Federal Government Expresses Frustration Over State Governments' Disregard of Right of Way Charge Agreement

The Federal Government of Nigeria has expressed its frustration over the decision of some states of the Federation to increase the Right of Way charges in disregard of the resolutions reached by the National Economic Council (NEC).

It may be recalled that in 2013, NEC set up a Committee comprising State Governors and Ministers to review the issues of multiple taxation in the telecommunications Industry in Nigeria and its impact. The Committee, after extensive and wide-ranging consultations, resolved to harmonize the taxes applicable to broadband related activities and streamline the taxation management processes across the Federation.

Specifically, to deepen broadband penetration for the social and economic development of the Country, the Committee agreed to the uniform Right of Way (RoW) charge of N145.00 pér linear meter of fibre.

It may also be recalled that in October 2019, we had written to all the State Governors, drawing their attention to these resolutions and soliciting their support and collaboration towards the realisation of the National Digital
Economy by fast-tracking the deployment of broadband infrastructure for the provision of affordable internet services to underserved and unserved areas.

According to the Honourable Minister of Communications & Digital Economy, Dr Isa Ali Ibrahim (Pantami), "It is true that the digital economy today is strategically dominating the world economy. Oxford Economics puts the current value of the digital economy at $11.5 trillion which is about 16% of the world economy. Furthermore, the World Economic Forum revealed that 60% of the global economy is expected to be digitised by 2022."

The minister in a statement issued today stated that "With the renaming of the Federal Ministry of Communications to Federal Ministry of Communications and Digital Economy as well as the unveiling of the National Digital Economy Policy and Strategy by Mr President, we are on the path of realising the potentials of the digital economy. It is however disheartening to hear that some States have decided to disregard these resolutions and have, in some cases, increased the RoW charges by over 1,200%. This will no doubt impact negatively on the efforts being made by the Federal Government. It is established that there is a strong correlation between a country's broadband penetration and its Gross Domestic Product (GDP).

"An ITU study on Africa indicates that a 10% broadband penetration would result in an increase of 2.5% of GDP per capita. We are therefore calling on all State Governors, especially those that have made public their decisions to Increase the RoW charges, to reconsider these decisions in the interest of Nigerlans as well as for the socio-economic growth and development of the country" he said.

"We also draw their attention to the fact that these decisions, if implemented, will result in an increase on the costs of operations of the telecoms operators which will naturally be passed to the consumers" he added.