the decision as crucial for industry sustainability, the real question is: Do Nigerians earn enough to afford it — and can startups now compete for a share of the consumer’s limited purse and still reach profitability?

The NCC, invoking its powers under Section 108 of the Nigerian Communications Act, 2003, insists the tariff adjustment is overdue. Since 2013, telecom rates have remained static, even as the cost of operations surged due to currency depreciation and inflationary pressures. According to the NCC, the new tariffs aim to bridge the gap between operational costs and consumer affordability while fostering innovation and improved service delivery.

Under the new regime, Nigerians will pay ₦16.5 (USD 0.011) per minute for calls, up from ₦11, while the cost of SMS rises to ₦6 from ₦4. Data prices will climb to ₦431.25 (USD 0.28) per gigabyte. Operators stand to rake in an estimated ₦6.7 trillion ($4.3 billion) annually from calls alone, based on 2023 national telephone traffic data showing 205.3 billion minutes of outgoing calls. But these numbers, promising for the telecoms sector, might spell trouble for consumers already grappling with economic hardship.

The timing of this tariff hike could hardly be worse for ordinary Nigerians. Inflation soared to over 30% in 2024, driven by surging food, fuel, and electricity costs. The National Bureau of Statistics (NBS) reports that 62.4% of households lacked sufficient food in 2023, up from 37% in 2019. About 12.3% of households reported that at least one member went without eating for an entire day.

Poor nutrition has led to alarming physical effects: one-quarter of Nigerian children are underweight, a significant jump from 19% four years ago. The situation paints a sobering picture of a population struggling to meet basic needs, let alone afford rising telecom costs.

The Tech Sector’s Predicament: A Perfect Storm

The tech industry, once Nigeria’s beacon of hope for economic diversification, is now reeling from multiple shocks. The naira, officially pegged at ₦800 to $1 in early 2024, trades as low as ₦1,700 to $1 on the black market — a 112.5% depreciation. This instability has discouraged foreign investors and driven up operational costs. International firms like Microsoft and Pick n Pay have exited the Nigerian market, while local startups face dwindling access to funding.

In 2024, Nigeria’s share of African startup funding plunged, overtaken by Kenya, attracting $638m in 2024. Meanwhile, South African pay-TV giant Multichoice Nigeria reported losing 243,000 subscribers in the first half of 2024, citing inflationary pressures. Telecommunications titan MTN Nigeria saw a 48.7% revenue decline in Q3 2024, with voice and data revenues plunging by 31.3% and 15.3%, respectively.

The federal government remains optimistic about its economic recovery plan. In the 2025 budget, it pegged the naira at ₦1,400 to $1 and targeted a GDP growth of 6.4%. However, analysts question the feasibility of these projections, given the country’s mounting fiscal deficits and debt servicing obligations.

While proponents argue that the tariff hike will ensure industry sustainability, critics warn it could exacerbate Nigeria’s economic divide.

A Precarious Future

The NCC’s assurance of stakeholder consultations and promises of transparency in implementing the new tariffs may provide some solace, but the broader economic environment suggests that Nigeria’s telecom consumers and tech firms face tough days ahead. While the tariff hike might support infrastructure upgrades and innovation, the immediate impact on affordability and access cannot be ignored.

For Nigeria’s tech sector, 2025 will likely be a year of cautious recalibration. Firms will need to innovate to survive an increasingly hostile economic landscape, while consumers may have to weigh connectivity costs against other essential needs. As the country’s digital economy hangs in the balance, one thing is certain: the resilience of Nigerians, long tested, will be pushed to its limits yet again.