The Federal Government (FG) has announced plans to provide 50% of the $2 billion required to deliver a 90,000-kilometre fibre optic project, a critical infrastructure initiative aimed at boosting digital connectivity in Nigeria. The disclosure was made by Dr. Bosun Tijani, Minister of Communications, Innovation, and Digital Economy, during an interview on Arise TV. He explained that the project would be financed through loans as part of the government’s borrowing plans for 2025.
Dr. Tijani stated, “Earlier this year, the Federal Executive Council (FEC) approved a memo to set up a special purpose vehicle (SPV) for deploying 90,000 kilometers of fibre optic cables in Nigeria. Half of the required funding, just under $1 billion, will be secured through loans by the government.”
Support from Presidency and Private Sector
The Minister highlighted significant support for the project from President Bola Tinubu, the Ministry of Finance, and other stakeholders. He further revealed that private sector companies would provide the remaining 50% of the funding. Discussions with funding partners, including the World Bank, are ongoing, and the government expects to begin cable deployment by the second quarter of 2025.
Dr. Tijani emphasized that the project is crucial for improving digital connectivity across the country, addressing the challenges of inadequate infrastructure often faced by private operators.
Why Government Must Invest in Backbone Infrastructure
The Minister underscored the importance of government involvement in backbone connectivity infrastructure. He noted that private operators typically focus investments in areas with guaranteed returns, leaving other regions underserved.
“When we assessed the state of digital connectivity, we realized two options: rely solely on private companies to fund expansive networks or have the government invest in backbone infrastructure to ensure equitable access to connectivity,” Tijani said.
He pointed out that many progressive nations have opted for government participation in digital infrastructure, recognizing connectivity as a fundamental resource for citizens. This realization led to the establishment of the SPV, which will manage the deployment of the fibre network as a private entity with government representation on its board.
Expanding Internet Access and Economic Growth
The project is expected to expand Nigeria’s digital backbone to 125,000 kilometers, increasing internet penetration to over 70% and reducing internet access costs by 60%. Additionally, it aims to bridge the digital divide by including 50% of the 33 million Nigerians currently without internet access.
Dr. Tijani emphasized the economic benefits of the initiative, projecting it will contribute up to 1.5% of GDP growth per capita. Nigeria’s GDP, which stood at $472.6 billion in 2022, is expected to rise to $502 billion over the next four years due to improved connectivity.
Public-Private Partnership Approach
The SPV managing the fibre project will operate similarly to successful public-private partnership (PPP) models like the Nigerian Interbank Settlement System (NIBSS) and the Nigeria Liquefied Natural Gas (NLNG). This approach ensures efficient governance and operations while leveraging expertise from both government and private sector stakeholders.
Dr. Tijani added that the project aligns with the government’s long-term vision of fostering a digital economy. He highlighted its potential to significantly reduce the cost of internet services, improve the quality of digital services, and spur economic growth across various sectors.
Addressing Connectivity Challenges
The Minister acknowledged that poor connectivity in certain regions results from limited infrastructure investments by private operators focused on high-return markets. By taking an active role, the government aims to ensure nationwide digital inclusion, regardless of geographic or economic disparities.
What You Should Know
The SPV was approved by the FEC earlier in 2023, and the government has been engaging stakeholders to ensure successful implementation. The initiative seeks to deliver affordable and reliable internet access, reduce digital exclusion, and create opportunities for economic growth.
With this fibre optic project, Nigeria is poised to enhance its digital infrastructure significantly, driving connectivity, innovation, and socioeconomic development for years to come.