The Trade Union Congress (TUC) President, Festus Osifo, has attributed Nigeria’s recent 50% telecom tariff increase to the continued depreciation of the Naira. Speaking on Arise Television’s Prime Time, Osifo explained that rising foreign exchange (FX) costs have significantly impacted telecom operators, forcing them to raise tariffs.
Osifo recalled that the TUC had previously warned of FX fluctuations affecting essential services. He cited Zimbabwe’s hyperinflation as a cautionary example, stressing that unchecked currency devaluation could lead to economic distress. “When our Naira was sliding down, when it was being devalued, we argued that if you leave this unchecked, it’s going to trickle down to literally everything. Today, we are seeing that prediction come true, with telecom tariffs being the latest example,” he noted.
According to him, as the Naira weakens, telecom companies struggle with higher costs for network equipment and software, which are priced in dollars. To remain profitable, they pass these costs on to consumers.
“The cost of their [telcos’] operations in Naira equivalent is going up. The reason that cost is going up is because they have to adjust revenue to remain profitable. If a company’s cost outweighs its revenue, it will operate at a loss. To avoid that, they increase prices, thereby transferring the financial burden to the consumers,” Osifo explained.
He urged the government to stabilize the Naira, warning that continued devaluation would escalate living costs and weaken Nigerians’ purchasing power. The telecom industry’s reliance on imported infrastructure makes it vulnerable to FX volatility. This has further driven up operational expenses.
Experts suggest that government intervention in FX management, local production of telecom infrastructure, and incentives for businesses to reduce import dependence could help stabilize telecom costs and ease the financial burden on consumers.
