Market News

The Central Bank of Nigeria’s call for backward integration in the telecom industry comes at a time the real sector is in dire need of sustainable growth, writes Oluchi Chibuzor

Last week, the Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso advised telecom companies to reduce their dependence on foreign imports by producing key components of their inputs locally. He spoke in Abuja during a visit by Airtel Africa’s management team, led by Group CEO Sunil Taldar. Cardoso stressed that local production would help reduce pressure on the dollar, create jobs, and boost Nigeria’s economy.

The backward integration proposal for the telecom industry comes at a time the real sector is in dire need of sustainable growth. For many analysts, despite challenges facing local manufacturing, it continues to hold long-term benefits for stable and strong naira as well as economic growth. Telecoms sector remains central in achieving these milestones.

Nigeria stands at a crucial juncture where the need to promote local manufacturing has never been more urgent. As the businesses and economy gear towards growth and development, promoting local manufacturing will not only create jobs, earn more forex from exports and support local currency, it can serve as a catalyst for economic and social progress.

This however, requires a delicate balance: ensuring that key players in the economy, including the telecoms embrace backward integration, a strategy where companies source and produce essential materials locally instead of relying on imports. They need to rely less on imported raw materials for their operations.

CBN Governor, Olayemi Cardoso gave insights on what the economy stands to gain from backward integration in the telecoms sector.

He said that massive production of key inputs, that are currently being imported, like SIM cards, cables, and towers is essential.

He noted that over the past 16 months, the CBN has worked to stabilise the foreign exchange (forex) market, strengthen the Naira, and attract investors. With these improvements, he urged telecom firms to embrace backward integration.

Beyond industry reforms, Cardoso noted the CBN’s broader goal of making financial services more accessible to Nigerians, especially in rural areas. He announced plans for a high-level summit where the CBN and industry leaders will discuss ways to improve digital payments and financial inclusion.

“The CBN is committed to ensuring that financial services reach more Nigerians, especially in rural and underserved communities. We aim to build a more inclusive and digitally-driven financial system,” he said.